When buying stocks, do you decide based on its price performance or on its value performance?
I believe "Value" is more important. Value is actually one indicator of a good or bad price for a particular stock. If an issue is trading at say $10 and the WS analyst's estimate fair market value to be $20 then it's probably a good buy unless it has serious fundamental flaws or issues. It's always a good idea to exercise caution and do your own research prior to purchasing any stock.
I would have to say "value" too. Many times, once a stock has already moved, it is too late. Keep in mind that value is a very relative term and there are different kinds of value. Just my opinion.
I trade on price performance. I like a stock to show sign of strength and be trending up on a daily chart and then a slight pullback before I enter a trade. But the again, I'm a technical trader.
Price performance is a very poor guide, it may even be useless. Personally I “like” stocks going up slowly and smoothly over the medium term but by and large the past performance is no guide to tomorrow.
The same is true with value. Cheap value stocks cannot be predicted, only owned. The payoff doesn’t come predictably from one stock, but from a basket and then over time.
Whatever your investment style is, you must apply it to a basket or you will not reap the correct benefits of your investments. Buying value stocks, especially contrarian ones, has a history of success because cheap stocks are normally stocks people do not want to own for narrative reasons not quantitative ones. The market will pay you to put that straight. The market will not pay you to jump on the bandwagon so price performance is a very sketchy reason to buy a stock.
by thecollecktor6 years ago
It is my intent to discover the formula for investing in penny stocks that goes beyond the hype currently being used. What criteria do you use?
by ngureco3 years ago
Which Are The Best Trading Strategies In The Stock Market?
by irenev178 years ago
mean buying stock in a band or writer, photographer, even a filmmaker. Not in the traditional 'fund-raiser' sense, but actual shares of digital media.
by shaunese7 years ago
What are good, cheap stocks to purchase for the beginner?I want purchase cheap stocks in a stem cell research company... what should I look for?
by HarshitG5 years ago
Hey,As many would be aware of that stock market is one of better way to invest and reap benefits from . So what i want to know is do you guys really invest in Stock market or stick with Fixed deposits and bank interest...
by qwark8 years ago
The price of an oz. of gold is almost $1200.00's.Why would anyone buy gold at it's peak price?Would you buy a stock at the highest price it has historically reached?
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