Have you ever bought a stock, you were

so confident it was going to go to the

moon, but the price kept dropping and

dropping and dropping? You are not

alone. I can tell you that even the best

investors in the world, they have got

stocks they buy that keep going down

initially.

You can't avoid it. But the important

thing is to do the right thing. So when

is it right to add more? When is it

right to hold? And when is it right to

get the hell out? If you think that the

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unpredictable this year, you are not

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coming weekend, and I'll share with you

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Have you ever bought a stock and then

after you bought it dropped like 25% and

then you cut loss but the moment you cut

loss it rebounced back and went on to go

up 300%. You went ah right. And have you

also had an experience when you bought a

stock, it dropped 25% and you sold it

and it kept going down and down and down

and never came back and you go,

so there's always this dilemma, right?

What is the right thing to do? And I'm

I'm here to tell you that the right

thing to do is to follow your predefined

investment or trading plan. So what does

that mean? So I tell my students that

before you buy a stock, you must be very

clear. Is it an investment or is it a

trade? because they're two totally

different games. And whether it's a

trade or investment, you must already

have preset exit rules. For example, for

trading, what's the preset exit rule?

Once it hits a stop-loss, you get out.

Very simple. You don't ask any

questions. And after you get out, if it

keeps going lower, then who cares? But

after you get out and you rebounds, who

cares again? Because it's a short-term

trade. Once you get out, you find

another another trade. But when it comes

to a an investment then it's the

different story. Investment has got

different exit routes. You don't sell an

investment just because the price went

down. You have to look at the

fundamentals of the business. If the

price drop but the business is getting

better, sales are rising, profits are

growing, then it's damn stupid to sell.

In fact, in those cases, you should hold

and buy even more. So, I'll go into the

specifics in a short while. But the

whole point is this. Let me repeat that.

Before you buy a stock, you must already

know what are the conditions to exit. So

when those conditions happen, you get

out with no emotions. It's purely

objective. The trouble with most people

is that when they buy a stock, they

always think about it going up, but they

never think about it going down. So

they've got no plan to exit. And then

when it starts going down, they panic.

Oh my god. They get caught like a deer

in the headlights. You don't want that

to happen to you. So once again when it

comes to speculative trading which I

always say is like a one night stand the

exit rule is very very simple. Once you

before you enter or when you enter you

must already have a predefined stop-loss

and profit target. So for example this

was a trade I entered recently and I

shared with my uh subscribers in my

stock trading group. This is Salesforce

and Salesforce you can see it made a

double bottom pattern. You can see it's

oversold on the stoastics hitting the

lower Ballinger bands. So this is an

example of a short-term trade setup

purely based on technical price action.

Got nothing to do with the fundamentals

of the company. But based on the price

action, there's a probability that after

double bottom pattern, the price uh has

a chance of rebounding up and you think

I want to take that short-term trade. So

in this example, for example, for this

example for example, right? So I got it

as a trade uh over here. All right. And

then where do I put my stop loss? Stop

loss is usually placed uh right below

the recent swing low. So right there

that is the stop loss SL. So from the

entry price which is about here about

226 to the stop-loss price that is what

we call the one R distance. So R

represents the risk per share. And I

want to make sure that in a trade if I

risk a dollar I want to make $2 or make

$150 or $3. But I must make more than I

lose. So my profit target will be

somewhere let's say around there at this

previous resistance. That's my profit

target and then this is roughly about

more than 2 hour. So in trading again

it's very simple. You enter the trade

and if it hits the profit target you get

out. If it goes higher who cares. If it

goes back down who cares? But once you

enter the trade and if it hits a

stop-loss, you get out as well. So over

the long run, you find that in trading

you you will win 50 to 60% of the time

and you will lose 40 to 50% of the time.

But when you lose, you will lose 1 hour.

When you win you win more than 1 hour,

1.5 to 2 hour. So overall, you make

money. If you're new to trading and you

got no idea what the hell is 1 hour,

what is 2 R? What is position sizing?

