Falling Out of Love With Invitae Stock
People always ask Google for stock price predictions as if someone actually knows. They’re making a fundamental mistake newbies often make – investing in stocks instead of companies. The only thing we can be certain of is the old adage, “it’s about time in the market, not timing the market.” That’s provided you’re investing in quality companies that don’t implode. If you’re investing in risky spaces, some always will, which is why you diversify your portfolio.
Catching falling knives refers to investors who continue to purchase shares of a stock as it falls without knowing where the bottom will be. To avoid this problem, we limit the total amount of capital committed to any position. Once that’s exhausted, we don’t purchase additional shares, even if they’re trading at a 90% discount. That’s precisely where we’re at with Invitae (NVTA).
The Good News
A company’s management team should always focus on what’s most important. When the conversation changes from growth to survivability, that should raise some eyebrows. Risk-averse investors who look at Invitae with a fresh set of eyes will notice how much emphasis was placed on the recent transaction which largely removes concerns around debt coming to maturity in 2024.
