When a stock you think is value takes a plunge, what should your thought process be when evaluating your entry point.
Everyone wants to own that stock with that great business model when its beaten down. But how low is low?
We talk about having a game plan when waiting for a correction recently. When it comes to an individual stock or a specific market segment, the game plan is a bit different.
Evaluating the stock’s valuation
As with the previous article, it goes back to your fundamental valuation. Valuation encompass a lot of of the aspects we talked about in the article but in the case of this, there is a focus on
- What is the issue here and
- how it affects your previous valuation model
Your previous model will have evaluate the returns per unit risk. But what if this issue here is an unknown unknown?
The ...
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