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Strategies & Market Trends : Value Investing

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Nya_Quy

To: Madharry who wrote (63716)	4/9/2020 7:09:08 PM
From: Elroy	1 Recommendation Read Replies (1) of 78967

Well, if they have to keep adjusting the stock view and price target in real time, as the price of the stock is changing, it becomes ridiculous. Lets suppose you want 20% to consider a stock a BUY. A stock is $20. You do your calculation and you decide that the fair value target is $26. Ok, that's more than 20% upside, so you rate it a BUY. A few days later, the stock has moved to $22. Your target is still $26. $22 to $26 is no longer 20% up, its about 18% or 19%, so when the stock has moved from $20 to $22 it is no longer a BUY, and therefore you should change your rating lower, or move your price target higher so that the upside is at least 20% above the new current price of $22. See the problem?

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