The Investor Entry #3: January 10, 2023
We do not normally wonder what to do when stocks are up. We always ask this question when stocks are down. To me it is totally the opposite.
Today I am investing long term, and I am in a buying mode, so normally I would be looking for opportunities to buy stocks at a good price.
A good price might be clearer to a trader than an investor.
What Is A Good Price
When shopping for any product or service you normally try to find the best or more you can get with the many that you are paying. Many people shop for cheaper prices, others shop for value for money; whatever value means to them.
This means that every shopper has certain factors when considering buying something. Furthermore, those factors might be prioritized or classified.
When we say classified we mean that there might be certain factors that a shopper cannot do without. Other factors can be under good to have but not essential…etc.
The stock market is like any other market in that respect. There are different shoppers with different needs, factors, priorities and classifications.
Currently I am a long term investor and I try to follow the steps of value investment. I try to look for stocks in two general categories.
Stocks I Look For
When buying Stocks, I look for two different categories; the first category is stocks in companies with solid fundamentals that are traded at a price that has a potential to increase in the long run.
The second category of stocks that I look for is within an industry that I think will grow significantly in the future. I am currently putting money in the Drone manufacturing industry where many companies are still starting up and hard to analyze.
Some of the companies that fall within the second category might fall within what is called penny stocks. I try to throw in small amounts that buy a lot of stocks with the hope that the industry picks those companies up and drive their stocks higher.
In both cases, including the industry specific penny stocks, I try to find what could be considered a fair or cheap price that gives room for considerable growth in the future.
I don’t buy into popular stocks or hyped ones if their price is above the stock price that came out of my analysis. I do this even if I turned out to be wrong and their prices got higher. I believe that eventually their prices will come back to my levels.
Overvalued Growth Companies
Everybody knows that the current stock market is highly overvalued. Even after the Pandemic, it is still overvalued. Still, there are some very well-known advisory sites that promote what they call Growth Companies regardless of their current price.
I have read some articles from such sites that they advise to buy at any price point in what is called a Growth stock since such stocks will grow in any case. They also add that the total market will grow as well from today’s point. Well, I do not want to discredit them completely.
I will just say that what they are advising does not make sense to me, and I am sure that it make sense to the believers of Growth Investment strategy. It is a method nonetheless, but one that I cannot agree with, but at the same time I cannot say that it is wrong.
What To Do When The Market Is Down?
For many this seems to be a very difficult question. For me, at least for the time being, the answer is very easy. This answer is very easy to many. Actually long term investors wait for those moments when the market is down.
The answer is Buy, Buy Buy, and keep on buying. This is when the market is down. I agree that the market is down, or at least many companies, including ones that were considered rising stars and still rising, their stock prices went considerably down. Take for example Tesla.
For me the market is not down enough, even worse, today and after 10 days in January 2023, the market has been up. I cannot find good opportunities. So when the market is up, I keep searching in the piles of companies hoping to find a good company with a good price.
Conclusion
Today I am in a buying mode in the stock market. Therefore, when the market goes up, I find it very hard to find good companies to invest in.
I am trying to clear my schedule as fast as possible so as to be able to start to learn trading. This way I will be able to benefit from the dull times of rising markets and spend time trading. I might not trade in the stock market though, I might trade in the Forex market. Who knows, this is still in the future.
The Investor
Tuesday 10 January 2023
About The Author
I started looking into individual stocks in January 2022. I created this diary initially for myself to track my investing progress, and second as a place that I can share my ideas publicly hoping that others will share their ideas and learn from each other, and lastly as an online business where some links that I share are affiliate links, and if anybody bought anything by clicking those links I will get a commission based on that successful sale, which of course will not affect the price that you are buying the product or service at.
For a more detailed information on my affiliate disclosure please refer to the Full Affiliate Disclosure page, and if you are interested in building your own online business you can check this post here.
Furthermore, this site is in no way or form is giving any financial or investing advice, nor it is encouraging or discouraging people to buy or sell any financial instrument. This is a personal diary in which I track my own progress and share for informational and entertainment purposes.