Buying stock because it's cheap = fail

Quote from wheel4hummer :

Buying stock because it's cheap = fail

Why is that? After a crash of the economy like that it always gets back up. So if you buy cheap stock in a company that you are almost sure will go back up, why not? Free money. Just gotta do your homework to make sure it doesn't die along with your money.

Quote from wheel4hummer :

Buying stock because it's cheap = fail

Yeah just look at warren buffet but if you mean buying indiscriminately then yes you are most likely to get into trouble, warren buffet finished three business related degrees before he started investing in the stockmarket

Quote from evilpimp :

So if you buy cheap stock in a company that you are almost sure will go back up, why not?

I said buying stock only because it is cheap is a bad idea.

Quote from wheel4hummer :

I said buying stock only because it is cheap is a bad idea.

thats very true and sadly some people will choose which stocks to buy for the wrong reasons, the classic one in brittain being to buy M & S shares because they're a high street name and respectable.

Looks like there might be some great buying opportunities in the next few days If the dow punches below 7800 tonight or early next week I think we are going to see another significant move downwards... alternatively if you see the markets bounce we might be seeing a platform forming for a recovery - personaly though I think the downside hasn't finished yet