A sputtering economy, implosions at financial institutions, or just plain bad management -- on any given day, investors can name a number of reasons to sell a stock. Yet while panic is never beneficial to investors, it's good practice to play devil's advocate with investments from time to time.
In Motley Fool CAPS, more than 120,000 members have weighed in on nearly 5,400 stocks, sharing bullish and bearish opinions alike.
In the case of top retailer Best Buy
1. It's ugly outside
The economic cycle that everyone has enjoyed for the past several years has abruptly changed, and it isn't pretty. Cheap credit has evaporated and buyers are no longer reaching for the credit card as often, leading Best Buy CEO Brad Anderson to sum it up eloquently as "the most difficult climate we've ever seen." Some investors believe that outside of leveraged consumerism, we've got nothing.
2. Wrong place at the wrong time
In shaky times, many investors tend to flee stocks in retailers like Amazon.com
3. Squeezing profits
Shoppers shopped on Black Friday, but many investors worry that the deep discounts at Best Buy and other retailers are stretching their already-thin profits. Best Buy faces tough competition from discounts at Wal-Mart, and Circuit City is offering fire-sale prices on electronics at the 155 stores it's closing because it's under bankruptcy protection. The grim assessment also led Best Buy to lower its full-year guidance, pointing to a new era when it's tougher to turn a profit.
Of course, Best Buy has survived and thrived despite dozens of obstacles. But the question about whether the company can continue to do so profitably is why CAPS is such a great resource for augmenting your own analysis.
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Fool contributor Dave Mock is a sucker for a comfortable leather couch. He owns shares of Coca-Cola. Best Buy, Wal-Mart, and Coca-Cola are Inside Value recommendations. Best Buy and Amazon.com are Stock Advisor picks. The Fool owns shares of Best Buy. The Fool's disclosure policy was found nailed to the door of the SEC.