How many shares do I buy? Then do watch

some of my videos on position sizing and

stock trading. So one of the good ones

to start with would be this video. You

can see position sizing and stock

trading. This was some time ago. But in

this video I go into specifics of again

you know where you place your buy entry,

the stop loss, the profit target and how

do you calculate the number of shares to

buy in order to risk a small amount and

to make a bigger amount. Now again

trading is short-term based on price

action but investing is a totally

different game. investing is more medium

to long-term and we look at multibagger

returns 50% 100% 200%

2,000% return which is what I got for

Palanteer for example in the last couple

of years and for investing the focus is

not so much on the short-term price

action the focus is more on the

fundamentals the intrinsic value of the

business so it's a it's a totally

different game and I'm here to tell you

that when it comes to investing you

can't simply or you shouldn't simply

sell just because the share price

dropped temporarily after you bought it.

I can tell you that some of my best

investments that gave me the biggest

returns started out by dropping

significantly. So for example, I I first

bought Palanteer in 2022 at about $13.

That was my initial entry price at about

$13. And after I bought it, what

happened? It dropped all the way to five

bucks. IT DROPPED 60%. And people panic

Adam, what are you doing? Okay. Did I

cut loss? Did I sell? No. I held on and

I kept buying more. I bought more. So

that my average cost um came down to uh

where $9, right? $9 my average cost. And

then it went all the way to $200. Now

it's like $168. So it's still up

$1,700%.

Same thing with Apple. I first bought

Apple in late 2015 at about $29. Yeah,

$29, right? After bought Apple, it

dropped close to 25%. It dropped to like

20 bucks. But did I sell? No. Right. I

kept buying more. I kept holding, you

know, and now Apple's up like a,000%

since that price as well. What gave me

the confidence to keep holding and

buying more even as the share price

dropped? How did I know that it was not

going to drop and never come back? Why

was I confident that it was going to

eventually rebound and go higher? Very

simple. because I focus on the

fundamentals of the business behind the

stock. Just remember that when you buy a

stock for investment, you're not buying

a lottery ticket where you're trying to

predict where's it going to go in the

short term. When you buy a stock, you

are buying a piece of a business. And

so, as long as the business is doing

well, the share price will go up over

time. But in the short term, the share

price could go down. Because in the

short term, the the share price is

driven not always by the fundamentals of

the business. It's driven by emotions,

by sentiment, and by manipulation. So

you got to make that distinction. So in

other words, if the share price of the

stock I bought keeps dropping and

dropping and dropping, I'll take a look

at how the business is doing. So the

business fundamentals means the sales.

Is the sales rising or falling? uh the

the operating income, the cash flow, the

return on equity, the profit margins and

the economic mode. So if the business

itself is doing well, so in other words,

the business continues to grow, sales

are growing, profits are growing, uh

return on equity is very high, then no

worries. And what's the right thing to

do in that situation? The right thing to

do is to buy. All right? Is to buy more

shares or simply add more to the

position.

Why? Because if the business is

improving and the share price is

dropping, it tells you the share price

drop is emotional. It's based on

narrative and it's always not going to

last. It's going to be short-term that

eventually what's going to happen is

once the sentiment shifts, the price

will eventually reverse back a lot

higher because over time price always

follows how the business does. But the

short term they could be uh going

different directions. All right. Now,

having said that, do I keep buying uh

unlimitless? Of course not. So, the

whole idea is I buy until I've got a

full position in the portfolio and I

don't add more. So, what's a full

position? Well, for example, if I had 10

stocks in my portfolio or I plan to have

10 stocks in my portfolio for each

stock, I'll never add more than a 10%

allocation. That's the limit. Once I hit

10%, I don't buy more. And then

eventually when the share price rebounds

and goes higher, the 10% position will

grow organically to 15 20%, and that's

fine. I let it run. I do not sell it

purely to bring back the allocation to

10%. In other words, I don't rebalance

once it grows organically. Let's take a

look at a few recent examples. Remember

that not too long ago, Alphabet, the

share price kept dropping and dropping

and dropping because what was the mood,

the sentiment on the stock? People are

saying that oh chat GPT will kill Google

search is over that company's going to

die and people panic oh my god and what

happened in 2022 the share price dropped

uh from $150 all the way down to 80

bucks that was like uh about 45% drop

then 2024 2025 they had that same fears

but on top of that there was all this

fear that the government was going to

break up Google they're going to force

them to sell Chrome and stuff like that

so Again, all that narrative, all that

emotions, all that manipulation cause

the share price to drop another 30% back

in 2025. So, what was the right thing to

do at the time? To panic and sell like

everyone else or to hold and buy more?

Well, myself and my students, we held

and we bought more. Why? Very simple.

Because we ignored the share price. We

looked at is the business doing well?

