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Do Stock Sell-Offs Pay Off? These Experts Warn Not to ‘Bottom Feed' on New Lows [Yahoo! Finance]
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Losers tend to keep losing, academic literature show. The classic refrain of " buy the dip " may sound like a siren song. The recent selloff in well-regarded software stocks may lead some investors to think it's time to snap up seeming bargains. (Think companies like Adobe ( ADBE ), Salesforce ( CRM ), Intuit ( INTU ), and Workday ( WDAY ), all of which are trading around 52-week lows.) But should you leave them alone for now? Some Wall Street experts have recently warned "don't buy new lows," citing academic studies that show that momentum can be a dangerous force to be reckoned with. The list of stocks making new lows may include software stocks with good reputations, DataTrek's Nicholas Colas and Jessica Rabe wrote in a note Tuesday evening. But "our advice is to be very careful if you want to bottom feed on any of them." With broad market indexes sitting near record highs, investors may be inspired to bargain hunt. But some bargains are discounted for a reason, according
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