Fallen stocks can rise, but don't count on it.(investment techniques)(Brief Article)

It's always tempting to buy a stock just because it has fallen dramatically from its highs. The reasoning for such a move goes like this: "If people were willing to pay $30 for this stock a little while ago, it must be a real bargain at $10."

The problem with such thinking, says The Turnaround Letter, is that the stock may soon look like even more of a bargain at $1. If the stock goes to zero -- and stocks do go to zero - you'll lose in just the same way if you bought it at $10 as the person who bought at $30.

Stocks with high valuations have come crashing down in recent months the instant they were hit with disappointing news. Some may, eventually, be terrific bargains, but many will not. Therefore, The Turnaround Letter, which specializes in separating the real bargains from the fakes, thought it might be useful to share some of the …