One of the arguments you hear from Value buyers: How Low it can Go?
Well, the answer is a lot. Actually, it can go down to a level where it can give you tremendous pain. Value Buy in a down-trending stock is a VALUE TRAP.
Case Study: Fossil Group
Fossil Group is a premium fashion accessory company, primarily known for its Fossil and Zodiac Watches. The company also makes licensed accessories for brands such as Adidas; Emporio Armani; and Michael Kors to name a few. Anybody who follows the company can fall in a trap: Oh it's Value now. But with changing taste and preferences, you never know
This is how Fossil Group stock chart looks now. Just imagine...about Value buyers on the way down
I have only one issue with people who scream Value all the time. Too much intellectual arrogance and not admitting that they are wrong
— Deepak Singh (@smarket) August 3, 2017
Recommended Reading: Value and Price Action
Science of Stock Price Action
The best learning comes from experiential learning. It is with this objective - I have developed "Science of Stock Price Action" Video Book. It's a combination of concepts and then its application in real life situations. The idea is to test how concepts work and why sometimes they don't.
If you find my work interesting - I will encourage you to buy the book and access Premium Case Studies. The idea is to demonstrate live how patterns unfold and work. They succeed, they fail but the whole process is real fun. I invite you to be part of it.
Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers