Talking Wealth Podcast: Stock Market Trading and Investing Education | Wealth Creation | Expert Share Market Analysis Buying the Dip vs Catching a Falling Knife
Sep 10, 2025
Discover the critical difference between buying the dip and catching a falling knife to safeguard your investments. Delve into common misconceptions about 'cheap' stocks and learn how market valuation changes impact decisions. Gain insights on recognizing true dips versus falling knives with practical examples and technical tools. Explore the importance of backtesting and waiting for confirmation before making moves. The hosts break down real-world case studies, helping you distinguish opportunities from pitfalls in the stock market.
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Price Reflects Changing Valuation
- Markets move in waves so dips occur within higher-highs/higher-lows trends.
- Treat a lower price as a changed valuation, not a grocery-sale bargain.
BlockInk’s Sharp Drop Then Quick Recovery
- Phil used BlockInk's 33% drop as an example of an overreaction that reversed quickly.
- The stock hit its low and recovered within weeks, illustrating a classic dip opportunity.
James Hardy: Free-Fall Misread By Buyers
- Phil used James Hardy as an example of a stock in prolonged free-fall that fooled buyers.
- It bounced into a gap then resumed falling, showing why ignoring prior downtrend history is risky.
