FICO and Nike show, it’s better to be late than early in a stock recovery.

Both are down more than 50% in recently and continuing to slide. FICO fell almost 25% in a day and Nike is down again after reporting earnings where they announced layoffs and other restructuring. Just when you thought it had bottomed and was ripe for a turnaround, the stock falls again🤡.

Not saying that these two are dead, these two are definitely important companies big names like Tim Cook and Bill ackman have bought Nike at higher prices. But for retail investors imo it’s not a good idea to catch falling knives.

I know this probably stands against the traditional value investing wisdom but sometimes you just have to accept that the market might know something that you don’t and you must acknowledge that the markets ability punish is often stronger than most people’s ability to take loses.

Netflix and Meta both got cut in half in 2022 but reality is most people including Bill Ackman sold before the recovery as they couldn’t face the loses.

If you had waited for recovery to happen and get confirmed, and bought these two when they made a new ATH you’d still be up A LOT. Especially in an environment where you’re getting almost 5% on 2Y treasuries, I don’t think it’s worth the risk to catch falling knives.

Not saying this always works, it didn’t in the case of Target for example, it’s up 70% this year but again, most investors who averaged down are probably still breaking even or barely up.