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Anonymous

31 Dec 2020

Stocks

Do you find the intrinsic value of a stock before buying and when you DCA?

Do you calculate the intrinsic value of a stock before buying and when you DCA?

Discussion (2)

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DCA is a passive approach which works on 1 assumption (the underlying asset always goes up)

The overall market index may go up but it’s a common misconception that an individual stock will always go up.

Look at stocks that were previously huge companies with wide moats. Nokia, General Electric, intel.

With individual stocks there is always risk that the businesses may lose it’s competitive advantage and never recover. DCA is thus a dangerous method for individual stock picks. If you think it is a good business and it’s selling at a reasonable price, why not buy bigger? We can’t catch the best prices anyway, just buy at a reasonable price and hold for the long term

No. Is always most of the time overvalued. Just dont buy at resistance.
If at intrinsic value just double or triple down, normally means there is a correction

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