17.54%

EW Scripps

10.29%

Warner Music Group

9.70%

Ballard Power Systems

5.50%

Zale (NYSE: ZLC)

3.79%

While yesterday's drop in five-star stock Chesapeake Energy (NYSE: CHK) may have caught our community off-guard, one-star stocks are fully expected to fall hard: Over the 20 months since CAPS started, one-star stocks dropped an average of 11.4%, annualized.

Did CAPS call the fall?
In late August, for instance, CAPS member billal119 was already predicting that Zale would lose its luster:"Price rose extremely high today, up over 16%, but only due to forecasts of higher sales (based on higher sales report from the company). The market is doing horrible, and a luxury item like jewelry will not be able to create a profit in the short term."

Not surprisingly, shares of the jewelry retailer are down a depressing 82% since that call. In fact, just last week, Zale said its quarterly loss widened to $45.3 million, and withdrew its earnings guidance for the year -- consistent with billal119's warning.

The bearish takeaway?
Always trust your own eyes above all else. Very specific growth estimates -- especially ones that come from management themselves -- are discounted into a stock's price. One of your most important jobs as an investor is to determine whether or not those discounts are justified. As CAPS' billal119 understands, any company can pop on rosy guidance, but if those forecasts aren't rooted in economic reality, it's just a matter of time before the gains start to get grounded.

The final Foolish move
Investors often focus strictly on stock price movements, without realizing that developing a proper stock-picking process counts most.

Over at Motley Fool CAPS, thousands of investors are Foolishly sharing insightful investment tips to help, above all else, identify tomorrow's big movers. Over time, consistently reverse-engineering winning -- and losing -- stocks will help you become a more Foolish investor.

Log in to CAPS today and start participating. It's absolutely free -- and a lot of fun!