No. of Recommendations: 1
falling knives has been used a bit loosely.
- is it at multiyear lows, not just bigly down from highs?
- has it significantly underperformed primary peers, sector, industry?
- is shareprice greatly underperforming 2-3 quarters of business fundamentals?
- have they retained\improved management with prior solid track record, or recently hired rentals in the c-suite?
catchables should hit some of these, but unlikely all.
i no longer think underperforming the market is useful falling knife metric, as long as year+ market performance is mostly huge weights +\- outperformance of 1-2 sectors.