Only Dips Buy on Dips. Yeah, Right.

The following video is part of our "Motley Fool Conversations" series in which analysts Jim Mueller and Jason Moser discuss topics across the investing world.

We've all heard the saying "Dips buy on dips," meaning don't do it. But what happens if your stock gets crushed? Jason asks Jim, and the answer may surprise you. Watch the video and then think about this the next time a stock you own drops 50% in a few weeks or 15% right after earnings. You may be seeing an opportunity rather than a reason to run away.

Although we always invest for the long term at the Fool, companies have a lot riding each time they report earnings. Earnings season can propel your favorite stocks to new heights or sink them like the Titanic. Fortunately, the Fool recently identified five stocks we think are poised to win as they report their first-quarter earnings this month -- and for years into the future as well. Check out "5 Stocks Investors Need to Watch This Earnings Season." The report won't be available forever, so we invite you to enjoy a free copy today. You can click here to access your report -- it's totally free.

Jason Moser has no positions in the stocks mentioned above. Jim Mueller owns shares of BP p.l.c. (ADR), Intuitive Surgical, Netflix, National Oilwell Varco, and Transocean, and has the following options: short MAY 2012 $55 calls on Transocean. The Motley Fool owns shares of Intuitive Surgical, National Oilwell Varco, and Transocean. Motley Fool newsletter services recommend Intuitive Surgical, National Oilwell Varco, and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On April 24, 2012, at 2:07 PM, zpoet wrote:

    If you believe in a company and they have strong fundamentals and strong underlying business, investors should rejoice at such large dips!

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