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The market has humbled me more than once. I’ve run accounts up fast, only to watch them get knocked back down just as quickly.
Experiences like that teach you something important: discipline matters. And that discipline starts with knowing exactly which stocks to avoid before you ever think about taking a trade.
One of the biggest red flags on my list is a reverse split. I recently looked at Pagaya Technologies (PGY) and Nektar Therapeutics (NKTR), and the moment I saw reverse splits in their history, I was done.
I wouldn’t touch them. These are dumpster fires.
What a Reverse Split Really Tells You
A reverse split isn’t just a technical adjustment. It’s a giant neon warning sign that management hasn’t been able to maintain the business or the stock price the right way.
A healthy company doesn’t need to manipulate its share structure to stay listed. If revenue is growing, management is competent and the business is operating with discipline, the stock price takes care of itself.
When a reverse split shows up, it usually means the fundamentals already failed.
The price might look higher after the split, but that doesn’t mean the company is stronger. It just means the share count got reduced. Nothing actually improved.
And that’s where traders get trapped.
Why I Have an Absolute Avoidance Rule
I’ve been doing this long enough to know that some rules should be non-negotiable. A reverse split is one of them.
There are thousands of stocks in the market without these kinds of issues. Clean charts. Strong businesses. Real momentum.
So why spend time trying to force a trade on something that’s already shown you it has problems?
You don’t get paid for taking difficult trades. You get paid for taking smart ones.
Jeffry Turnmire
Jeffry Turnmire Trading
I host my Morning Monster livestream at 9:15 a.m. ET each weekday on YouTube, and then 30 Minutes of Awesome at 5 p.m. ET each Tuesday!
Please check out my channel and hit that Subscribe button!
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Important Note: No one from the ProsperityPub team or Jeffry Turnmire Trading will ever message you directly on Telegram.
I’m just a regular dude in Knoxville, Tennessee: a husband, father, civil engineer, urban farmer, maker and trader.
I’ve been at this trading thing with real money for 20-plus years, and started paper trading over 35 years ago. I have a knack for making some epic predictions that just may very well come true. Why share them? Because I like helping other people — it’s the Eagle Scout in me.
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. My Mechanical Approach Totally Gets Rid of the Emotion
I’ve been giving out trade signals so straightforward you don’t even have room to overthink things.
And I have a lot more of these straightforward setups ripe for the taking.
If you’d like to get your hands on them…
