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Motley Fool Global Gains / GGM: Special Event


Subject:  Re: Buy or wait Date:  6/5/2007  5:57 PM
Author:  eatnbybears Number:  81 of 111

I joined MF because of the insecurity I found at the end of the 90's and then "the bubble"

Looking back at the dotcom days and smaller peak and valley pullbacks since then (including the recent China adjustment)it is obvious the main culprit in stock ownership ..... P/E ratio.

Man, we were running up stock prices and convincing ourselves that P/E ratios were like speedometers telling us how soon we could be rich.

Little did we know (or accept) at that time that P/E ratios were really Tachometers predicting where the "Red line" was on those paper tiger's engines. Even the recent China pull back was similar.

If what you buy is a solid company with good financial's and a growing product offering, in my opinion you cant lose long term.

How do I define losing? You must have a benchmark. For me its that today a 1 year CD pays 4.83%. If I can get more than that from my portfolio, I win.

Am I happy with 4.83%? No, I do prefer 20+ percent overall and love that feel when you grab that "perfect stock" that shoots up and up.

IMO though, if you cant set a baseline of "when is a loss a loss", you will run off chasing rainbows and moving trains rather than firm foundations.

Until someone can figure a sure fire way to predict a stocks peak high value before the fat lady sings, I am more than comfortable to buy into company's who's track record and potential is in it's financial's rather than today's hype and get consistent returns rather than trying to jump from fast ride to fast ride.

MF has allowed me the luxury of focusing on a few company's that fit the bill and a couple "fast rides" to add a touch of excitement.

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