#327: Are you buying?

Simon Shares

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Are you buying?

I post a lot on Twitter, probably too much. Much of it is not opinion, they're just interesting charts or stats, especially of collapsing stocks (not many flying to the moon these days).

Almost every time I Tweet about a collapsing stock somebody asks "are you buying?". And the answer is pretty much always no.

The one theory is that at the right price any stock is attractive - so a collapsing price may well make an unloved stock worth buying. But I do not agree with that sentiment at all. I only want to own quality, no dogs in my portfolio. So for me it doesn't matter what the price is - I want nothing to do with the stock, in fact I want nothing to do with the vast majority of stocks on the JSE for one reason or another.

There are of course exceptions. The few stocks that I do love and will buy more of if the price were to collapse, but that list is small - around twelve at most.

There is another point here, FOMO, I have covered this before. The belief is often that a 'great' collapsing stock will rebound with vigour and those 'lucky' enough to have bough at the bottom will find themselves instantly rich. But this seldom happens. Most collapsed stocks remain collapsed for a long time - if not forever.

So follow me on Twitter, enjoy the charts and other stuff I post. But don't ask me if I am buying. Likely if I am, I will mention it in the Tweet or you can check my portfolio here.

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