Here, the trick is not to lose the potential tenbagger. On the other hand, if the company falls apart and the earnings shrink, then so will the p/e multiple that investors have bid up on the stock. This is a very expensive double whammy for the loyal shareholders.Unlike the cyclical where the p/e ratio gets smaller near the end, in a growth company the p/e usually gets bigger, and it may reach absurd and illogical dimensions.
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These are some lessons that peter lynch thought us in one up on wall street
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Similar ideas to WHEN TO SELL A FAST GROWER
Unfortunately, there's no P/E ratio set in stone that makes a stock a buy if it's below, or a sell if it's above.
Often value investors and growth investors will look for different things in a P/E ratio.
These are the stocks that I frequently replace with others in the category. There’s no point expecting a quick tenbagger in a stalwart, and if the stock price gets above the earnings line, or if the p/e strays too far beyond the normal range, you might think about selling it and waiting to buy it...
The best time to sell a turnaround is after it’s turned around. All the troubles are over and everybody knows it. The company has become the old self it was before it fell apart: growth company or cyclical or whatever. The shareholders aren’t embarrassed to own it again. If the turnaround has bee...
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