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QUOTE(Pohziliang96 @ Jan 8 2021, 12:29 PM)
Is public consensus important?
When you buy a stock that is very unpopular and it doesn't go up for a long time, so what will you do?
How to predict a company's profitability? We all knew that the annual reports we studied are based on past performance, so how do we know that the company's profit will improve again?
Can we believe the prospect written in the annual report?
When will the stock prices rise? After announcing a new high record profit?
I'm not adept at calculating intrinsic values, so I buy when price is quite cheap, like Genting & PBBank in Sep 2020. It worked for me this way. Not sure about others who used discounted cashflow analysis, or other earnings forecast calculation.
1. Public consensus is important to roughly know the market emotions. But if one buys & hold 5 years, it isn't important.
2. Why did I buy an unpopular stock in first place? What is so attractive about it? Can its share price increase within the expected timeline? If the company's story is intact, why sell if it hasn't achieved its potential yet? Unless you need to switch to better counters or urgently need money or realise it's a mistake, why sell?
3. To predict company profitability, one must have a lot of info, whether insider info, or sifu tips, forum discussion, or own stock research. To illustrate, glove stocks share prices rocketed from June-Aug bcause big funds know that ASPs have increased substantially, & knowing that other companies financial performance would suffer during MCO, they shifted their funds from Covid affected stocks to Covid beneficiary stocks.
4. On annual reports' reliability, it really depends on the company's integrity. Some companies repeat every year in their AR that they'll do their best to improve, but nothing done.
5. General rule is when companies announce new record high profits, share price will hit ATH soon. But sometimes there are other factors which affects the share price. Glove stocks which announced new record high profits, the stock prices plunged after that, along with ESG concerns.