12 Warning Signs of Hyperinflation

Will you agree that a market top (i.e. the point near which the price peaks) is generally marked by the equity or speculation being over-valued, and that likewise a market bottom (i.e. the point near which the price is below average) is generally marked by the equity or speculation being under-valued? Obviously, in a snapshot at any given time, a top or bottom is meaningless, but taken in the context of an expanded view of an investment over time, tops and bottoms of the market are absolutely applicable to the value of an investment. Discounts to fair values only occur during specific moments in time during which they remain unrecognized by the masses (sometimes due to ignorance, sometimes due to fear). Then they are bid up to fair value and ultimately beyond fair value. This is how all market cycles work and is the basis of bottoms and tops. I don't know how anyone can reasonably dissociate valuation from price over time. The very basis of an "under-valued" or "fair-valued" determination is where the price is going or how the underlying business will do in the FUTURE.

I didn't say it, you did. I'm not trying to insult you, but merely recognizing the limitations you yourself admitted to. I've never once claimed to be smarter, better, or more educated than anyone. I simply lay out my facts and reasoning and attempt to defend myself against the onslaught of ad hominem attacks from those who can't seem to hold their own in a conversation. I don't care about your credibility, I care about your argument. So if your argument is that you're not a good value investor, therefore nobody is, well that rings hollow.

 

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This is not value investing. Value investors do not make decisions based on price action. A stock can be 50% lower than the old high, and be wildly overvalued. Another stock can be at at 52 week high and be a screaming bargain. The other little detail is that nobody knows whether the market is at a top or bottom until a reasonably long time after it occurs. When you wake up any given Monday morning, you aren't likely to say, "the top is today." In February, 1930 the market looked like a real bargain. Stock prices were back to levels of several years earlier and the market started rising nearly every day. But the investors did not know that what looked like a bottom to them was not even midway to the bottom, and stocks lost another two-thirds of their price over the next two years. There are many many more examples.

Value investing is about measuring what a company is worth on a per share basis, then comparing it to the price. Price is not an input into the value calculation.

 

I was trying to be kind professing my own inability to predict tops in markets. I thought you would take the hint that it is unknowable. If you really think you can predict market peaks with accuracy, then you are the only person in the world who can. Good luck with that. Btw, no, your view of company valuation is static. You are treating a company value as unmovable, like an ounce of silver. A company is a constantly moving enterprise, and its valuation is constantly moving as well. If you are comparing the value of any equity to the same valuation assessment of a commodity then you sir are the one who is not properly valueing assets. I have tried to be nice, and you continue to insult me and profess your superiority while repeatedly refusing to even discuss your own background or education. No sense trying to discuss anything with an abusive, self professed investing god, you already know it all.