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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Elroy who wrote (63712)	4/9/2020 12:22:10 PM
From: bruwin	Read Replies (1) \| Respond to of 78959

"Price targets are pretty meaningless .... " ..... and that's where I'd stop the quote. On what basis is anyone going to be able to predict a price for a company's share ? At any one time the price of the share is "agreed to" between two parties .... one wants it the other is prepared to sell it, and they end up at an agreed price ..... and so it continues. There are times that a company's shares are highly sought after, for a variety of reasons, and they'll just keep going up and up in price ... maybe hitting a P/E of 35 to 40+. So at a P/E of, say, 36 Value players would say, "That's too expensive" .... but then the price rises further and the P/E is now 45 !! ..... So if you bought at "36" and sold at "44" you could have made a tidy profit ! IMO, what is probably more relevant is the Trend of a company's share price. Is it going up for a sound reason, such as the Quality of its financials reflecting a growing, well managed business ? If that's the case then buying its shares should be a good option, especially if its ongoing financial results continue to be positive. If, for example, one takes a company like MCO with its P/E history (and no share splits) about 3 years ago it was trading at a P/E of about 80 ! But if you bought it at (A) you would have made a healthy Capital Gain going forward. Similarly at a P/E of 60, buying at (B) you would have got a good Gain ...... and likewise at (C) at a P/E of about 36. But throughout those 3 years MCO's TREND was Up and, I'd say, for good financial reasons ...... On the other hand, if a company's Trend is up, but its financials do not support that move, then, IMO, best to stay away ....