Stock Valuation Discussion

[Robandcindy2]

With some time to kill before the Brady-Manning show today I thought I'd get a discussion going on stock valuation. Specifically, how you determine a stocks "buy price".

I've read about several formulas and theories yet have never quite wrapped my arms around one that I felt was consistent. Graham Formula? Piotroski? DCF? Lots to choose from.

Recently I "blew a financial gasket" over KMB. KMB had been on my radar for a long time. First waiting to have the cash set aside and then waiting for the price to drop.

The only newsletter I subscribe to is Morningstar Dividend Investor run by Josh Peters. Josh had a KMB fair value price of $92. I'm finally ready to go for it and had a limit order in at $91.99 at Vanguard.

Thanks to Congress the price started coming down. Now I admit I wasn't watching things to closely and KMB bottomed at $92 and change I believe in September. It has since topped $106. So close....sooo close...

Discussion:
What do you use to determine a stocks fair value or buy price (not that they are necessarily the same thing)?

Is "value investing" necessary for the DG investor?

Thoughts on investing in companies which are historically priced above fair value (KMB, GPC, to name two)?

Enjoy the games today!

Rob

Go Pats!