Shares are down 50%, is it cheap?
Since I first came into contact with stocks, investors around me have bought stocks with the idea that the more the stock price falls, the cheaper it is, saying that when the stock price falls sharply, it's actually a big promotion! It's time to clean the goods...
But this isn't for every stock, and it's even a dangerous operation for most people.
Because the magnitude of the decline is actually not directly proportional to the increase, a 50% drop requires a 100% increase to pay off. The stock bought in RM1 falls to RM 0.5 and the drop is only 50%, but the rise of RM 0.5 to RM 1 requires a 100% increase. If you buy the wrong stock, the price of the stock keeps falling, and if you keep buying it, your net worth is also shrinking.
Look at today's $Sea(SE.US)$ - The parent company of Shopee, which is familiar to Malaysians, dropped 28% on today's performance day, down 89% from the peak. This also means that to rise from this price level to the highest point, an increase of about 900% is needed.
However, what many investors think is that 50% is cheap, 50% can drop another 50%, and then there is a possibility of a further 100% drop — I attached my slides chart as a reference. From point A to point B, it also falls 50%, point B to point C also falls 50%, and point C to point D falls 56%.
Even after the stock price has dropped 80%, it can still drop 100% from that point; it's not just 20% left...
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$Sea(SE.US)$ should had buy it when it falls to 89

$Futu Holdings Ltd(FUTU.US)$ Ninety percent of earnings reports were dropped later... I don't think I've seen much of the soaring rise, especially with Futu's situation

$Sea(SE.US)$ Expected trash stocks since I short at 351.

$Grab Holdings(GRAB.US)$  You folks take it easy, me entry late at end of trading day at 3+ dollars.
Will holding grab without worries since it spare money playing for my side 😜.

$Grab Holdings(GRAB.US)$ Have fun less than 4 dollar now. 6000 employees grab hired.
The more curse n fear in the comments, that the best times for entry at the end of trading day.

$Grab Holdings(GRAB.US)$ there are lot stock price under 1 dollar, wait and chance

$BABA-SW(09988.HK)$ what a deal…Charlie Munger and his team of professional analysts determined BABA was cheap at 150…now u can get it at 100!! going to margin debt and go all in here!