by iceman5 » Wed Jan 23, 2008 9:33 pm
I believe when Apple fell that low, it was already owned by alot of huge mutual funds and was already a massive and well known company. The fall to a price that low was caused by the internet bubble. It wasnt a no name tiny company coming out of nowhere.
Of course if some mutual funds bought your stock it would be great for you because it would skyrocket, but they wont buy in because they cant. If it was trading for $5 right now and a mutual fund wanted to buy some, they would have to buy so many shares to put even a tiny dent in their portfolio that it would be $50 before they finished buying it. They wouldnt want to buy that company for $50 because its not worth $50, so they are forced to avoid it altogether even if its a great company (and Im not saying its not because I have no idea).
None of this is to say it wont go up in value. The company could get bought out and double next week. Its just that the odds arent high that it will go up. Normally when youre investing in stocks, you want to build a portfolio of numerous stocks that have a very good chance of going up and then if you want to , you can add a few that have a smaller chance of going up but if they do, they could go WAY up. But you wouldnt want the majority of your money in risky stocks like that because they could also lose 70% of their value in 1 month.
iceman5