Hi alvinator, you will top up if it’s down significantly, but not at this price $29 or let’s say $30. That could be a contradictory statement though. I remember being in this position a while back.
What if this stock rallies to $40 before announcement. And then say they missed expectations by $0.5m so not very significant but the market is expecting a beat so a slight miss is simply criminal, and the shares drop by a whopping 25% in a day. Imagine that - it wipes out a quarter of the market cap in a day.
That is “down significantly”. Would you then buy it at $30? If yes, wouldn’t that mean it’s contradicting your earlier statement of “not buying at this price”?
Im not having a go at you, I myself was in this situation with a few tech stocks and I found it a very tough dilemma to be in. Because I told myself the price was too high, but it dropped 25% in a day which is simply ridiculous for a small insignificant miss in revenue (which still grows by a good 35-40% year on year). What does one do in that scenario?
It is is not an unlikely scenario - it happened with WTC, XRO and a few more tech stocks for me over the last 2 years in particular. These continued to shoot up 50-200% after that. Those who are curious of what I did, I ended up not tipping up “on principle” (but in hindsight, it’s more like stubbornness or anchoring bias) and regretted it.
APX Price at posting:
$29.78 Sentiment: Buy Disclosure: Held
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