I disagree with everything in this thread so far.Find quality companies with strong leadership, growth, cash-flows, balance sheet, etc. (different situations will call for different strengths). Then, when the price goes down, you will know it's a sale and not a falling knife (in the majority of cases anyway. We can't know the future). The goal is to buy more of a company at a better value. The price doesn't have to go down for this to happen either! One of the best ways to judge value versus price is comparing a company's Price to Earnings ratio against its own historical range, then factor in some things like growth potential and catalysts (after all, this multiple is driven by what the market wants to pay for the future earnings). When you have owned and follow a company for a while, this takes no time at all. You'll learn what you want to see. The market is smart over the long run but stupid at times in the short-term. These are the times where you want to be ready to buy more of great companies. A word of caution though. There are some companies where P/E isn't a good metric, but for most businesses it is. Once you understand what P/E really is, it can be a powerfully simple tool.Everything else is noise to distract you.
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