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Amazon, Apple, Google: Buying on the Way Down

Someonene who tries to pick the market bottom for a stock is guessing. So at some point if you like a stock, you have to pull the trigger.

It seems most of the advice I've read over the years is it wait until an uptrend is established. Why is this better than buying on the way down?

Answer: It isn't. The reason so many advisers want you to wait for an uptrend is because on the surface, it makes them look wiser. If you buy after an uptrend is well established, and the price continues up, they are smart and you are happy. Much later, at the high, they won't be telling you to sell, but after you loose all your gains, they can tell you you got greedy or didn't get hurt.

In reality, this advice guarantees you to not participate in some % of the upswing from the bottom. When does the adviser suggest buying, when the stock is up 20%. or more? And don't forget, there are times when this 20% buy threshold is a bear market rally. Whoops.

If you buy on the way down, you may also miss the bottom by 20% or even more. Or less. Or you may even hit the exact bottom if you're lucky. Or the world may come to an end so what difference does it make that you overpaid? One thing is certain: The uptrend buyers ALWAYS overpay.

Do your Fundamental homework and buy good assets when they are cheap. So what if the next guy gets it cheaper? Market reversals can happen so fast you may miss much of the upside. Look what happened on 11/13. There was an almost 900 point upswing in the Dow after noon and before closing