Tuberous Begonia is a flower. And it's also traders' slang for a stock that has fallen 80% or more from its high water mark. You want to avoid tuberous begonias because they will wreck your portfolio returns.
When I was just a pup, coming up in the business as an equity trader, my mentor told me to watch out for tuberous begonias. I had no idea what he was talking about. He explained that it's a stock that has "gone down the tubes" and "it's begone."
Once a stock has declined in price by 80% or more, there is a real likelihood that it will eventually become insolvent. It's not easy to identify these stocks before they begin their descent into oblivion, but there are measures you can take to lessen the damage to your portfolio.
This is what a tuberous begonia looks like.
One way to gauge the viability of a stock that has dropped sharply is to use the Z-Score. This is a very technical analysis so you may not find it practical.
The fall-back method is to simply ask yourself this question: has the fundamental reason for my purchase of this company changed significantly? If it has, get out.
Here is a list of potential tuberous begonias.
It's too late to get out of the way of these stocks, but you can learn from them nevertheless. If you can dodge the next tuberous begonia your returns will be way better.