You should think of buying a stock as buying a business... otherwise you aren't making an investment, you are merely speculating. This means that you must base a purchase based on the absolute numbers, just as someone buying a small business would. If the price of a stock was trading at 30 times earnings in the stock market, but it was relatively cheap, why would you buy it. That is no different from buying a private business for $5 Million, while it is only earning $133,333 a year?!? This is a terrible investment decision, but many people will go out and make purcahses just like this every single day. I'll let them go do that and wait for the prices come back to my level. I like using the term time arbatrage to describe my investing style. I don't really care if other people come to use this type of value method in the future, but will profit greatly as long as people make irrational investing decisions based on gaming the market.
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