Never catch a falling knife

Those quoting Buffett don’t get him. Yes. He believes in buying after a stock gets crushed is sound. On one condition. The market weakness caused the decline. The company is sound. Good management. Well run. A bear market takes the babies with the bathwater. The good goes down with the bad. But buying just because a stock is cheap. Is a big mistake. You buy good companies who are cheap due to stock market declines. Not fundamentals. Buffett is also correct that the long term is the best time frame if there are good reasons for future profits. I predicted the Tesla fiasco. I know the auto industry. It’s competitive. Asset intensive. Bad management. Musk may be a genius but not a great manager in a tough industry that has already invested in plants and equipment. Ask John Delorean. Never catch a falling knife.
Watch for a dead cat bounce. Price is what you pay. Value is what you get.