Stocks price is the least important indicator, it's best to focus on companies you know and understand, it requires rational and discipline. It's much like a marriage, which requires emotional restraint to be successful and long term mentality.
A marriage that lasts 1, 3, 5 years isn't successful at fruiting great results, but thinking with 20+ year horizon is enough to withstand any of the worst market recessions and be profitable. Too often we forget to ignore the price, when there's a lot more important indicators like P/E ratio and more so the E.
A few months ago, Costco, at 40 P/E seemed like a good buy. I feel like an idiot looking back now, but its being able to recognize this error which am happy to know. Now, a company like Google who's P/E ratio at 19.77 looks like a much better buy, after looking at Google's historical yearly P/E ratio. This is a good buy, not Costco which I would now consider more around 25 P/E.
You should know the company you buy from a consumer perspective, Google, if I were to explain to a 5 year old would be the “world's greatest librarian”, providing the highest quality information to any question in article or video format with the touch of a few buttons.
Its so important to not forget the art of stock picking, while mutual funds are great you're doing yourself a disfavor by not picking individual stocks which surely can provide greater gains than the average. It takes discipline, long term mentality, understanding the company, high consistent earnings, and buying at good valuations without reacting to price change as that's the least important variable when assessing to buy or sell a company.
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