SSSHHHH... It's a Secret
What I am about to say is quite obvious under most normal circumstances. "The price you pay determines your future results." Unfortunately in the stock market, normal circumstances is only observed in retrospect. Now that may be fine for most stock market commentators and journalists since they have no skin in the game. Most publishers of financial commentary don't have to operate in real time. I don't have that luxury. I don't have the luxury of pointing out all the warts on the frog. You see in my world, in real-time stock market decision making, many of those frogs turn out to be princes! The frog-to-prince transformation can only be profited from in real-time, not in, unlimited, journalist-time.
One simple way to attempt to avoid getting too off track, is to monitor a stock's trading history in relation to its earnings and sales. I'm not going to get into a debate about the virtues of owing low-multiple stocks or condemn the sins of owning high-multiple stocks, but to be successful as a stock market operator you need to at least be aware of what you are paying. Having a disciple that attempts to understand what you are getting for the price you are paying will certainly force you to miss opportunities. A disciplined approach to security selection may also save you from financial ruin.
*I, nor does Franklin Trend Management, own any shares of CSCO. In fact, I haven't owned shares of CSCO, in well, over 17 years. I am just using this graph as an example of how not to do it!
Happy Returns,
P. Franklin, Jr
May 5th, 2017
All opinions and estimates included in this communication constitute the author’s judgment as of the date of this report and are subject to change without notice. This communication is for informational purposes only. It is not intended as an offer or solicitation with respect to the purchase or sale of any security. This information is subject to change at any time, based on market and other conditions. Any forward looking statements are just opinions – not a statement of fact.
Investing may involve risk including loss of principal. Investment returns, particularly over shorter time periods are highly dependent on trends in the various investment markets. Past performance does not guarantee future results.
