On Oct. 29, Alphabet had its worst day on record, down more than 12%.[2] If you've been investing for even a year, you know the thought that came next for a lot of people: Google, 12% off? That's a sale.
I've had that exact thought. It cost me.
In this week's free piece, Everyone's Calling AI a Bubble. Here's How I'd Check., I argued the better question isn't "is it a bubble" but "who's paying the bill." Today is the full version — a four-part checklist, run on Microsoft, Alphabet and Amazon one at a time, with the numbers pulled from their own earnings releases. As of Tuesday's close the Nasdaq was still 8.1% below its Oct. 6 record.[1] This won't tell you where it goes next. It will tell you how to read the receipt.
The Dip That Wasn't
I once bought UnitedHealth after a sharp dip. My logic felt airtight: a blue-chip at half its worth, and I was being fearful when others were greedy. The problem was the earnings. They were slipping, which meant the stock wasn't dipping — it was repricing. I refused to admit I was wrong, then cut the position out of anger. It later rallied past $350.
Wrong on the way in. Wrong again on the way out.
A shirt on the clearance rack because the season ended is a deal. A shirt on the clearance rack because it has a hole in it is just a cheaper shirt. From the price tag alone, you can't tell which one you're holding.
TL;DR — The price tells you something's on sale. Only the business tells you why.
That's what this checklist is for. Run it on these three giants and you get three different answers, and the one that fails the most checks isn't the one that had the worst day.
