Trust Good Companies or Good Prices?

Tiger_comments
10-01

If you invested $5 in $Walt Disney(DIS)$ back in 2015 today you have $5.

If you had invested $5 in the Shanghai Composite Index $SSE Comp(000001.SH)$ in 2014, today you would have finally broken even with your $5. But recently, those who bought Chinese stocks have surely made a lot of money.

Product, Founder, & Velocity VCsProduct, Founder, & Velocity VCs

Do you think stock trading should be about trusting your judgment of a company's trends or relying on cheap prices?

Before meeting Charlie Munger, Buffett's investment style leaned more towards finding cheap stocks, without paying much attention to a company's long-term growth potential.

However, in his later years, Munger's influence gradually led Buffett to focus on "buying good companies and holding them for the long term," emphasizing a company's competitive advantage and the quality of its management team.

$Tiger Brokers(TIGR)$

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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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  • Success88
    ·10-01
    TOP
    I got the same thought with Warrann Buffett. Buy company at fair price and when they even lower then their fair price is even better for you to invest. Just check on their company performance and their PEG ratio. Can go read back my PEG ratio calculations article @Tiger_comments @Tiger_SG @Tiger Club @TigerEvents @MHh @HelenJanet @koolgal @SR050321 Join in to chat your thoughts
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  • highhand
    ·10-01
    need both good companies and good price. if you buy good companies at lousy prices, your gains are capped. if you buy lousy companies at "good" low prices, this price might go down even more.
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  • Cadi Poon
    ·10-01
    TOP
    如果您投資5美元$華特迪士尼(DIS)$回到2015年，今天你有5美元。

    如果你在上證綜合指數上投資了5美元$上證綜指(000001.SH)$2014年，今天你終於可以用你的5美元收支平衡了。但最近，那些買中國股票的人肯定賺了很多錢。

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  • TimothyX
    ·10-01
    在遇到查理·芒格之前，巴菲特的投資風格更傾向於尋找便宜的股票，而不太關注一家公司的長期增長潛力。

    然而，到了晚年，芒格的影響力逐漸讓巴菲特專注於“買入好公司並長期持有”，強調一家公司的競爭優勢和管理團隊的素質。

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  • MilkTeaBro
    ·10-01
    It is crucial to trust my judgement and take full ownership of my responsibility. Embrace my understanding of investment strategy and have faith in my actions as they are rooted in logic rather than luck.

    Most US technology stocks are too   hot to handle. I don't envy others' profits on them because I couldn't understand their growth rate VS P/E.

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  • WanEH
    ·10-01
    it's easy to buy a company share at cheap price but it's hard to wait the price boom. unless u have the capital and power like buffet to boost up the price
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  • MasterStonker
    ·10-01
    As long you make money all goes
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  • Universe宇宙
    ·10-01
    TOP
    @TigerGPT first day for october 2024 and stock go down, bad sign, right buddy? grab more information from the Internet if needed.
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    • TigerGPT: 

      I apologize, but I couldn't find any news articles specifically related to your query on stock trading and investment strategy for the first day of October 2024. However, I can provide you with some general insights.

      When it comes to stock trading, there are different approaches and strategies. Some investors focus on the fundamentals of a company and trust their judgment of a company's trends, while others emphasize finding stocks at cheap prices.

      Warren Buffett, one of the most successful investors of all time, initially leaned towards finding cheap stocks without paying much attention to a company's long-term growth potential. However, as he was influenced by Charlie Munger, his investment style gradually shifted towards buying good companies and holding them for the long term. Buffett and Munger emphasized a company's competitive advantage and the quality of its management team.

      Ultimately, the approach to stock trading depends on your investment goals, risk tolerance, and time horizon. It's important to conduct thorough research, analyze the fundamentals of companies, and consider market trends before making investment decisions.

      Again, I apologize for not finding any specific news articles related to your query. If you have any other questions or need further information, feel free to ask.

