Calling all Broken Toys and Cigarette end aficionados!
I have never kept it a secret that I prefer lower entries vs chasing FOMO, but in the advanced internet/info age we find ourselves in now, those are harder and harder to find, it seems, as everything gets bid up and overvalued quickly.
We had some great opptys in June and Oct/Dec of 2022: NVDA, UPST, PTLO, GLBE…all hit 52 wk lows and then some. Not every stock has bounced back (looking at you, ZM) but many went on solid runs after those lows.
So time to start tracking new Broken Toys. The idea is that the stock should be broken, but a fairly reasonable expectation should exist that company will/can/should right itself and the stock will soon head back up.
Or in case of SPG during COVID, the company did nothing wrong, but were forced to shutdown due to the lockdowns, which caused an irrational price drop. Looking at parallels, at that time, to the 2007-2009 GFC, I came up with a target of $135 for SPG when it was sitting in the low $60’s. I wound up selling most near $170. That was an overachievement thanks to the irrationality of the 2021 market.
I believe a recession, whether soft or hard I am unsure, is coming. Anecdotally, enterprises are buying less, even if increasing some cloud spend. Generative AI has both upside (productivity gains) and downside (increased unemployment potential) and it appears the Unemployment Rate is soon the last domino to start falling.
Some similarities to the broadband/fiber boom of 1999/2000 that eventually went bust. Keep in mind…internet speeds, and networking speeds, never stopped increasing. The stock mania just burst as too much growth was built-in early on. I think AI will go the same route. Truly world-changing personal assistant AI’s may change my mind, but they will largely benefit a couple tech titans and not all the S&P500 or Russell, or DOW Industrial stocks, etc etc…
So…what is out there?
I bought some SE, BTI, JD, and NSSC all at/near 52 wk lows.
PTLO still about 15% off lows, but I like them longer-term too, so started a bit early.
Old favorite SPG is still about 30% off lows, so not pulling trigger there. Although I don’t think I will be as greedy as $85 to buy, if it gets into low-90s again, I may start there.
What are you looking at, and what targets do you have?
Stocks near/at 52 wk lows:
ENPH (former Saul darling left for dead. I wanted to short at $330, and chickened out…grrr!)
DIS - expensive theme parks, and rising wages don’t seem like a great fit into face of recession, and strikes are limiting streaming options. Iger back in charge is a plus. Fighting with Ron D in FL is distracting. The run up from the Marvel and Lucasfilm purchases was epic, and has never really been retraced. Jump in now, or wait to see if the $80 line from 2014 is breached?