Smith & Wesson Is On One Ugly Downside

Stocks on the downside often keep going down as bad news begets more bad news. For example, Smith & Wesson (SWHC), the well-known gun maker, on October 30, 2007 tanked 39.7 percent after it announced disappointing preliminary financial results. And then on December 7, the company cut its 2008 guidance even more and the stock dropped another 29.3 percent. Investors, who bought just after the first drop, saw there investment nearly cut in half in six weeks.

Buying on the downside is not a good idea. Wait until a stock stabilizes and returns to the upside before you buy.

Related Articles:

Beautiful Upsides - Price Upsides Are Winners
Ugly Downsides - Avoid the Price Downside

Posted December 27, 2007.