On August 10th, in my post titled "
Time to Start Buying ", I mentioned 4 stocks that people should buy in the carnage that ensued that week - Apple (AAPL), Research in Motion (RIMM), Crocs (CROX) and McDermott (MDR). At the time, these stocks had one thing in common. They had beaten earnings estimates in the preceding weeks and had soared only to be dragged down to pre-earnings levels during that week. If you heeded my advice, below are the returns you would be sitting on as of today (depending on when you bought the stock between my recommendation and today):
AAPL - 7% to 18%
RIMM - 15% to 30%
CROX - 16% to 32%
MDR - 6% to 21%
In a post a few days before that, I had mentioned that
headlines are meant to be just that - headlines. More often than not, they don't provide any meaningful investment advice - rather they tend to scare or entice investors in a way that normally ends up hurting those who pay attention. In the scenario above, headlines caused panic and those who sold into this panic lost, while those who bought high quality names into the dip came out on top.
-- Faisal Laljee