December 29, 2017

No contradiction: good product - bad stock



When choosing a stock, you should not confuse the question of whether you like the product with the question of whether you should buy the stock, because they are two different things.

Of course it can be helpful to ask yourself whether you really like the company or the products, but ultimately your decision is about buying the stock and not the product, and here, the price of the stock also plays a role. Obermatt uses the value rank to determine the adequacy of the price of a share. The higher the value rank, the more favorable the share is compared to the size of the company.

To be able to distinguish between these subtleties, you must go through a learning process. Give yourself a couple of years. Regularly invest in smaller shares, look at what happens and learn from it. After a few years, you can differentiate between company value and products, and you will gradually feel more secure in your stock selection.

One thing you should keep in mind is that you will never achieve great returns with 15 to 30 minutes of share analysis. But that is not the decisive factor either. It’s more important that you receive the market return without the costs of asset management because this approach will usually leave you with bigger profits than if you have your money managed by someone else.



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