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Some trades don’t work out the way you hope. And then there are trades that keep not working out, over and over again, until you finally face the truth.
Nike (NKE) has been that trade for me.
I kept thinking NKE was going to catch a bid. I kept waiting for the reversal. I kept giving it the benefit of the doubt because, well, it’s Nike. But the market doesn’t care about your nostalgia or your thesis.
For whatever reason, it just hasn’t been working. And when something isn’t working, you don’t double down on hope, you face it and move on.
The Danger of Anchoring to a Name
Here’s the thing about trading household names: Brand strength doesn’t always translate to stock performance. You can own the best logo in the world and still see your shares go nowhere or worse.
I’ve worn Nike shoes for years. Some pairs I like, some I don’t. That’s been the problem lately, inconsistency. And the market hates inconsistency.
Then you look at Crocs (CROX). I have yet to meet someone who owns a pair and doesn’t love them. That kind of customer satisfaction is rare, and it shows up in how the business performs. Their customers don’t hesitate, they come back.
Part of that comes down to simplicity. CROX doesn’t try to be everything to everyone. It’s essentially a molded product, pick your color and you’re done.
It’s straightforward, predictable and scalable. Meanwhile, NKE’s product lineup can feel scattered, chasing trends instead of focusing on what consistently works.
Right now, NKE just isn’t a name I want exposure to.
The Lesson I’m Taking Forward
This isn’t about bashing Nike. It’s about recognizing when your thesis isn’t playing out and having the discipline to walk away.
I don’t care if it’s a blue-chip name or a company you’ve followed for years. If the stock keeps disappointing you, that’s the market telling you something. Listen.
The best traders aren’t the ones who are right all the time. They’re the ones who know when to cut a loser and move on without letting ego get in the way.
Nike taught me that lesson again, and I’m done ignoring it.
Geof Smith
Geof Smith Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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Disclaimer: Since 12/05/2024, the trading approach discussed today has published 66 trade alerts. 65 of 68 have returned as winning trades, for a 95.6% win rate. The average return per trade, winners and losers combined, has been 12.84% on an average holding period of 10 days. With a $5,000 starting stake, every trade targets about $841 in returns, and every trade you see today will be based on that $5,000 starting stake unless otherwise stated.
