Simple: Never Fall in Love with any stock no matter how much you like it. The idea of Buy and Hold can sometimes be dangerous
Chipotle is my fav fast casual restaurant. If I am hungry, yes that's the place I love to eat.
Is Chipotle Mexican Grill going to become the next big Global company after amazing success in US?
— Deepak Singh (@smarket) February 19, 2015
Market also used to love Chipotle...
It was a flawless Buy and Hold stock
In 2015: McDonald has run out of ideas
And Chipotle is doing nothing wrong
Well that's what happens when trend changes
— Deepak Singh (@smarket) May 27, 2015
Then this happened in October 2015: People falling sick after eating contaminated food
This is how the stock reacted
And two years later - this is where the stock stands today
Why this happened? - Because once market starts doubting a stock - it becomes very difficult for a company to turnaround
Nothing seems to be going right for Chipotle.
Chipotle's food safety practices under serious doubt? pic.twitter.com/1WYb4KRC1e
— Deepak Singh (@smarket) January 31, 2016
When tide turns - nothing works
How quickly things can turn? - Chipotle struggling to convince its customers about food safety...
"Food With Integrity" was their selling pt
— Deepak Singh (@smarket) March 1, 2016
The bad news continues
How customers change their perception
Chipotle is no longer the preferred brand among fast-casual Mexican restaurants as per recent survey
— Deepak Singh (@smarket) June 10, 2016
Two Lessons we can learn
Once a scandal hits a company, it becomes difficult even for good companies to stage a comeback. Example: Chipotle pic.twitter.com/szWUKSEYI1
— Deepak Singh (@smarket) November 1, 2016
One should never...I repeat never be in love with a company. Things can turn upside down anytime. Two such examples: Macy's and Chipotle
— Deepak Singh (@smarket) January 12, 2017
Never Buy just because you like it
When a stock collapses like this...buying opportunity or Avoid?
It becomes difficult to answer if you like the company emotionally
— Deepak Singh (@smarket) March 17, 2017
Read more: Price Action
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