Let's focus on tier one biotech stocks, because those are the easiest to value.
Sorry Peter,but for me it is difficult to determine the "value" of any stock, even if they are ranked on "tier one" or among the "bluest of the blue ship group".
(Take for instance the 30 most active stocks on the N.Y. Stock Exchange today.) Only MO was up $2.29. The other 29 including GE,C, JPM, JNJ, AXP. PEP among others, were all on the red.
I believe "value" depends on what people are willing to pay at any particular time and that depends on many variables.
Even things like gold,diamonds, real estate,stamps, rare coins,famous paints.etc..etc. fluctuate on price or "value" over time. They all have their own "trend". The real estate market was hot in Japan and California a few years ago and for a while even down here in Florida you could buy a house and sell it at a profit the following month.
Coming back to stocks,we still are on a bear market.<g> I remember for instance the "valuation" appraisal on this thread of SEPR by I.J.Frankel a few months ago. (I have nothing against his approach and he may be quite right on his conclusions.)
If I remember well, the stock at the time was in the forties and the appraised value was in the sixties.(I bought a few shares but was forced to sell it within a few days as it triggered my stop loss point.)I bought some SEPR again in early May at 11.50 but was forced to sell by the end of the month with almost no gain.
I know that you as well as most people on this thread do not follow T.A.and I don't want to try to change your mind about it.<g>But for me it has saved a few dollars over the years and I have to stick with it.
I am always interested in hearing experts opinions and appraisals of the "value" of a particular stock, but I would not buy without doing some D.D. of my own, trying to get what I would consider a good entry point and deciding how much I would be willing to risk if I am wrong.<g>
(And I am not going to refer to any charts to try to make a point.<g>)
RAGL
Bernard |
