Comments on: Should You Buy or Sell a 52-Week Low ? http://www.tradersnarrative.com/should-you-buy-or-sell-a-52-week-low-539.html Freshly squeezed market commentary & analysis Sat, 21 Nov 2009 14:33:29 +0000 http://wordpress.org/?v=2.0.2 by: keith piccirillo http://www.tradersnarrative.com/should-you-buy-or-sell-a-52-week-low-539.html#comment-32771 Mon, 21 Apr 2008 02:53:52 +0000 http://www.tradersnarrative.com/should-you-buy-or-sell-a-52-week-low-539.html#comment-32771 Nice article. The only way to buy a 52 week low is to analyze the fundamentals to death, and see WHY it has dropped to current levels. Most online retail internet purchases follow the same seasonal trend as Ebay, and much more people than ever before purchase for holidays online. Read and listen to the quarterly conference calls like Cramer says. I don't go to the casino and I wouldn't buy 52 week low stocks. First disprove with quality assumptions why its tanking and then the institutional dislike for your stock pick may change. Nice article.
The only way to buy a 52 week low is to analyze the fundamentals to death, and see WHY it has dropped to current levels. Most online retail internet purchases follow the same seasonal trend as Ebay, and much more people than ever before purchase for holidays online.
Read and listen to the quarterly conference calls like Cramer says. I don’t go to the casino and I wouldn’t buy 52 week low stocks.
First disprove with quality assumptions why its tanking and then the institutional dislike for your stock pick may change.

]]> by: Ken http://www.tradersnarrative.com/should-you-buy-or-sell-a-52-week-low-539.html#comment-916 Wed, 02 Aug 2006 09:05:27 +0000 http://www.tradersnarrative.com/should-you-buy-or-sell-a-52-week-low-539.html#comment-916 I would assume someone using this strategy also do homework on the stock. This would cover for the "on the way to ZERO" risk. Of course there is the wise say that one should not catch the falling knife. I would assume someone using this strategy also do homework on the stock.
This would cover for the “on the way to ZERO” risk.

Of course there is the wise say that one should not catch the falling knife.

]]> by: James Altucher http://www.tradersnarrative.com/should-you-buy-or-sell-a-52-week-low-539.html#comment-905 Wed, 02 Aug 2006 01:07:02 +0000 http://www.tradersnarrative.com/should-you-buy-or-sell-a-52-week-low-539.html#comment-905 Babak! Thanks for the mention. Babak! Thanks for the mention.

]]> by: Babak http://www.tradersnarrative.com/should-you-buy-or-sell-a-52-week-low-539.html#comment-892 Tue, 01 Aug 2006 16:09:00 +0000 http://www.tradersnarrative.com/should-you-buy-or-sell-a-52-week-low-539.html#comment-892 HoudDogOne: I'm not sure what you mean when you refer to the Cdn income trusts. How are they related to this? I agree Cdn costs are too high rel. to US but they are coming down fast. HoudDogOne: I’m not sure what you mean when you refer to the Cdn income trusts. How are they related to this? I agree Cdn costs are too high rel. to US but they are coming down fast.

]]> by: HoundDogOne http://www.tradersnarrative.com/should-you-buy-or-sell-a-52-week-low-539.html#comment-862 Mon, 31 Jul 2006 00:39:09 +0000 http://www.tradersnarrative.com/should-you-buy-or-sell-a-52-week-low-539.html#comment-862 Just to elaborate... I have all price data for all stocks for 10 years... Sitting on my network. I could simulate buying any stock at a 52 week low... Holding for 3-6 months... While shorting any stock that hits a 52 week high... And holding for 3-6 months... (A very well hedged portfolio)... I could code and run a simulation in ** one weekend **... And see how profitable it is. Could make it as complicated as you like. But so could about 10,000 players or institutions globally. So it's a ** waste of time **... Because if 52 week lows/highs were "market inefficient"... Those 10,000 players would have arbed it out a long time ago. The only thing you are on to... That is potentially a ** very profitable ** risk arbitrage... Is all those Canadian income trusts... But transaction costs are likely too high for Canadian securities... To bother with... when you have the US market sitting there. Just to elaborate…
I have all price data for all stocks for 10 years…
Sitting on my network.

I could simulate buying any stock at a 52 week low…
Holding for 3-6 months…
While shorting any stock that hits a 52 week high…
And holding for 3-6 months…
(A very well hedged portfolio)…
I could code and run a simulation in ** one weekend **…
And see how profitable it is.
Could make it as complicated as you like.

But so could about 10,000 players or institutions globally.

So it’s a ** waste of time **…
Because if 52 week lows/highs were “market inefficient”…
Those 10,000 players would have arbed it out a long time ago.

