I find the discussion about which crashed stocks might be worth a bet quite intriguing. The mention of Warren Buffett's "cigar butt" strategy—buying severely oversold large-cap stocks—resonates with me as a potentially smart approach, especially in the current market climate. It seems like a method that could uncover hidden value, and I appreciate the insight into how this strategy might be more suitable right now.
I was particularly surprised to learn about UnitedHealth Group $UnitedHealth(UNH)$
The list of heavily sold-off stocks is also noteworthy to me. Lululemon's $Lululemon Athletica(LULU)$ drop to below $200, with a 50% cut this year, stands out as a significant decline. Similarly, Novo Nordisk $Novo-Nordisk A/S(NVO)$ being down 40% year-to-date and Eli Lilly $Eli Lilly(LLY)$ dropping 15% before its recent earnings are figures that make me pause and consider what might be driving these trends. It feels like there could be opportunities hidden in these dips.
I note that after jumping 10%, Buffett's cost for UNH is still higher than the current market price. This detail makes me hesitant about buying UNH right now. I am inclined to think that if even Buffett's entry point is above the current value, it might be wise for me to wait and see if the price stabilizes or drops further before I consider investing.
When it comes to deciding which heavily sold-off stocks I would buy on the dip, I am drawn to Lululemon and Novo Nordisk. Lululemon's steep decline suggests to me that it might be undervalued, especially if the brand's long-term appeal remains intact. Novo Nordisk's 40% drop also intrigues me, given its prominence in the healthcare sector, and I wonder if the market overreacted to recent news.
Eli Lilly's 15% drop before earnings is another point of interest for me. I am cautious here, though, as pre-earnings dips can sometimes signal deeper issues. I would need to dig into the earnings report and market reactions more thoroughly before making a move, but it's certainly on my radar as a potential opportunity.
Overall, I feel that the current market offers some intriguing possibilities for value investing, following Buffett's lead. However, I am mindful that my decisions should be based on further research and a clear understanding of each company's fundamentals. I might consider revisiting these stocks after more analysis or if the prices dip further, aligning with a cautious yet opportunistic approach.
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