Buying the crashers...

[Petrus1983]

I want to invest £5k in a high risk strategy (in for a penny, in for a pound) - does anyone have any background of buying the bottom 5 equities each day, holding for X amount of time and then selling on the bounce back? By wild speculation most equities do 'bounce back' after a big downturn, but am I completely deluded (highly potential option) and excluding those who don't bounce back and infact disappear completely?

[jeff m2]

Your strategy will/may get you 5 to 10% gains if accompanied with a little bit of work.

I do not think just plonking down a grand on five losers is a good plan, how do know the bottom????

Maybe select the best two of your five losers, 1k on each and be prepared to buy again if they drop further. If it is a fairly sound company that maybe disappointed on earnings, it should come back.

Make sure the short ratio isn't up around 10 or you may wait a while for any dead cat action

There is no free ride, a little research is necessary.

[Sideways Rich]

Be careful trying to catch a falling knife! :-)

[fat80b]

Only monkeys pick bottoms!!

That said, a fair few of the stocks I have tend to follow patterns on news.

MJW were 500p at Christmas time, fell to 400p on results/ news and then went all the way back up to 460+.

A braver man than me could have made on that one.

I suggest that you do it and post here when you make your trades so we can all follow your success.

Bob

[Petrus1983]

Mmm - so having given this a little bit more thought I think I need to give it even more thought

[HenryJM]

Buying into companies that are going through a bad patch is definitely a good way to invest so long as you research them. But with all investment you need to research, you are just gambling if you don't.

[K12beano]

Yup. Like which numpty would buy Asos because it was going through a bad patch a fortnight ago.

Got burnt on that one

RGD hasn't turned out too sweet either!

But previously made a reasonable amount out of RR, RSA and BP by trying to pick them up in a rough patch...

It can be done, but blindly punting on the fallers is hookers and cocaine territory as far as security of your investment. The only surefire winner will be your broker!

[jeff m2]

Here is what can happen.

This thing dropped for good reason, I thought it was worth $4.00, I watched the bollingers on the then current 3 day chart and it started to turn so I jumped in at 2.80.
Then it turned south.
Apparently I was the only one on the planet that thought it was worth $4

I decided to hold, I re-bought making my av price 1.91 and eventually sold at 2.12.
I did make a profit, but not the way I like to do it.
I consider this a disaster trade that I managed to get out of.

This was with a share I was already aware of, not one I chose just because it dropped and I still fuxxxx up.