clock menu more-arrow no yes mobile

Filed under:

Taking Stock of Notre Dame Football

Buy low and sell high is axiomatic in investment business. How do you know a stock has bottomed, though?

1. Examine the stock's downward trend. It usually moves down in stages. A stock does not bottom out or recover in one fell swoop. Has it changed leadership recently? Has that leadership demonstrated an ability to turn a company around?

2. Look at its fundamentals. Has it shown signs of recovery based on sound fundamentals? External forces and bearish opinions may be driving it downward. If your stock does not move downwards on bad news, that's a good indication that it cannot move lower.

3. Is there any insider buying? Is talent being attracted to the business?

4. Research what analysts are saying about the stock. Those with the least commitment have abandoned it quickly. When long-term stock holders question or abandon it but the fundamentals are strong, consider moving in. A stock has to rid itself of speculators before recovering. Look for unanimous irrational hatred of the stock.

5. Examine its chart. The stock may show upward movement with a drop as a selloff. This is a typical "cup with a handle" pattern (A and B above). The stock is consolidating, possibly with a slowing of growth temporarily. It is getting ready for a growth spurt. As the stock soars upward again, buy it, if you had not invested for the long term.

Those who have invested for the long term bought in based on the company's values, strategy and position in the market with faith in the corporate leadership to make all necessary changes. Some investors may have been attracted to the stock when it was high-flying. Their expectations were disappointed. They bought high and have sold low.

Reassess your evaluations periodically. But if the stock has sound leadership, good fundamentals, insider buying, an attractive chart, and is positioned well in the marketplace, you may want to include this stock in your portfolio.

Is Notre Dame football such a stock? You decide.