The only thing you are on to…
That is potentially a ** very profitable ** risk arbitrage…
Is all those Canadian income trusts…
But transaction costs are likely too high for Canadian securities…
To bother with… when you have the US market sitting there.

]]> by: HoundDogOne http://www.tradersnarrative.com/should-you-buy-or-sell-a-52-week-low-539.html#comment-847 Sat, 29 Jul 2006 21:17:56 +0000 http://www.tradersnarrative.com/should-you-buy-or-sell-a-52-week-low-539.html#comment-847 This is incredibly simplistic... Maybe a "strategy" for Grandma... not a pro trader. To use a single stock as an example... Or even a subset of the DJII is misleading at best. Let's do the math for Enron. Or WorldCom. The biggest danger with "52 week lows"... Is that these stocks are often on their way to ZERO. Sophisticated players have long since bailed out... Leaving the little people holding the bag. As for EBay... They have the worst customer service in American history... Are hated by both buyers and sellers... just go to epinions, my3cents, etc This is a BIG RED FLAG. You are not protected in any way.. So buying anything over $100 to $200 is nuts. EBay could never withstand a challenge from someone like GOOG... Because GOOG has computer costs roughly 50% of EBay.. And a reputation for integity that EBay will never regain. This is incredibly simplistic…
Maybe a “strategy” for Grandma… not a pro trader.

To use a single stock as an example…
Or even a subset of the DJII is misleading at best.

Let’s do the math for Enron. Or WorldCom.

The biggest danger with “52 week lows”…
Is that these stocks are often on their way to ZERO.
Sophisticated players have long since bailed out…
Leaving the little people holding the bag.

As for EBay…
They have the worst customer service in American history…
Are hated by both buyers and sellers… just go to epinions, my3cents, etc
This is a BIG RED FLAG.

You are not protected in any way..
So buying anything over $100 to $200 is nuts.

EBay could never withstand a challenge from someone like GOOG…
Because GOOG has computer costs roughly 50% of EBay..
And a reputation for integity that EBay will never regain.

]]> by: Barry Ritholtz http://www.tradersnarrative.com/should-you-buy-or-sell-a-52-week-low-539.html#comment-794 Wed, 26 Jul 2006 19:16:15 +0000 http://www.tradersnarrative.com/should-you-buy-or-sell-a-52-week-low-539.html#comment-794 James suggested Nasdaq 100 Pradeep suggest the Dow. Everyone seems to be very good at disproving what I didnt say. How about responding to my original claim? Buying stocks making 52 lows is an overall losing strategy. More on this tomororw. James suggested Nasdaq 100

Pradeep suggest the Dow.

Everyone seems to be very good at disproving what I didnt say. How about responding to my original claim? Buying stocks making 52 lows is an overall losing strategy.

More on this tomororw.

]]> by: Babak http://www.tradersnarrative.com/should-you-buy-or-sell-a-52-week-low-539.html#comment-793 Wed, 26 Jul 2006 18:59:22 +0000 http://www.tradersnarrative.com/should-you-buy-or-sell-a-52-week-low-539.html#comment-793 Pradeep: There was a book which had a very simple and similar idea. Take the stocks in the Dow, buy the one with the worst performance at the end of the year and then sell it in one year. Rinse and repeat. Historically buying weakness over a long time interval (say a year) has been a good strategy. Pradeep: There was a book which had a very simple and similar idea. Take the stocks in the Dow, buy the one with the worst performance at the end of the year and then sell it in one year. Rinse and repeat. Historically buying weakness over a long time interval (say a year) has been a good strategy.

]]> by: Pradeep Bonde http://www.tradersnarrative.com/should-you-buy-or-sell-a-52-week-low-539.html#comment-789 Wed, 26 Jul 2006 15:34:53 +0000 http://www.tradersnarrative.com/should-you-buy-or-sell-a-52-week-low-539.html#comment-789 Barry is completely wrong on this one. If you test DOW component stocks by buying at 52 week low you will find great success. Anyone who has done any serious market testing knows buying weakness has an edge. His other statement never to buy former market leaders also is very misleading because the market leaders that survive a bear market come back and can make moves upwards of 300% from bottom. Look at SNDK. YHOO, AMZN, AAPL, MNST and so many others. No wonder he is a CNBC guru. Barry is completely wrong on this one. If you test DOW component stocks by buying at 52 week low you will find great success. Anyone who has done any serious market testing knows buying weakness has an edge.
His other statement never to buy former market leaders also is very misleading because the market leaders that survive a bear market come back and can make moves upwards of 300% from bottom. Look at SNDK. YHOO, AMZN, AAPL, MNST and so many others.
No wonder he is a CNBC guru.

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