Quote:
Originally Posted by GregWeld
This IS NOT a stock picking thread --- but I would like to use STAPLES (SPLS) as an example here.
Steven - I know you've read and followed this thread for awhile now... so I have to ask you:
What part of the SPLS chart is lower on the left and higher on the right - 1 year it's down - 5 year it's down - 10 year it's down
More importantly -- it's 3 and 5 year TOTAL RETURN are both negative.
Now - it's just announced store closings.
My bet would be that the next "cost cutting" they do is the dividend payout.
So here's my FOOD FOR THOUGHT when picking stocks. If all the indicators are negative - and the stock is falling week after week and month after month... WHY BUY IT WHEN YOU CAN PUT YOUR MONEY IN SOMETHING THAT'S HEADED IN THE RIGHT DIRECTION. Rather than "gambling" that after you buy - it's all going to somehow turn around?
I'm not trying to pick on you - or talk you out of your buy - I just want to use this particular buy / name to reiterate (for INVESTING 102) how to keep it easy and relatively safe - with GROWTH and INCOME... and that is to buy best of breed -- with good charts -- and total return (POSITIVE) -- so that at least we THINK we're headed in the right direction.
Another old market saying --- "Don't try to catch a falling knife".
:>)
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Thanks Greg, I hear you on this one. It's less than 1% of my holdings... most of my other stuff falls right in line with the philosophy on this thread.
I know the stock chart looks bad...my only 'defense' is that the fire sale yesterday got me digging into their financial statements. Their books look a fair amount better than the stock chart indicates. Buying SPLS is me trying to put on my Warren Buffet cape for a stock that
I think is undervalued.