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Should I Buy the Dip?



So many people presume they will know what to do when a correction comes. I wish it were that easy.

Hindsight is 20/20, and everything looks obvious after the fact. But I can tell you from first-hand experience. It’s nearly impossible to swing for the fences and buy up the significant dips when everything is burning around you.

Take the pandemic as an example. In March 2020, companies that I held, and had positive conviction in, fell 50%. It’s easy to look back now and see that these were buying opportunities, but committing capital to a company as it craters is testing for even the most unwavering Stalwart.

The narrative upon which you initially invested has now completely changed.

Nothing is obvious.

When the economy comes to a standstill, the world grounds to a halt, commodity markets fall apart, policymakers are changing the rules, and the government needs to step in to shore up the Fixed Income market. Will you be able to set aside emotion and dive in headfirst?

They say you learn from experience, and for me, my lack of a clear analytical checklist left me in a state of decision paralysis. Lesson learned.

Create your Checklist

Most of us mere mortals can’t separate logic from emotion in the heat of the moment, so make sure you set out some rules to guide you through those clouded moments.

You can think of your emotional state and the ability to make good decisions as sitting on opposite sides of a seesaw. If your state of emotional arousal is high, your capacity to decide well is low. A checklist helps take out the emotion and moves you toward a proper choice. It also keeps you from succumbing to decision paralysis.

This checklist will be different for everyone, but here are some examples.

Does the company still hold a competitive advantage?
Is this correction macro-led or idiosyncratic? - is this just contagion effects from a market-wide sell-off, or is this a company-specific correction?
Has the growth outlook for the company dramatically changed?
Is this an earnings or non-earnings event? For example, did the stock fall off the back of a disappointing quarterly earnings call, or is this a non-earnings-related correction? There will always be some added volatility during each earnings season, so it is important to make the distinction.
Analyze the value indicators of the company - Is the company competitively priced relative to others in its sector? This is done by measuring the key metrics (P/E, P/S, FCF, etc.) against the company’s competitors.
Analyze the momentum indicators for the company – 200-day moving average, MACD, RSI, Support and Resistance levels. These technical indicators will help you establish when the stock is overbought or oversold.
Analyze the quality indicators for the company - Compare Free cash flow metrics, Cash Flow Return on Equity figures, ROIC, Gross Profits and EPS stability relative to competitors
If these metrics remain strong, so too should your conviction.

No Shortcuts

Some of these terms may be new to you, but you need to know them if you are looking to be a successful stock picker over the long term. Buying stocks simply because they have fallen and you expect them to mean revert is a recipe for disaster.

More than 40% of all companies that were ever in the Russell 3000 Index experienced a “catastrophic stock price loss”, which we define as a 70% decline from peak levels which is not recovered.

Don’t just assume these stocks will come back. Many of them don’t. You have a much greater probability of picking a mega loser than a mega winner.

“While the most successful companies generated massive wealth over the long run, only around 10% of all stocks since 1980 met the definition of “mega winners”.

It’s perfectly ok to be a contrarian, but be a well-informed contrarian, don’t just blindly follow the stock down. The odds are not in your favour.

With the new year just around the corner, take some time to set out your investment plan and checklist for the coming year. Fortune favours the prepared.

As always, you can find more investing information at

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Final delivery as DJ retires

By Michelle Crean There’s hardly a Killarney home he hasn’t been to – but now DJ O’Driscoll has stood down from his duties. Friday night marked delivery driver DJ’s retirement […]




By Michelle Crean

There’s hardly a Killarney home he hasn’t been to – but now DJ O’Driscoll has stood down from his duties.

Friday night marked delivery driver DJ’s retirement from the Killarney branch of Corcoran’s Furniture & Carpets, a position he has held for the last 15 years.

On Friday night, colleagues from all three Corcoran’s Furniture & Carpets stores gathered in the Killarney Height’s Hotel. DJ was also joined by his daughter and her partner for the special night.

“After almost 15 years of steadfast work with Corcoran’s, DJ has been a constant pillar of support for his colleagues and has helped the company go from strength to strength,” owner Kieran Corcoran said.

“Corcoran’s would like to wish DJ the very best of luck for the future and hoping that he enjoys his retirement. Many thanks to Killarney Height’s Hotel for hosting the staff night on Friday. A great night was had by all!”


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Rowers pull together for Order of Malta

Members of Flesk Valley Rowing Club had a strenuous but successful morning on Sunday when they collectively rowed the distance from Malin Head to Mizen Head. And it was all […]




Members of Flesk Valley Rowing Club had a strenuous but successful morning on Sunday when they collectively rowed the distance from Malin Head to Mizen Head.

And it was all done indoors on rowing machines in support of the Killarney Order of Malta.

Just before 11am the Valley armada ‘left shore’, and approximately 40 members aged from 12 to 50ish set to their task with enthusiasm. By midday someone reckoned that Barack Obama’s Plaza had been reached but unfortunately there was no stop for tea, just a splash of holy water, a mouthful of Lucozade and a few jelly babies for the lucky ones!

As the kilometres clicked slowly by the temperature started to rise and the cry went up from the gasping veterans to open all the doors!

No such problems for the junior relay crews who had a fantastic morning rowing, laughing, and racing each other all the way to the finish.

The junior members who took on the half-marathon distance individually were amazing throughout and got stronger as the finish line came into view.

“We’re delighted with how the morning went,” Tadhg Kelly from Flesk Valley said.

“There was a great atmosphere in the venue, and we are grateful to all the parents and Flesk Valley supporters who came along to encourage our young and not-so-young rowers. It was great too to see the members of the Order of Malta in attendance to offer their support, and the club would like to thank everyone who donated on the day.”

Tadhg also expressed his thanks to the underage coaches and committee members for looking after everyone during the event. He especially wanted to mention everyone at Celtic Steps and the Killarney Racecourse for facilitating the club and Workmens Rowing Club and Glenflesk GAA for the use of their equipment.

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