Mike is a full-time father, a part-time writer, and an investor.
Mike offers his opinions on technology, sports, and investment as a part-time writer, part-time investor, and full-time father. He understands the challenges that buyers of equities that are trading at a discount encounter. Some of these stocks are known as “catching a falling knife,” even though they might present fantastic purchasing opportunities.
Avoid these stocks: Lucid and Affirm
Many well-known equities fell by 60% or more after the 2022 bull market, especially those of high-growth, speculative businesses. In this post, Mike identifies two stocks you should steer clear of for the time being.
Lucid: Expensive, High-End Electric Vehicles
Mike doesn’t despise the idea of high-end electric cars with extended range and cutting-edge technology, but he thinks there isn’t enough EV adoption yet to justify the high costs. This view is reflected in the stock’s almost 60% decline since its high.
Investors weren’t pleased with Lucid’s recent proposal of a $7,500 discount for consumers who purchase its automobiles. After the news, the shares fell more than 10%, despite price decreases from Tesla and Ford. Even after a 60% loss, Mike is staying away from Lucid because he doesn’t currently see the positive case for this EV company.
affirm: In a downturn, you can still buy now and pay later.
Despite having successful agreements with Amazon and Stripe, Affirm’s stock has been declining over the past year. The company’s shares fell this week after it failed its earnings expectations and disclosed a 19% personnel reduction.
Consumers will probably be more cost-conscious in the event of a worldwide recession. While some customers could use Affirm to ease the strain on their budgets, according to Mike, many shoppers will forgo purchasing entirely. Mike doesn’t see a strong case for buying Affirm’s shares in an environment where consumer spending is going to decrease dramatically.