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Re: Ray's Question
Ray, I'm a lousy short-term stock picker, because I place the highest importance on fundamental valuation. If I have reason to believe a stock is selling at a multiple considerably below what its fundamentals suggest it should, then I like it. The problem with that, as famous economist John Maynard Keynes put it, is that "markets can remain irrational longer than you can remain solvent."
I try to examine and understand technical indicators and will sometimes buy or sell a stock on that basis also. That's one of the reasons I like Ernie's momentum model. But mainly I like buying stock in companies whose sales and net earnings are picking up, but whose stock price for one reason or another hasn't yet sufficiently rewarded that activity.
Ray, I'm a lousy short-term stock picker, because I place the highest importance on fundamental valuation. If I have reason to believe a stock is selling at a multiple considerably below what its fundamentals suggest it should, then I like it. The problem with that, as famous economist John Maynard Keynes put it, is that "markets can remain irrational longer than you can remain solvent."
I try to examine and understand technical indicators and will sometimes buy or sell a stock on that basis also. That's one of the reasons I like Ernie's momentum model. But mainly I like buying stock in companies whose sales and net earnings are picking up, but whose stock price for one reason or another hasn't yet sufficiently rewarded that activity.
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