A February 2012 financial article states that there is a stock market adage of “bad companies make for good trades.” That is, a company might experience hard times and go down significantly in stock price, but it might be a good time to buy at that low price.
The exact wording of “bad companies make for good trades” has not been an established stock market adage, but it is similar to the very old adages of “buy low and sell high,” “buy when there’s blood in the streets” and “buy in gloom and sell in boom.”
CNBC Stock Blog
‘Bad’ Energy Companies That Make for Good Trades
Published: Friday, 24 Feb 2012 | 2:28 PM ET
By: Eric Rosenbaum
There’s a cynical stock market adage that explains recent trading in shares of Transocean, Weatherford International and Chesapeake Energy: Bad companies make for good trades. It’s a bit of trading knowledge that can help investors identify stocks where even if the long-term outlook is promising, short-term management mistakes offer trading opportunities. A stock goes down because it messed up so much, and that presents an opportunity to ride it back up.
New York City • Banking/Finance/Insurance • (0) Comments • Saturday, February 25, 2012 • Permalink