Timing is everything because the market is a weighing machine.
If the orange line represents a reasonable value for this company, you can see how greatly over-paying can be detrimental to your wealth. The graph above shows the price history of a very well run consumer goods company. This is an example of regardless of how "well" a company is managed, the price will not defy the laws of gravity. Cycles are a part of most every industry. Business value is something that is born out of many years of operation, not a quarter or two. Without a proper exit strategy or position sizing methodology, consistently making money in stocks is going to be almost impossible.
Best,
P. Franklin, Jr.
June 27th, 2017
All opinions and estimates included in this communication constitute the author’s judgment as of the date of this report and are subject to change without notice. This communication is for informational purposes only. It is not intended as an offer or solicitation with respect to the purchase or sale of any security. This information is subject to change at any time, based on market and other conditions. Any forward looking statements are just opinions – not a statement of fact.
Investing may involve risk including loss of principal. Investment returns, particularly over shorter time periods are highly dependent on trends in the various investment markets. Past performance does not guarantee future results.