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There's more to great investing than finding a low price...

Recs

5

December 07, 2009 – Comments (1) | RELATED TICKERS: ISRG

I'm not a growth investor by any means, so it's difficult for me to ever concede that paying a high price for a stock is a good idea. However, as I detailed in a recent article on Fool.com, valuation can often lead you astray -- or at the very least have you ignoring some of the best investment opportunities.

While Intuitive Surgical (Nasdaq: ISRG) and it's sky high valuation over the preceding years may never be the kind of stock that I go after, it's good to remember that you can pay up on valuation (in P/E terms I'd consider that really anything north of 15), and still be very handsomely rewarded. At the same time, dumpster diving for the lowest valuations can leave you with a portfolio stuffed with stocks that really deserved their stinky spot in that dumpster.

Matt

1 Comments – Post Your Own

#1) On December 07, 2009 at 7:17 PM, Varchild2008 (83.61) wrote:

+1 rec.....  Good advice everyone should pay attention to.

A low price SHOULD mean something....  Bad Debt levels to cash ratio.... series of poor earnings..... recent downgrade by a credit agency or two like Standard and Poors or Fitch....

Lawsuits.... Recalls.....etc..etc.. Lots of reasons for why a share price sits low and trades low in valuation for days...weeks....months....even years...

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