TIL: Why stocks down 90% rarely bounce back

Today is a bloodbath. The Fear & Greed Index is at 16, and the losers list is terrifying.

• $QNCX: -91%
• $TIRX: -91%
• $GUTS: -68%

I see so many new traders trying to "catch the bottom" on these. They think, "It's down 90%, it has to go back up, right?"

Wrong.

Here is the quick math on why catching a falling knife is dangerous:

If a stock falls -50%, it needs to gain +100% just to get back to breakeven. If a stock falls -90% (like $QNCX), it needs to gain +900% just to get your money back.

That is not a bounce; that is a miracle.

Most of the time, a -90% drop isn't a "sale." It means the fundamentals are broken, or the liquidity is gone. Look at $TCGL up 941% today—that is the outlier. The reality is usually $QNCX or $TIRX, which just wipe you out.

My Tip: Stop looking at the percentage down and start looking at the chart. If a stock drops -50% in a day, don't buy the dip. Wait for it to consolidate (move sideways) for a few days.

Let the panic sellers flush out. If there is no "bottom," you don't want to be the one digging it.

How are you guys handling the red today? Buying or waiting?