I've made my best money by using fundamental analysis to identify a company I think is undervalued and then accumulating shares over time, sometime at a price that is 50% of less then my initial buy. It takes patience and a months to years time frame, but have delivered me a number of 5- to 8-baggers,
ML.TO is a perfect example. I first bought in March 3, 2005 at 81 cents, grabbed more over the next few months down to the 60 cent level, sold some of the 60 cent shares for 90 cents apeice later that year, and now the rest are worth over $5 apiece. When the share price makes it up to $6, I'm going to sell some more just to claim my first 10-bagger.
One of the things I like about the markets is that there are a number of ways to make money, so you can pick the one that suits your skills and personality. I'm naturally a buy and hold type of guy, and my main investing skills are researching fundamentals and picking bottoms, so you can see why I follow the approach I do, other than occasional, often less than successful, forays into momentum investing when lured it into by people like RR.
I can see perfectly the logic of buying into strength, but buying when a stock is out of favour is usually is the best approach for me.
LC |
