What you end up with is either a company that is in decline (sometimes referred to
as catching a falling knife) or company with little or no future dividend growth capability.
Not exact matches
The big money knows to hold on while a steeply profitable move is in effect (
as seen in the trader saying, «let profits run») and to patiently stay in cash in the grip of a market panic («don't attempt to
catch a
falling knife»).
First is where the nickname
falling knife comes from...
as in, have you ever tried to
catch a
falling knife?
And this point dovetails with the other point
as far
as since we don't pretend to know the precise timing of when bubbles kind of unwind or when the busts will finally reach a bottom, the idea is that we can actually be in the right quartile of activity, in other words I never try to
catch the very top of a bubble, I don't try to ride things to the very end, and similarly I don't mind
catching falling knifes.
As the street attempts to «buy the dip» (or
catch a
falling knife), the current environment has given us some pause for thought.
Just
as it is dangerous to try and
catch a
knife falling to the floor, it is risky to buy a stock selling - off.
The carriage was piled with luggage and tied bundles, and
as she stood some silver
fell to the ground,
knives and forks and a silver candelabra,
catching in the clatter the few gleams of light from the torch that Roscoe held.
Most investors react to crashes
as it is very hard to
catch a
falling knife.
The 2015 rebalance for commodity indices may be remembered
as the one trying to
catch a
falling knife.
Buying a
falling stock can therefore have the same effect
as trying to
catch a
falling knife — it is likely that you will get hurt!
What I don't buy these days, though, are
falling knives: Sure, I love a good
knife -
catching story
as much
as the next guy — esp.
So
as a value investor, you're: a) buying a stock you think is cheap, but which could collapse in mere days, if bad news hits / sentiment turns and finally / suddenly everybody else notices the company's poor financials & bails out indiscriminately, or b) already trying to
catch a
falling knife!?
Tweet Imagine you throw a
knife in the air to impress people around you and you try to
catch it
as it rapidly
falls.
As FTB s we were terrified as no one wants to catch that falling knife without knowing where the bottom i
As FTB s we were terrified
as no one wants to catch that falling knife without knowing where the bottom i
as no one wants to
catch that
falling knife without knowing where the bottom is.