      10-01
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  • MHh
    ·10-01
    TOP
    Both are important. Best to buy at cheap prices to have maximal risk benefit ratio and best chance of making a profit. But trends are also informative. Don’t want to catch falling knife but want to be early in the upward momentum. If truly trading, then need to exit at the right time. Of course, there are people who are really disciplined in buying with every fixed percentage drop in stock price and then selling in tranches at fixed percentage of profit.
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  • ECLC
    ·10-02
    Like more on "buying good companies at fair prices and holding them for the long term"; especially with good consistent dividends. Cheap and good companies are hard to come by; need quite a bit of research and patience.
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  • Shyon
    ·10-02
    TOP
    I tend to place greater emphasis on technical trades and the overall trends of a company rather than simply relying on cheap prices. Understanding a company's fundamentals, market positioning, and growth trajectory is crucial for making informed investment decisions. Technical analysis helps me identify patterns and potential price movements, providing valuable insights into when to enter or exit a position.

    Relying solely on cheap prices can be misleading & risky. While a low price may seem attractive, it often raises questions about the underlying reasons for that price drop. There could be significant issues affecting the company, like declining sales, increased competition, or management challenges. In many cases, what appears to be a bargain might reflect deeper problem that could hinder future performance.

    Ultimately, I believe that a well-rounded analysis, combining both technical and fundamental factors, leads to more successful trading strategies.
    @Tiger_comments @TigerGPT

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    • TigerGPT: 

      As an AI financial analyst, I can provide you with insights on the importance of considering both company fundamentals and stock prices in your investment strategy.

      While technical analysis and overall trends can help identify potential price movements, understanding a company's fundamentals is crucial for making informed investment decisions. Factors such as market positioning, growth trajectory, and competitive advantage can significantly impact a company's long-term performance.

      Relying solely on cheap prices can be misleading and risky. A low price may appear attractive, but it's essential to investigate the underlying reasons for the price drop. Factors such as declining sales, increased competition, or management challenges could be affecting the company's prospects. Investing in a company solely based on cheap prices without considering its fundamentals may lead to poor investment outcomes.

      Warren Buffett's transition from a focus on cheap stocks to prioritizing good companies with long-term growth potential, influenced by Charlie Munger, highlights the significance of considering company fundamentals. Buffett now emphasizes investing in companies with a competitive advantage and strong management teams.

      In summary, a well-rounded analysis that combines both technical analysis and fundamental factors can lead to more successful trading strategies. By considering a company's fundamentals, market positioning, and growth potential, you can make informed investment decisions and potentially achieve better long-term returns.

      Please note that the information provided is for reference purposes only and does not constitute investment advice. It's essential to conduct thorough research and analysis before making any investment decisions.

      10-02
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  • icycrystal
    ·10-02
    both tend to go hand in hand. if the company is in good hands, then it's worth investing with the right price.

    @Universe宇宙 @Aqa @TigerGPT @SPACE ROCKET @GoodLife99 @rL @HelenJanet @koolgal @LMSunshine @Shyon

    Do you think stock trading should be about trusting your judgment of a company's trends or relying on cheap prices?

    SHARE YOUR THOUGHTS IN OUR TOPIC!

    LEAVE YOUR COMMENTS & POST TO WIN TIGER COINS~

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  • Aqa
    ·10-03
    It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.Good companies will eventually bring good prices. Buy good companies and hold them for long term, especially companies with competitive advantage and good management team. Always remember to do due care and diligence before each trade. Thanks @Tiger_comments @icycrystal
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  • Mrzorro
    ·10-03
    I guess I prefer good companies than good prices [LOL]. This is part of the lesson that I learned through my investment journey. I am not saying good companies won't fall, but the chances of losing money is lesser compare to low price lousy company stock. I really believe that strong foundations and good management companies will bring more profit compared to the others. I had brought share on lower price, but the stock price kept dropping non-stop, some got takeover and delist, some company even broke. That's why my profolio is deep red until now [Facepalm] Stock prices up and down, even low price can be lower, good companies eventually will brings profit in long-term investment.
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  • nomadic_m
    ·10-04
    Stock trading should balance fundamental analysis (trend judgment) and technical analysis (price consideration). Fundamental analysis involves understanding a company's financials, products, management, and industry to evaluate growth potential. Technical analysis considers valuation metrics and price movements to identify entry and exit points.

    A successful approach combines long-term perspective, risk management, and continuous learning. Avoid relying solely on cheap prices, as they can indicate value traps. Verify your judgment with data and stay adaptable to changing market conditions. Balance trend judgment, price consideration, and risk management to make informed investment decisions. This balanced approach helps maximize returns while minimizing losses.

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  • SPACE ROCKET
    ·10-04
    Both are equally important
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