Re Mr G. Barnes14 Jan 2018 10:46
Thank you. for your input. the more inputs given the more information we all have. The one thing I failed to allow for was debt.
Realy the thing we should look at for all companies is: the value of the company per share, Taking what they own then deducting what they owe. This is not always easy to find or calculate.then followed by looking at their current trading, followed by their estimated EPS for this and the next year. all of which gives a better picture.
Lets face it for people like myself trying to value what a company is worth if everything was sold is far from easy. The so called proffesionals continue to get it wrong. How often de we see Brokers advice coming in with one saying buy and another saying sell.
We must allow for people taking note of brokers statements and any current news. Bad news often gets an extreme drop in the share price while good news does not get the same % increase. So we buy when a share is oversold and has settled for about 2/3 days and is cheap and sell, or partly sell your holdings when it is at its high and the p/e is 12 or more as a guide but not set in stone. Companies with a very high P/E only have to have a snifter of bad news for a massive price drop, this is when we then look at buying in to it.
As an example of what we missed. Carillion we should have bought at 15p and sold at 22p ish.before further bad news returned it to 14p however we were otherwise occupied at the initial fall and missed out. now probably best to leave alone. We often manage a 40 -50 % profit. on companies like this. But we have bought too soon occassionally.
Mothercare we have gone in to at 43p as our latest adventure. Let the big boys soldier on and we take the scraps that fall from the table. Dont be to greedy.
Buy in to Sectors when they are low. gives a good return
One big thing is sell if you have made a mistake. your first loss is your lowest loss i was told this many years ago.
HOWEVER ANYTHING THAT WORKS FOR ANY INDIVIDUAL IS THE RIGHT WAY FOR THEM.
Remember to always limit your losses, that is the most important thing.