Drawdowns Are Good For Us!

A drawdown is when the price of a stock falls 20% or more from its all-time high.

Nvidia (NASDAQ: NVDA), the leader in AI, is down 47% from its all-time high.

There was a time when it didn’t seem like Nvidia’s stock would ever go down.  Until it did…and boy, did it get crushed.  It went from a 52-week high of $292 down to $124.  That’s a 57% drawdown – or loss, in plain English.

Since then, it’s managed to “claw its way back” to only being down 47%…

Why did the stock give back 57% of its gains?

Reason number one: they missed their  quarterly earnings goal, and guided (projected) lower than analyst expectations like all of the semiconductor stocks.

Reason number two: the general market, of course, sold off hard.

Here’s what you need to know.  The fundamentals that made Nvidia a star haven’t changed one iota.

In the case of Nvidia, a drawdown gives you a second chance to buy a company at the center of the biggest technology boom in history.

That is why drawdowns are good for us.

*The Stock Market is For Everyone, Eric Milton’s short guide to stock market investing for beginners, is available in e-book and paperback formats.  If you like what you see on this blog, we hope you’ll take a moment to purchase and read the book, let us know what you think via a blog comment or Amazon review, and share this information with others!  Thank you.*

Disclaimer/Disclosure Statement: Information in this article is not intended to be a recommendation to invest in any stock.  Rather, it is presented for readers’ education and consideration when making their own investment decisions.  The author is long NVDA.


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