Was the business improving? And the

answer was yeah. So let's take a look at

uh the the business fundamentals back

then in 2022 and 2025.

So again if you look at uh Alphabet also

known as Google right let's check out

the revenue and you can see what

happened in 2022

when people saying that company's going

to die and again in 2025 what happened

revenue continued growing you can see

the operating income continued growing

and the free cash flow

over here

free cash flow and the operating cash

flow more importantly kept growing as

well. So when you see that you know that

business doing better and better share

price going down ignore share price add

more and buy more. Well at least that's

what I did and that's why you know

Alphabet now has it made me a lot of

money up 200 and sorry up 194% and

285,000 in profits. Another example is

ASML. Stock price got whacked in 2022

and 2024 as well. Why? Again, purely

sentiment, purely manipulation, and

purely all this negative narratives that

oh, you know, China's going to have

another machine that's going to disrupt

ASML and all that kind of um emotional

stuff that has got no actual numbers and

facts supporting it. So in in 2022 for

example, ASML dropped 59%, dropped 60%.

And if you didn't understand the

business and you listen to all this

negative narrative, you would have

easily panked and sold right at that

bottom. And uh back in 2024, the share

price dropped as well. Dropped again

almost 50%.

All right. So I was holding ASML so my

students but we kept buying more until

we had our full position and we then let

it run. So what gave us the confidence

again? We looked at the business and we

said there's nothing wrong with the

business. Business doing very well.

Share price going down but business is

improving. Check it out. So this is ASML

and if we take a look at the financials

what happened in again 2022 and 2024.

Did the revenue drop? Did the profits

drop? No. revenue kept going higher.

There was an insignificant dip in

operating income in 2022, but it was

very insignificant. You can see overall

the operating income was still on a very

very strong uptrend. So that gave

confidence to myself, my students to

hold and kept adding more shares because

the business there's nothing wrong with

it. The share price drop was purely

sentiment and purely emotions. Nothing

to do with the actual performance of the

company.

And since then, the share price has

rebounded very, very strongly. You can

see all the way back. Now, it's at an

all-time high. And that clocked me like

107% in uh profits. And there's $126,000

in net profits. So, what happens if you

buy a stock and the share price is

dropping, but the business fundamentals

are dropping as well? Then, what's the

right thing to do? Now again let me

define what do I mean by business

fundamentals are dropping. What I mean

by that is that if the sales and the

profits and the cash flow they drop uh

more than 20%. Then that is significant.

If it's less than 20% it's like it's

fine right or it drops uh two year two

years or more in a row then that's a

significant drop in the business

fundamentals. So in this situation what

is the right thing to do? Should you

sell? Should you buy more? It depends on

why the business is dropping. So that's

where where I do additional research.

And of course with stock oracle, it

makes it a lot easier with the AI

insights. So if the business

fundamentals are dropping because of

short-term reasons, what are examples of

short-term reasons? Short-term reasons

could be uh business psych cyclical

reasons. So for example, if you take a

look at the digital advertising industry

in the long run, will digital

advertising grow? Yes. But it will not

grow in a straight line. There are

certain times when the business cycle

will peak and then you'll drop. You'll

peak, you'll drop. It goes through

short-term cycles. So for example, Meta

and Google are in the digital

advertising business. 2022 digital

advertising

dropped and so their revenues and

profits dropped and their share price

got whacked. But you know that in the

long run once the cycle comes back it

will grow again. So that's a short-term

uh reason. Another example, if you look

at cyber security spending, now in the

long run, would companies spend more and

more on cyber security? Yes, it's a

long-term mega trend. Digital

advertising long-term mega trend. But

again, it doesn't go up every day, every

week, every month, or even every year.

There are certain months or certain

years there's a drop in IT spending

because of a weak business cycle. And

again, same thing that happened in 2022

when there was a short-term drop in

cyber security spending. Cyber security

companies like Crowdstrike, Palo Alto,

Forinet, their revenues and profits

dropped temporarily. And at that time,

for example, Palo Alto, a great

business, the share price dropped almost

40%. But again it was all temporary

because once the cycle came back once

companies spent again on cyber security

once digital advertising surged again

then your Google your Meta your Palo

Alto the share price went back to

all-time highs. So in other words, if

the business fundamentals drop because

of short-term cyclical reasons, let me

write this out. Short-term cyclical

reasons or they could be short-term

problems that hit the business. And no

matter how great a business is, they

will all go through some kind of

short-term problems. Like I remember way

back McDonald's, their revenue and

profits dropped more than 20% because of

the mad cow disease. Now again, is that

a long-term problem or short-term

problem? Short-term because, you know,

the cow won't stay mad forever. You

know, one day the cow will be happy

again, right? So once the metad cow

disease was over, people went back to

eat burgers and the the revenue

rebounded, share price rebounded, and

you could have made a lot of money if

you look beyond the short-term problems

matter. Again, in 2022, it was not just

cyclical reasons or a fall in

advertising spend that caused that drop.

