| | | The style or method you suggest doesn't appeal to me. I just don't see myself saying, "the fundamentals will improve, I'll watch the stock, and when the fundamentals do show improvement, I'll buy."
When/if the fundamentals show improvement that's often immediately that day reflected in the share price, if not before. So then I say to mysef, "I knew it. I shoulda bought earlier". I hate to have to buy up now (hate to chase). Sometimes/oftentimes, it seems to me the stock moves up beforehand, and when the good financial fundamentals are announced, people sell into that, and the stock goes nowhere. So I would buy in and not see a further stock rise. Although sometimes, if a second subsequent quarter shows good fundamental, financial improvement, then people will sometimes push the stock higher in the belief a turnaround is for real and not a one-quarter event.
Also, as regards buying when-fundamentals-show-improvement, that sort of suggests I would have to keep many stocks on my watch list to review when the quarterlies are issued to see the financials. That's based on my style of course of wanting to have a large number of stocks in my portfolio. A large watch list seems cumbersome to me. I'd rather buy when I see the value opportunity, hold on and ride it down and wait for the improvement. Considering for example QRTEA, which I just recently mentioned, I'm in at a much higher than current price, but have added considerably when I see that the CEO, COB and importantly the great investor John Malone, have added to their positions on the drop in disappointing earnings. I feel I don't need to know where the low is or when the fundamentals will improve. I will bet on the acumen of these gentlemen and the good previous history of the company, and I am comfortable in believing, one-way-or-another, the stock will revert to a mean, a price higher than currently.
Of course in these presumptions/assumptions/bets, I have been wrong many, many times - as peope here and elsewhere on SI have been kind enough not to have pointed out. -g-
Otoh, sometimes I've been right, and that seems to have made the difference (winners outweighing losers) -- or so I would like to believe. |
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