What Did You Buy Today?

[stockguru]

(09-13-2019, 07:22 PM)Otter Wrote: I really like this recent article by Chuck Carnevale, explaining his philosophy on value at time of purchase. He is far more eloquent and a more effective writer when it comes to conveying these concepts than I could ever hope to be:

https://seekingalpha.com/article/4290081...ket-timing

Short-term fluctuations in price don’t really concern me on a long-term time horizon. I will never buy any stock at the absolute bottom. That’s market timing. I can’t do that. All I can do is decide if value is fair or better at the time of purchase.

A stock that is 30% above its long-term average P/E, with a current price 7% higher than where it should be with a historically average P/E in more than two years carries too high of a value risk for how I analyze purchases. When that stock is forecast to grow earnings by only single-digit percentages over the next two years, that coupled with the current low yield indicates to me that the income stream I will be purchasing is not the best use of capital I can make. If MCD had a current yield like T, or was forecasting 25% annualized growth, my opinion would certainly change.

T and MCD don’t belong in the same sentence. How dare you lol. T has way too much debt and is at the sane price it was 5 years ago. It has 6% yield for a reason. Everyone has there own opinion. It’s what  makes a market. For every seller there’s a buyer. MCD has had a lot of funds buy in recently even above $220. So while some say it’s over valued, others see opportunity 

I wish I bought AMZN and NFLX 5 years ago when they were over valued. Heck they don’t even have a PE lol.