Timeline for What is a robust method to determine if the stock's market price is below its intrinsic value and can be bought in a Fundamental analysis perspective?
Current License: CC BY-SA 4.0
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| May 4, 2019 at 9:15 | comment | added | Pherdindy | Right I guess I have to just use my experience and careful studying to make the best decisions maybe in the future. I might just invest most my money in the e-commerce business as it is steadily earning me 30% of my money at a faster pace with almost no risk. I guess financial markets are suboptimal and riskier at the moment especially being 28% down after a newbie like me entered a time where most of the markets slumped down. The market is still quite fearful and hesitant I can see the low volume and inactivity | |
| May 4, 2019 at 9:12 | comment | added | phk31 | I'm in no place of course to advice you in how you invest and what approach you take. However, the original value investing approach put forth by Graham does not agree in any manner with pure technical analysis and looking at stocks as stocks. The underlying of stocks are of course the companies themselves and their fundamental characteristics. Valuing companies appropriately is a highly discussed and complex field with large bodies of scientific research. If it were easy, everyone would be good at it. There really is not one method that is all three: easy, accurate and quick. | |
| May 4, 2019 at 9:11 | comment | added | Pherdindy | The stock that made me the most money is a retail company that sells construction materials. I just stuck with the idea that the economy is great, lots of people are improving their homes, and that there is ongoing expansion of 100 stores over the next 3 years. The stores seem to be filled with people and useful and quality items. So I just hold the stock then no matter how many technical "guru"s indicate that it should reverse soon since it's over bought since it's IPO back in 2017, it just keeps going up because of its potential. | |
| May 4, 2019 at 9:08 | comment | added | Pherdindy | Thanks that is a good start. I do agree with technical analysis as being used as an aid. I have been doing pure technicals to begin with, but the most important aspect at the end of the day if it is really a good company you're buying. I have bought several stocks before that are extremely oversold and have showed signs of reversals, but fundamentally, they're very bad and have bad profits so no matter how many times people tried to bottom pick, they got surprised with a surge in selling to get out of the stock. | |
| May 4, 2019 at 9:04 | comment | added | phk31 | Read 100 opinions and papers of people that claim they know and you will get methodologies that vary all over the place. As I mentioned, look into the methodology of a DCF. This is the theoretically most accurate estimation of 'intrinsic/fair' value. A phenomenal teacher in this field is A. Damodaran, professor at NYU. His insights on valuation are great. For a check list: That is something that greatly depends on your investing approach, outlook, portfolio composition etc. Some may prefer P/E (individual investors often), investment banks commonly use EV/EBITDA for more mature companies etc. | |
| May 4, 2019 at 9:00 | comment | added | Pherdindy | Yes I have read books as well saying that people have tried to come up with a perfect mathematical solution using historical data and have realized that the paradigm has shifted and makes those formulas useless. However, there has to be a set of rules that should work generally--something like a checklist that will have a higher probability of success than failure. | |
| May 4, 2019 at 8:58 | history | answered | phk31 | CC BY-SA 4.0 |