There were two more short-term problems

if you recall in 2022. Another one was

that Apple changed their privacy

settings where now Meta they couldn't

target the consumers like you and me

across different apps. We could choose

to opt out of the privacy settings and

because they couldn't target people

enough that affected their ad revenue

but again that was temporary because

eventually Meta was able to achieve the

same outcome using AI. Another problem

they had was that Mark Zuckerberg spent

a lot of money on the metaverse and they

were burning billions and billions of

dollars and all this was a perfect

storm. It caused the share price to drop

70% in 2022 if you recall. I'll show you

the charts in a while. Now at the time I

was not that concerned again. Why?

because I knew that all these problems

were short-term problems were cyclical

and they could be resolved and once they

are resolved

the business will then rebound back in

terms of revenue and profits and of

course the share price let me just draw

this in and then of course the share

price

uh would eventually rebound as well so

in such cases when I see the business is

dropping what do I do now I don't just

buy immediately I will hold first. So

whatever shares I'm holding, I will hold

it first. I won't buy first. I'll wait

for the fundamentals or the revenue that

is dropping for example, I'll wait for

it to stabilize. And ideally, when I see

that it begins to grow again, at least

the first quarter, then I will start to

add to the position. And it's not too

late because by the time the share price

has not yet fully recovered, it's still

pretty low. You can add a lot to bring

down your average cost. And then when he

eventually rebounds, you can make a lot

of money like what I did with Meta and

and Palo Alto. Let's take a look at some

examples. So back to the Meta example.

Uh if you scroll down, you can see what

I'm talking about. You can see that uh

historically meta's revenue was growing

very consistently as you can see. That's

their revenue. Their operating income,

their net income growing very

consistently as you can see. But 2022

you can see that revenue had a slight

dip but profits had a more than 20% drop

over here. So again why did it happen?

Three things. Number one drop in digital

advertising. There was a short-term

cyclical problem that you know would

come back. Number two Mark Zuckerber

spent a lot of money on the metaverse

and short-term that increased the cost

and reduced the profit. And again that's

a short-term thing. And the third thing

that happened was that Apple changed a

privacy setting that affected their

advertising targeting which again could

be resolved over time. But the market

thinks short term. The market panics and

never thinks long term and that gives us

an opportunity. So because of that you

can see the share price of Meta. Oh my

god. If you were in it that time you'd

have your pants, right? THE SHARE

PRICE DROPPED. OH MY GOD. IT DROPPED

FREAKING like 70%. And people who didn't

understand the business, oh my god, it's

going to die. It's going to go to zero.

Going to get out right now. A few one

thing that actually gave me a lot of

confidence to hold the shares and

eventually buy more is because

myself, my company, we advertise on

Meta. We advertise on Facebook and

Instagram.

And every year we spend actually a few

million dollars advertising on on

Facebook, Instagram and and Google. So I

asked my marketing director a very

simple question. I said are we cutting

our ad spend on matter this year? He

said no. He said we're going to increase

it. And I said how about next year and

the year after? He said yeah we we're

just going to keep increasing our ad

spend as our business grows. And I said

is there an alternative where we can

advertise elsewhere besides matter? He

said no. I mean with there's no

alternative you because we either

advertise on matter or Google and they

they are duopoly so that gave me

confidence that it's a duopoly you have

no choice especially in my part of the

world you either advertise on on on

Instagram Facebook or advertise on

Google so I knew that it's a matter of

time that their revenue is going to come

roaring back right so it helps when you

invest in businesses where you are a

customer yourself or you use the product

then you have the confidence

in in the business itself. But if you

didn't, then sure, you you'd definitely

panic, right? So, as it was dropping,

did I add to my shares immediately? No.

I actually waited for the profits to

stop dropping and to start growing

before I added more. So, when did it

happen? Well, let me just show you again

on Storacle.

