StockFetcher Forums · General Discussion · OVER-REACTION HELP<< >>Post Follow-up
corsino
259 posts
msg #36950
Ignore corsino
7/15/2005 1:40:07 PM

Some of us use filters based on bottom-fishing.We buy stocks because their stock price dropped a certain percentage. At times I do that too, but I also try to find out why it dropped. A lot of times, some of the drop is an over-reaction. I'm trying to create a "rule of thumb" to judge what type of bad news can be reasonably expected to result in a loss percentage. Then anything over that loss percentage might be considered an over-reaction, with a possible price bounce the next day.
As a start, this is my preliminary "rule of thumb" . I would appreciate other people's input.

Bankruptcy Fear :.... 40%
SEC Probe :........''''40%
Medical Test Failure...25%
Being Sued :...........20%
Test Inconclusive :....15%
Bad Earnings Report :..10%
Downgrade :.............5%

I know I missed some factors, and my rough estimates are just a beginning.




BigOh
23 posts
msg #36952
Ignore BigOh
7/15/2005 8:17:56 PM

Earnings, quarterly and yearly probably affect even more. That usually causes the "Big" money to jump ship.
Losing a big contract or deal.
Not winning a lawsuit.
Losing a patent.
Merger called off.
New products from competition.
Leadership of the company leaving, retiring or running away(ENE).


corsino
259 posts
msg #36953
Ignore corsino
7/15/2005 8:38:58 PM

BigOh
Thanks. Could you put your guess on the effect of those events ?


StockFetcher Forums · General Discussion · OVER-REACTION HELP<< >>Post Follow-up

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