Stock Market Investing: Value, not Price

cscoIBM may be underpriced at $120; while Ford might be overpriced at $7.  I once bought Cisco Systems for around $20 thinking that since it had fallen from $80 it was cheap.  Guess what, it fell further.  In fact, here we are almost nine years later and CSCO is just under $23.

Learn from my mistake, pay attention to fundamentals…P/E, Div Yield, growth rate, free cash flow, etc.  Your research should give you a number that the stock is worth to you.  Prices rise and fall.  Sometimes without a good reason.  Don’t get fooled by a “sale”.  Only buy or sell if the price matches your investment goals.  Not because a stock looks cheap.

I’m planning to share more of my lessons learned in upcoming posts.  Feel free to add your own stories in the comments below.

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