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by switch33 4132 days ago
While valuation metrics are one aspect of trading and I do think that most beginners do overlook the basics of them that should be covered before almost any investing.

For real returns it may not always be best to play it by all the metrics. It is important to note that the market itself fluctuates a lot on sentiment and sometimes a good valued holding can turn sour fast even with good metrics but bad timing.

Some companies will over invest in dividends which in turn means they are not investing in growth as much as they could be for instance.

Some companies will try to grow revenues but by focusing too much on the quick buck of short term and will not be as good for longer term with steep competition.

It is also important to note that the market reports of portfolio manager purchases like berkshire hathways tend to report just the stock name and not the amount they hold of that stock. As well as the fact that you do not see how long that portfolio manager generally holds the stock without constantly crawling that site daily. The portfolios holdings are only updated at the end of the day. So you can see recent purchases but you cannot see when they sell them until the day after.

1 comments

You have been doing this for 6 months, you could throw a dart in this market and make money. Long-term though, you will be humbled if you try and "time" the market. I was a trader for three years, and now I only invest. When investing, value is all that matters. Not just metrics, but value. Ask yourself, how much would this company be sold for in a buy out. Typically, you should try and hold a stock for at least a year, unless something fundamentally changes, as the tax benefits for long term cg is much better.
Thank you for describing such a clear learning path!