Catching Falling Knives

A recent post resonated with me as I have a tendency to grab the falling knife as soon as it hits my preconceived value target – a falling knife gets my attention for sure.  This was a thoughtful post and with greater discipline, I see adopting similar practices

Quote:  “When it comes to stock prices, the key lesson from my experience of making such mistakes of omission and some of commission – and learning from them – is that it is foolish to try to capture the first and last part of a stock’s move.  If you are right in your analysis, and the long-term fundamentals of the underlying business are good (even if the short-term hurts), you can make a lot of money in the middle.  That’s the most peaceful part of the wealth generation process – in the middle, not on the edges.”

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