When to buy and when to sell?

Unfortunately, we do not believe that perfect answers are possible for either question. There are solid answers, logical answers, and smart answers - but no perfect answers.

On the other hand, there are very obvious times when a stock should be bought and sold. Therefore, obvious trading mistakes can be avoided by investors who understand the basic principles behind valuation. Prudent investors can take a reasoned approach to finding appropriate answers through the application of smart research.

The main reason why perfect answers are not possible can be found in the classic Warren Buffett quote: “The fact that people will be full of greed, fear, or stupidity is predictable. The order is not predictable. "

Buffett talks about the fact that the exchange may temporarily evaluate stocks and is often overlooked. In times of greed, the market is capable of overvaluing companies, sometimes to an extremely high level. When fear reigns (perhaps as it is today), the market can significantly underestimate a company.

To be clear, we do not suggest that we can tell people how to time the markets perfectly. On the contrary, we believe that the perfect timing of individual stock price movements or markets is an undeniable impossibility. As the great investor Bernard Baruch aptly put it: "Don't try to buy at the bottom or sell at the top. This can't be done except liars."

On the other hand, we suggest that investors have the ability to determine the True Worth ™ value of an operating business and would find it reasonably available.

We believe it is common sense truth that faster growing businesses are worth more than slow growing businesses. The logic behind this statement is logical and understandable. The faster a business grows, the greater will be its future revenue stream that investors will return to present value. Another way to look at this is that faster growth creates more profits for markets to capitalize. The more earnings you have, the more valuable your business will be.

There is an urban legend that characterizes Albert Einstein saying compound interest is the most powerful force in the universe. Whether Albert Einstein really said this is unknown. But the power of unification is truly remarkable. So it wouldn't surprise us that a genius like Albert Einstein made such a statement. Start investing, don't wait. I can help you start investing today, why reinvent the wheel as you learn from my 15 years of presence in the stock market. I have witnessed the ups and downs of the market firsthand and I know what it is like to start investing your hard earned money.

Disclaimer:

LUMIBASIS has used reasonable efforts to obtain information from reliable sources, we make no representations or warranties as to the accuracy, reliability, or completeness of third-party information presented herein. The sole purpose of this analysis is information. Nothing presented herein is, or is intended to constitute investment advice. Consult your financial advisor before making investment decisions.