NetNews Usenet Archive 1992 #31/NN_1992_31.iso/spool/misc/invest/15608

Internet Message Format | 1993-01-02 | 1.3 KB

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From: [e-mail] (Ojvind Bernander)
Newsgroups: misc.invest
Subject: Re: Contrarian trading in stocks priced
Date: 3 Jan 1993 02:13:38 GMT
Organization: California Institute of Technology
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>|Does anyone know what the performance is for major exchange stocks whose price
>|has fallen below a dollar?  (I'm not speaking of "penny" stocks, but rather
>|NYSE, AMEX, and NASDAQ stocks that at one time traded above 5, but for one
>|reason or another have fallen down to prices like 1/2 or 11/16).

For the fun of it I randomly picked 16 stocks from the NASDAQ listings that
had been below $1 during the last year.  Several had bounced back to $2
and one all the way up to $4.  I asked the question:  What if I buy when
it dips below $1, how well would I do?  Well, the average price today
of these 16 stocks was $17, so the profit was meager.  Note that bancrupt
stocks would not have shown up in the listings, so I might have done worse.
Of course, you might still investigate the effect of volatility.

-- Ojvind