Now again you don't have to wait for a

full year for the profit to um increase

to buy in. I look at the quarterly data.

So to look at quarterly data you just

click here quarterly data right and you

can see again in 2022 let me just scroll

back to 2020 uh2.

There we are. All right. So again you

can see in 2022 uh on a quarterly basis

again the profits were dropping dropping

dropping dropping dropping right but it

stabilized and it started to grow in

December it started to grow here so that

was a time when say okay the profits are

beginning to come back that tells you

that okay the short-term is over we

can start to accumulate shares and by

that time is it too late to buy during

end December and first quarter 2023 was

it too late to buy no if you look at the

chart you can see For example, let's

look at a chart over here. Okay, that by

late uh 2022, it was somewhere here and

in March 2023 somewhere here. So, if you

started adding here, which is what I did

again, you would not have caught the

bottom. No one can predict the exact

bottom, but you would have a pretty good

uh return even getting in there once we

saw that the revenue started to grow

again. And from there all the way to

where it is now, it's up 312%.

Now, let's take a look at the last

scenario, which is one where the stock

price is dropping, the business

fundamentals are dropping, and then upon

further research, we find that the

revenue is dropping, profits are

dropping, and it's not a short-term

issue. It is a long-term

structural issue. So, what does that

mean? That means to say it economic mode

or its competitive advantage is

deteriorating either because of

competition uh disrupting its uh

business or it could be technology

totally disrupting its business model

like how for example Blockbuster video

was disrupted by streaming which was

Netflix or how the Nokia phone was

totally disrupted by the smartphone like

the iPhone and the Blackberry and the

Samsung phones or a structural change in

in consumer preferences. So for example,

you find that people are now becoming

more and more healthy. They are buying

less uh canned goods, processed foods.

So companies like Craft Hind for

example, they've been in a long-term

structural decline. Or Boston beer,

which I used to own, uh ticker symbol

SAM, uh in a structural decline because

the research has now shown that the

younger generations are drinking less

and less. is a sunset industry where the

entire industry of the alcohol industry

is in a long-term secular decline. So in

such cases

um the fall in revenue and the fall in

profits doesn't look short-term. It

looks like it's going to continue over

the long run. And in such cases will the

share price be able to rebound back to

its highs? Unlikely. It may have a

short-term bounce but long-term share

price will keep going down. So these are

the ones that the right thing to do is

to get the hell out. That's right. Is to

just sell and take the loss like a man.

Again, the personal example I can share

with you is Boston beer, ticker symbol

SAM. So I first bought Boston Beer when

it was about $425.

And again, this is uh an alcohol

business. And after I bought it, the

share price kept going down and I say

fine, it's okay. But then when I look at

the fundamentals, the fundamentals again

um kept on deteriorating. So if you take

a look over here, you can see that yep.

So the revenue kept dropping, dropping,

dropping and the profits were kind of

like uh also in a on a downtrend. And

then I started to do my research and I

said, okay, is this a short-term problem

or is it a long-term problem? And after

a lot of research, I found that

long-term is a problem because there are

less and less alcohol drinkers and the

company's losing its uh competitive

advantage. So I said it's time to get

out. So I eventually sold it for

um yeah $295.

So I basically cut loss at 30%. So

again, no matter how great an investor

you are, you can't win them all. You're

going to have winning investments.

You're going to have losing investments.

But the good thing is that when you have

losing investments, uh the worst that

can happen is you lose 100% of your

money, right? The worst thing is it

drops to zero. You can only lose 100%.

But I've never lost 100%. In fact, if

you take a look at most of my losses

where I I cut loss, most of the time

I'll lose like 20%, I'll lose like 25%,

I'll lose like 10%. And in cases like

Boston beer is a big big loss about 30%.

Which is no big deal. Why? Because when

I lose I lose 20 30%. But when I win

like my Google, my Meta, my Palanteer,

my Microsoft, I win you know 100 uh I'm

up 100%. I'm up 200%. Palente upund

1,800%. So, as long as your winners are

much bigger than your losers or one

winner can make up a lot of losers over

time, you will beat the market

significantly and you will achieve

consistent double-digit returns. That's

the key to it. So, hope you enjoyed this

video and as always, may the markets be

with you and keep winning.

If you want to catch my latest videos,

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more about how you can learn investing

and trading live online. This is Adam

Coup and may the markets be with