Post by
Possibleidiot01 on Apr 17, 2023 6:47pm
will this or does this apply?
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research. Questionable Investment Strategies: After a Big Stock Surge, Buy on The Second Day. The stock of a company that reports surprisingly good results will typically surge on the day of the announcement. Investors closely watching the stock love the news and add to their positions. But what about investors who are not watching so closely? They check in at the end of the day and see the stock is up 30 per cent. “Wow, that’s awesome,” they say, “it’s time to take some profit.” The next day, they, and anyone adjusting their position size, become a seller of the stock, and the price may check back five per cent or even more. But the thesis here says that’s a buying opportunity. Business at the company has clearly changed for the better, and these sellers are just taking easy profits without regard to what’s changed at the company. Many investors see a stock move 30 per cent and think it’s overdone. But more often than not, it isn’t.