Musings On Markets
230. Two months later, both stocks have taken serious hits on the market, down almost 25% apiece, and one of my brief sales has been covered and the other continues to be looking profitable. It will always be nice to have happy endings to my investment tales, but rather than use this as vindication of my timing or valuation skills, I will argue that I got lucky in conditions of timing just.
That said, given how much these shares have dropped during the last two months, it is an chance to not just revisit my valuations and investment judgments, but also to attract some general lessons about intrinsic valuation and prices. 1950 (Amazon). I used to be also open up about the actual fact that my valuations shown my stories for the firms, and that my assumptions were open up for argument. 1412 at Amazon, not planning on either to happen in the close to term. 1420 on November 20), before rebounding.
230, and the stock increased to that known level, I would find a way to justify not doing it. Intrinsic value changes over time: Among some value investors, there’s a misplaced belief that intrinsic value is a timeless constant, and that it is the market that is at the mercy of wild swings, driven by changes in mood and momentum.
That is not true, since not only do the determinants of value (cash flows, development and risk) change as time passes, but so does the price of risk …