Back in 2009, many investors regretted owning stocks and as a result locked in losses by
selling at depressed prices.
«I tend to avoid the shares of weaker companies, even if their shares are
selling at depressed prices.
The main issue for good, established companies here is not the risk to the long - term stream of cash flows, but to what extent the uncertainty about the coming year or two of earnings will frighten investors to
sell at depressed prices (thereby pricing stocks to deliver even higher long - term returns).
Not exact matches
He rates the stock «underperform» — Wall Street speak for
sell — as he believes it is overvalued even
at current
depressed prices, citing the risk that investors» sentiment on the company will sour further if it is accused of fraud or «other impropriety» surfaces.
One way to mitigate this risk is to focus on disproportionately collecting businesses that have the financial strength necessary to survive even the darkest days of a period like 1929 - 1933 without having to issue stock
at severely
depressed prices (which, from an economic perspective, amounts to you, the old owner, having to
sell off your ownership in exchange for a bailout).
That's why during a recession, you want a lot of cash, cash equivalents, or access to money in some way
at your disposal in the event that you lose your job, the stock market crashes and you don't want to
sell your shares
at depressed prices, you suffer a pay cut of some sort, are disabled, or you own a business and sales start to drop.
They've been
selling properties
at deep discounts to already written - down book values, but
at prices high enough to more than justify today's
depressed share
price.
Large numbers of individuals and small partnerships saw opportunities to profit from
depressed prices and began investing in foreclosures and short sales, buying them
at a discount and renovating them, either to
sell at a profit or to rent out, often to families that had lost their homes to default.
High volatility permits an investor to purchase stocks that are particularly
depressed and to
sell stocks when they are
selling at particularly high
prices.
If you had originally planned withdrawing 4 % a year, temporarily lowering this to a smaller withdrawal rate would help mitigate the damage done by a market crash (assuming you have to
sell assets
at depressed prices).
I'm talking about balance in an emotional sense too, achieving a level of equanimity that helps us keep our composure when the markets are in turmoil, so we don't do something we'll later regret, like
selling stocks in a panic
at depressed prices.
It is
selling stocks
at depressed prices during the short - run that kills retirement portfolios.
Careful analysis shows that
selling stocks
at depressed prices during the first few years is what leads to failure.
If home
prices stay
depressed for extended periods, the company may have to write down the value of its properties or
sell them off
at heavily reduced gross margins or losses.
Knowing that
selling shares
at depressed prices causes failure, a much better alternative would be to rely on dividend strategies that avoid the need to
sell.
The disposition effect means everyone is
selling,
depressing the rise in
price at first, but eventually it reaches fair value.
Large numbers of individuals and small partnerships saw opportunities to profit from
depressed prices and began investing in foreclosures and short sales, buying them
at a discount and renovating them, either to
sell at a profit or to rent out, often to families that had lost their homes to default.