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valunvesthere (23.02)

Part 1 of 3: The practice of buying low and selling high



October 12, 2016 – Comments (0) | RELATED TICKERS: F , GM , TM

An example of buying low is when a company is struggling with defective products or named in lawsuits for manufacturing defective products, a scandal and etc. This greatly depresses the value of shares if the public stops believing in the manufacturer.

QUESTION? In practice our psycholgy has a big role in decision making, would you invest in a company that is facing litigation?  


Some examples of products that could of ended companies, but companies have recovered nicely are

• Chevrolet Corvair Legal fallout

• Ford Pinto Legal cases

• Audi 5000 Reported sudden unintended acceleration 

• Ford Explorer Criticism and controversies

• Toyota Recalls

• General Motors Defective ignition system investigation

QUESTION? In practice during the height of lawsuits and recalls, would you put a huge investment stake in those companies?


At present these companies are going through crisis management and full damage control 

• Samsung Galaxy Note 7 Battery faults , First recall , Second recall and discontinuation 

• Volkswagen Diesel emission violations 

• Takata Corporation Defective airbag recalls (2013–present) and the Cars affected 

QUESTION? In practice would you now put a huge investment stake in these companies hoping for a turn around? 



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