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

To: Elroy who wrote (63723)	4/10/2020 5:12:11 AM
From: bruwin	Respond to of 78967

Lets suppose you want 20% to consider a stock a BUY. See the problem ?" So let's apply your "20% Rule" to a stock that has found recent favour with one or two on this board ..... Back in May 2018 you could have bought TLRD for about $23. It had been in a slight uptrend. You decided to apply 20% to its price and would therefore regard it as a 'Buy' at around $28/share. It moves up to $28, it's reached your 'Buy' target so you buy it for $28. After about a month it hits its high of about $35. So far so good ........ BUT THEN .... It takes a Nose Dive and keeps diving until it has now lost ((28 - 1.86)/28)x100 = ~93% of what you paid for it. So what changed from around May 2018 ? Seems that the "problem" lies within the quality of a company's financials which are reflecting how well, or how Badly, the company is doing, and not so much about "Analysts(?)", or anyone else for that matter, setting "price targets". Revenues are declining, Net Incomes are declining, etc. IMO, "price" is very much part of Technical Analysis(TA) seeing as all TA indicators incorporate "price" in their calculations. And I have this analogy about TA being the "cart" and FA (Fundamental Analysis) being the "horse". And like the saying says, .... "One shouldn't put the Cart before the Horse" ....... IMO.