One investment strategy is value investing. That is stocks and markets can get oversold and present opportunities for investors to get into quality companies for a low price. If you’re like most stock market investors you’ve heard dozens of opinions on how to invest in stocks but it really boils down to just a few things.
When that quantitative analysis identifies an apparently undervalued stock, the next consideration is ‘undervalued yes, but by how much?’ Because capital preservation is a key issue for value investors, they like stocks which provide a high Margin of Safety (MoS).
The hard part is to determine when a stock price has peaked out, and the best time to sell. By contrast, growth investing is concerned with finding which of today’s acorns will become tomorrow’s oaks. To a value investor, profits are made by investing in quality companies and not by trading.
Look for a …