These Are the Sort of Dips We Talk About Buying On

Here at The Motley Fool, we talk about "buying on the dip" when we see companies we like but would prefer to see a pull-back before we buy in. In the following video, Fool contributor Matt Thalman discusses a few recent opportunities in which investors could have bought into a few different blue-chip stocks had they been following the market and noticed the opportunity. The old saying that you should buy low and sell high may be easier said than done, though, as a lot of investors lack the patience and discipline to wait for good buying opportunities, and some opportunities can simply be overlooked. With the speed at which a few recent shares came back after falling, it's easy to see why although dips do occur, the average investor may miss them.

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  • Report this Comment On July 21, 2013, at 12:52 AM, grahamsway wrote:

    Nice presentation but throwing around 3%, 5%, even 10% as discounts seems kind of liberal.

    When I shop for stuff, 20% minimum is what I'd consider a discount. The same goes for stocks.

    If one thinks that they got a deal at 5% off and the thing drops another 15%, it virtually guarantees they probably sell it, usually when they should've been buying it.

    Price drops of 3% to 10% are interesting but it doesn't seem to me that it necessarily indicates a purchase there is buying low.

  • Report this Comment On July 21, 2013, at 11:38 AM, ScottAtlanta wrote:

    @Graham -- I agree, except Matt clarifies that "these are companies that don't typically make moves of 3/5/7% in short periods of time" (paraphrased). So his is a good point.

    @Matt: you could have clarified further to say....look at two things 1) the price history of a stock and 2) the fundamentals. If the price history is erratic (high beta) then, chances are you can wait...OR if the stock price is on a tear UP, perhaps a slight pullback is the time to buy....dpending on 2) fundamentals....are they intact...has nothing changed other than a short term situation and overreaction? ...then buy or don't sell.

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