4 ms·

This is the way to do it, IMO. - Do a proper valuation of the company - If the price is right, start Dollar Cost Averaging into a position dur

This is the way to do it, IMO. - Do a proper valuation of the company - If the price is right, start Dollar Cost Averaging into a position during a downturn No one can perfectly time the market. However, we certainly can approximate the proper value of solid companies, and we generally can tell when sentiments and market conditions are biasing low. (Disclaimer: I am not a financial advisor. Do your own research, etc.)

maest 4y ago
> If the price is right That is doing a lot of the work. In particular, you need to be able to predict what interest rates will be doing in the future.
luckylion 4y ago
The problem is the "proper valuation" though, isn't it? Especially for something like CloudFlare. I'm a customer, I understand their product and what they're offering, I like their products, I think it works pretty well, I see them having a lots of sites on their CDN, I think they're providing value. I don't have the faintest idea what their suites of products are worth to the average website owner, and how many of those average users they have, or how much it would be worth to large enterprises etc. And even if I did, I wouldn't have any idea of what that should translate to in share prices. So in the end all I can reasonably do is very basic stuff like looking at revenue vs share price, and maybe at how competitors are valued. Are you going to have any success with that kind of analysis that's barely scratching the surface?
time_to_smile 4y ago
Literally all of finance boils down to trying to correctly price assets and financial instruments in regards to future performance. Anyone who can consistently and correctly price any asset at any point in the future will be incredibly wealthy. The best we can do mathematically is to say that at small time scales, right now, things are priced what the market believes they should be price and that's as "correct" as possible. Everything else is speculation.

maest 4y ago

> If the price is right That is doing a lot of the work. In particular, you need to be able to predict what interest rates will be doing in the future.

luckylion 4y ago

The problem is the "proper valuation" though, isn't it? Especially for something like CloudFlare. I'm a customer, I understand their product and what they're offering, I like their products, I think it works pretty well, I see them having a lots of sites on their CDN, I think they're providing value. I don't have the faintest idea what their suites of products are worth to the average website owner, and how many of those average users they have, or how much it would be worth to large enterprises etc. And even if I did, I wouldn't have any idea of what that should translate to in share prices. So in the end all I can reasonably do is very basic stuff like looking at revenue vs share price, and maybe at how competitors are valued. Are you going to have any success with that kind of analysis that's barely scratching the surface?

time_to_smile 4y ago

Literally all of finance boils down to trying to correctly price assets and financial instruments in regards to future performance. Anyone who can consistently and correctly price any asset at any point in the future will be incredibly wealthy. The best we can do mathematically is to say that at small time scales, right now, things are priced what the market believes they should be price and that's as "correct" as possible. Everything else is speculation.