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After a huge rally like we’re had this year, it’s easy to fall into one of the most common buy on the dip traps.

Just because a stock is cheaper than it was, it’s not necessarily a bargain. There’s nothing that says a stock has to return to its previous price after a dip. And especially that it has to return to that former price on your schedule.

Let me use Disney (DIS), one of the 25 stocks I’m tracking in my Dip-O-Meter on my paid subscription site, as an example.

Disney is down 0.26% today as of 2:40 p.m. in New York to $144.52. (It closed at $142.15, down 1.90%.) Which actually qualifies as a pretty good day for Disney lately.

The stock has been hammered in the last three quarters of 2021. The shares traded at a high for the year of $201.91 back on March 8, 2021. And for $185.91 on September 9. And for $176.87 on November 8.

The “dips” from those price levels amount to a drop of 39.7% from March, of 28.6% from September, an 18.3% from November 18.

So where do you buy this dip? Obviously not a $185 on September 9 or $176 on November 8.

Right now Disney has broken below the $154.69 level from December 10 and the next support I can find is at $127 or so back in August/September 2020.

On a purely technical basis, I’d be willing to buy at that level.

But there’s another way to look at buying Disney on the dip, a way that tells us something important about other buy on the dip candidates and opportunities.

What I try to do when I look at a stock that has plunged to a level that, in comparison to past prices, looks attractive is to see when the general market environment and the fundamentals of the individual stock might change.

Looking at Disney, the general market environment looks unattractive for the first quarter of 2022. In 2020 and 2021 the winter quarter brought an upsurge in Covid-19 infections that took a bite out of economic activity and out of consumer and investor confidence. I don’t see any reason to think that 2022 will be any different. Even before the arrival of the Omicron Variant, the Delta Variant promised an increase in infections as more activity was forced inside by winter weather. I think that this is forecast that is almost certain to come true.

This pattern also has a company specific effect on Disney. A resurgence of infections and any possible tumble in travel is likely to stop the improvement in Disney’s parks unit in its tracks.

And the Pandemic looks to have pulled new subscriber growth for Disney+ ahead so that now the company is guiding growth forecasts for the streaming service lower for 2022. Disney’s solution, and it seems a totally reasonable one, is to up its spending on content for Disney+ in 2022. That will, the company says, and this makes sense to me, drive more new subscribers to the platform. And as the big bulge in Pandemic pull-forwards for subscriber growth moves into the past, growth rates for Disney+ will start to climb and to look more impressive to Wal Street.

The problem, though, and it’s one that Disney flagged in its most recent conference call and guidance, is that producing new content takes time, and marketing new content in order to generate subscriber growth takes even more time. Disney+ should see the positive effects of all this spending on content toward the end of 2022. (Which, of course, means that in the beginning of 2022, investors will see the effect of all that spending on the balance sheet.)

Where does that leave the buy on the dip investor?

I think you’ve got several alternatives.

The one requiring the most discipline would require you to wait until March 2022 or so to buy Disney because the worst of the market- and company-specific negatives will be behind the stock by then. I think you’re likely to get Disney then at something like the $127 level August-September 2020–another $15 a share down from today’s close. That’s not an insignificant amount of cash.

This approach does, of course, leave you open to missing the turn with all the worry and anguish that entails.

The second approach says the stock is, at some point, cheap enough so that you’re willing to take a chance on missing the absolute bottom. The August-September low of $127 is roughly 11% from today’s close. Maybe that’s close enough. (This logic does require you to believe that the $127 low of August-September will mark the 2022 low.That’s questionable given that the Federal Reserve looks to be raising interest rates in the last half of 2022. And that if the Fed doesn’t raise rates it will b because the U.S. economy has slowed.)

A third alternative might be to split the difference and buy part of a position now and part later.

Me? I prefer to wait on Disney and other buy on the dip candidates until I see evidence of a turn in the market in general and/or in the fortunes of the individual companies.

That plays out very differently for specific stocks among the 25 buy on the dip candidates that I’m watching on For Applied Materials (AMAT) and other chip equipment stocks, the company and sector specific trend as we head into 2022 is already so strong that if I can get these shares now on some dip, I’d buy them. For other buy on the dip stocks, Oatley (OTLY), for example, I’d like to see evidence that the company specific problem that has pummeled the stock has reversed its negative trend. For still other buy on the dip candidates, MGM Resorts International (MGM), for example, I’d like to see an improvement in the general economy and the Pandemic trends–buying a Las Vegas heavy casino and hotel operator as we head into the winter season for infections strikes me as bad timing.

That’s some of my thinking about when to pull the trigger on any of the 25 stocks I’m following in my Dip-O-Meter on I’ll revise that tool–and some of my thinking too I’m sure–on Sunday when I plug new numbers into that model. (Some of the readers on have asked if I can put up a spreadsheet that you can track at home as part of the Dip-O-Meter. Don’t see why that won’t be possible. I’m working on it for the next revision.)