The exercise of catching bottoms and averaging down versus cutting losers and admitting you were wrong can and often is a painful lessons every investor goes through during points in their investing journey.
While scanning and examining companies and charts that are participating in strong uptrends is a worthwhile exercise, an equally important exercise is looking for companies which are currently in cycle downtrends but have strong underlying fundamentals which may not be presented reflected in today’s price.
In effect, they have been “thrown out with the bathwater” and are now potentially mispriced based upon their current and future underlying fundamentals.
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