Art, Let me rephrase that, I liked all my stocks : their fundamentals are great, in most of them earnings kept growing sequentially, so the PE kept growing and growing.
In the example I have in mind, on a quarter when Earnings did not grow sequentially by 25%, I think to myself : fundamentals are GREAT, YoY, it was still 40% growth.
When sequential growth stopped, I tell myself it's cyclical, and YoY is the right figure to look at.
When YoY earnings growth dipped below 25%, I tell myself it's a single bad quarter, the next one will be better.
I know you probably are way better at FA than I am, but for me, I find that many of the FA measurements are not strict enough to be followed rigorously. When you like a stock, you just like it, and nothing is going to change your mind until something bad happens.
The fundamentals of a stock is good? That's a subjective statement. Fundamentals at the very least has to be compared against earnings growth vs P/E, not the size of the future market. It's a very easy trap for novices who invest as a hobby like me to fall into, and from the looks of it, the experts are not immune either.
jmho. |
