This is a follow up to the previous post. It is here I will try to reconcile some tensions.
1) Market timing is possible.
If u are waiting for value to emerge, you are timing the market. When value is low, u buy, and over-valued u sell.
2) But The over-valued get higher and the under-valued get lower.
This type of market timing is impossible. U can’t really exit near top or bottom.
3) Value is not static
Waren says buy great company at fair value. 20 + PE is a steal if a company can grow strongly over a few years
In fact, if u can company prospect like Warren, I would say PE 30 is a good price, because just 2-3 years of good double digit growth, PE will be low.
4) Market Valuation of company is not static
The actual same company with …Read the full article →