Don't Buy The Dip...Yet

Jeremy Blum profile picture
Jeremy Blum


  • The decline in the stock market this year was primarily caused by step 1, the deflation of a number of asset bubbles.
  • Recently, investors and executives have rather suddenly become concerned about a recession.
  • A recession would be step 2, I have listed 17 reasons why it's likely in the next year.
  • Recessions almost always drive the stock market lower due to lower earnings expectations.
  • This article covers why you shouldn’t buy this dip, and what to look for to get back in.

two peppers wooden cubes representing hot sale

PictureSyndicate/iStock via Getty Images

Buying the dip has made a lot of people a lot of money. It works great for years, until one day it doesn't. That day is usually when a bubble bursts or a recession is apparent. This year we have

Number of Nasdaq listed stocks

PGM Global (data via Bloomberg)

Inventory bloat of major retailers

Citi Research

Citi's US economic surprise index

Citi, Bloomberg

This article was written by

Jeremy Blum profile picture
7.91K Followers currently has me ranked in the top 1% of all Seeking Alpha and similar sites writers.  I was the Credit Manager for a mid-sized publicly traded bank and retired early in 2013. Despite never working in the industry, I took and passed the CFA Level 1 exam. I usually only write about companies that are my best ideas and I have a position in. I traditionally have invested in and written about small and micro cap deep value stocks. As an investor you can get an edge in researching and talking to management of small and micro cap companies that have little or no analyst coverage. About 50-75% of my portfolio are deep value stocks, primarily microcaps. That is historically where I have had the best returns.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Recommended For You

Comments (199)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.