Home Capital Group: Don’t try to catch a falling knife

I’ve been asked a dozen times in the past few days about Home Capital Group. My look at it combines some fundamental, technical, and a general understanding of the housing market. Conclusion: Avoid the stock because there are going concern issues.

Speculators love to catch falling knives in hopes of riding the big rebound. A falling knife is a market term for trying to pick a bottom on a stock that has fallen off a cliff. You might catch it, but you’ll likely get cut up if you do. This is not value investing, this is pure unmitigated speculation. Most investors should not play this game. There is no prudence whatsoever and even most of the professionals will get this wrong…

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