How not to catch a "falling knife"?

[brt77]

Hi all,

With the recent sharp fall in share prices, alot share are becoming very attractive. Seeking "experienced" investors' opinion on how not to catch a "falling knife".

Thanks
Brt77

[yeokiwi]

I had caught many falling knifes before. But, most of the knifes are relatively high quality and so, it turned out to be quite ok.
Till date, I am always tempted to buy a bit regardless of whatever crystal balls are predicting.

I know US is slowly falling in abyss..
Europe has sunk into quicksands.
China may be imploding...
Japan is collapsing due to its internal debt..

BUT, the share price is lower than last week leh...hehe..
buy a bit.. tikam tikam...
Worst case, sit on my stocks and collect dividends...

[dydx]

It is rare to find people throwing away prized or valuable shares at hugely discounted prices in a major market panic. In 100 market days, 1 or 2 such days may happen, if you are lucky!

What do serious investors do? Well, they go shopping for those shares that they have already identified as good to take advantage of their low and falling prices.

[memphisb]

dxdy, think forumer brt77 is asking how not to be stab by a falling knife whilst purchasing the discounted stocks.

My answer is to do so when the price stop falling.

[yeokiwi]

dxdy, think forumer brt77 is asking how not to be stab by a falling knife whilst purchasing the discounted stocks.

My answer is to do so when the price stop falling.

How do you know when the price will stop falling???

[FFNow]

How do you know when the price will stop falling???

I would like to know too..

[brattzz]

How do you know when the price will stop falling???

We don't know when the price will stop falling...

Why not start buying on the uptrend instead?

[memphisb]

My advise don't do bottom fishing until the world gets greedy again.
That is roughly the time its bound for reversal.

[Jared Seah]

I know I can't bottom fish... I did not buy at the lows on March 2009, nor did I in 2003. My track record speaks for itself

All I can do is to either wear a glove (have cash as buffer), or only catch knifes that are "less sharp" (defensive blue chips with dividends).

For those of you experiencing your first 20% correction, take notes! How you reacted, how you feel, what actions you took, etc. Then compare with all the theoratical knowledge you have built up. This helped me a lot on my comeback. Just sharing my experience.

[KopiKat]

In times like these, all the more we have to just follow the wisdom of Warren Buffett. Just focus on analysing the fundamentals of the companies.

It's just too difficult and time consuming to even try to understand and predict how the events in USA and Europe are going to play out. I bet you even the experts in the US FEDs and Euro Bank are unable to predict with a great degree of certainty how their actions are going to impact their economies.

I won't pretend that I'm not affected by the fears in the market even after having gone through a few of these massive sell-downs over the years. But, I'm going to try to ignore the market (and my own) fears and slowly buy more of the stocks I already own (that means I'd already done my homework previously). It's times like these that allows me to grow my wealth at a faster gradient than my usual 6-8% p.a. target.

Wish me luck!