If I may make a point or two here ..............
One of the world's most successful investors has a saying, "Be Greedy when others are Fearful, and Fearful when others are Greedy".
Now he has made $Billions by first of all identifying Stocks/Companies by interrogating specifics within their audited Financial Statements and then applying Percentage Target Ratios that incorporate those specifics.
At the end of the day, a company that meets ALL, or a vast Majority, of those Specific Target Ratios is, not going to be doing badly as a business.
When a company shows exceptional "Compliance" with those criteria, especially consistently and over the longer term, he regards them as having Durable Competitive Advantage.
Needless to say, such companies are not that many. However, by lowering his Percentage Targets slightly, which spreads the net a bit wider, there will still be companies that are doing very well as businesses.
Examples in this regard, IMO, would be AMAT, or MCO, or LRCX, etc.
The point I'm trying to make here is that when events such as you allude to, such as "dot.com crashes", or "NASDAQ FALLING 78%", that is when the share prices of virtually ALL companies fall.
And those falls will, generally, have NOTHING to do with the business performances of those types of aforementioned companies. It will be the Markets, as a whole, Falling. ..... THAT is when that successful Investor gets "Greedy". He will be keeping his finger on the "BUY" button and will wait for the "Panic" to begin subsiding because those companies that, overall, met his Criteria will be the FIRST to show share price increases.
And the "qualification" of a Value Stock revolves primarily around its price being less than its Book Value per share, but there could be numerous other reasons why its price is "in the basement" which will not ensure that its share price is most likely going to improve once the Market, itself, improves ...... |
