Wednesday Spotlight | The Tennis Court Dilemma

My favourite tennis shoes are Nike. I wear them every week, I know how they fit, and I trust them.

But when it came to investing in Nike, that familiarity didn't do me any favours.

I made the same mistake with Lululemon. I knew the brands, I understood why people liked their products, and I assumed that companies with such strong names would eventually find their way back.

I was wrong. And it cost me.

Back in March 2025, I bought Nike at around $73.14 a share. In September that year, I bought Lululemon at around $166.94.

On 13 May 2026, I sold both positions. Nike went at $41.87 and Lululemon at $123.50.

That's a price decline of approximately 42.8% on Nike and 26.0% on Lululemon, before trading costs and any other adjustments.

Those are painful numbers. But the money lost isn't the only reason these trades are worth revisiting. The bigger question is why I bought them in the first place, why I held on, and what I should have done differently.

1. Buying What You Know

When you use a product regularly, you see its strengths first-hand. I know my Nike shoes work for me. I can see why people buy them, and I have no particular reason to stop wearing them.

When Nike shares fell towards $73, it was easy to tell myself that a brand so familiar couldn't stay down for long. Surely a company with Nike's history and recognition would bounce back?

But liking a product and analysing a share are two different things.

A strong brand doesn't guarantee growing sales, healthy margins or a rising share price. Competition can increase, customers can change their habits, and a company can take longer than expected to get back on track. Even a good business can be a poor investment if you buy at the wrong price.

I didn't give enough weight to that distinction. I was too comfortable with the names, and I allowed that comfort to influence my decisions.

The market doesn't know which shoes I wear. It doesn't care whether I like the company. The share price reflects the decisions of millions of buyers and sellers, not my personal experience with a product.

That was the first lesson.

2. When Patience Becomes an Excuse

The second lesson was harder to accept.

When a share falls, it's tempting to give it more time. You remind yourself that the business is well known, that the problems might be temporary, and that the price could recover if you wait long enough.

Sometimes that patience is justified. Markets can overreact, and a temporary setback doesn't necessarily destroy an investment case.

But there is a difference between following a plan and hoping things will improve.

If you have set levels and rules for managing a position, those rules need to mean something when the share price moves against you. A grace period can give a position room to recover, but it shouldn't become an excuse to keep extending the deadline because you don't want to admit the original decision may have been wrong.

Looking back at Nike and Lululemon, I should have been more objective about what the evidence was telling me. Instead, I gave too much weight to what I thought the companies ought to be worth and not enough to what was actually happening.

There was another cost, too: opportunity.

Money tied up in a weak position cannot be used elsewhere. While you wait for a share to recover, other opportunities may come along with a stronger chart, a clearer entry and a better fit with your rules. The next trade isn't guaranteed to work, of course. But a position still needs a reason to be held beyond the hope of getting back to your purchase price.

3. Would I Buy Them Today?

Having sold both shares, I went back to ask a simple question: would either Nike or Lululemon qualify for a place in my portfolio today?

For now, neither does.

The business picture is one consideration, but the charts tell their own story. Both shares are trading below their respective 78.6% Fibonacci retracement levels and are still searching for support. Neither has given me the technical evidence I'd want before considering a new entry.

When a share falls through important Fibonacci levels and fails to establish support, I don't see that as an automatic buying opportunity. I see a chart that hasn't yet shown me where buyers are prepared to step in with conviction.

Could either share eventually recover? Of course. But until the price action improves and a more convincing setup develops, I'm happy to watch from the sidelines.

That's an important distinction. A share can become cheaper without becoming a buy. I need the business case to make sense, but I also need the chart to offer a sensible entry, with identifiable support and a clear level at which the trade would make sense — and a defined level at which it would no longer make sense.

Nike and Lululemon haven't met that test for me yet.

I'm not ruling them out permanently. I'm simply waiting for the evidence to change.

4. The Question Worth Asking

If you're holding a share that's well below your purchase price, try asking yourself this:

If I didn't own this share today, would I buy it at its current price?

If the answer is no, take a closer look at why you're still holding it.

That doesn't automatically mean you should sell. Your original investment case, valuation, technical levels, portfolio balance and risk rules all matter. But it is a useful way to separate today's decision from the emotional discomfort of taking a loss.

Your purchase price matters to your personal return. It doesn't determine what the company is worth today, and the market has no obligation to take you back to break-even.

Sometimes a position deserves more time. Sometimes the evidence changes and it's time to move on. The important thing is to make that decision on the merits of the investment, not on how familiar the name feels.

The Takeaway

I still wear Nike tennis shoes. They work for me, and I have no reason to stop buying them.

But I've learned to separate the product from the investment.

I don't need to dislike a company to decide that its shares aren't right for my portfolio. And I don't need to buy a share simply because its price has fallen a long way.

Nike and Lululemon taught me that brand loyalty can influence an investment decision without you even realising it. The answer isn't to avoid well-known companies. It's to assess them by the same standards as every other potential investment.

A familiar name is a starting point for research, not a reason to buy.

Save the loyalty for the tennis court. Protect your capital everywhere else.

Have a great rest of your week.