TL;DR

Nike’s stock plunge mirrors past market crashes, driven by overvaluation and blind faith. History repeats—will investors learn?

Story

Nike’s stock price tumbling below $72.26—a four-year low—isn’t just a market blip; it’s a flashing warning sign. Remember the 2008 crash? Overvalued assets, blind faith, and poof—gone. This feels eerily similar. Nike’s high P/E ratio (over 20) is like a Jenga tower waiting to fall.‣ P/E Ratio: Tells you how much you’re paying for every $1 of a company’s earnings. High P/E can signal overvaluation. People cling to the 2% dividend yield, but that’s like rearranging deck chairs on the Titanic. Quality issues? Trash products? Yep—like the dot-com bubble, hype can’t mask fundamental flaws forever. The ‘AI-powered shoes’ idea? Pure desperation. Reminds me of Enron dressing up accounting fraud in complex jargon. Investors pinning hopes on the new CEO are in for a rude awakening. Like a captain changing mid-storm, leadership shuffles rarely save sinking ships. Those buying more at $81? Classic sunk cost fallacy.‣ Sunk Cost Fallacy: Throwing good money after bad, hoping to recover losses. Historical marketing success? Past performance is never a guarantee of future returns. This isn’t just Nike; it’s a symptom of a larger disease—market irrationality. So, what’s the lesson? Beware the hype, question everything, and remember: Trees don’t grow to the sky.

Advice

Don’t chase falling stars. Due diligence beats blind hope every time. And those ‘guaranteed returns’? Fairytales.

Source

https://www.reddit.com/r/stocks/comments/1io35rp/nike_stock_hits_4year_low/