Analyzing/valuing a Stock in an extreme downturn

[Anonymous]

#18440

Sean,

I’m curious if you continue to use your 3 basic methods to analyzing a stock in the midst of an extreme downturn like we are facing today. Fundamentals are obviously always important. Sentiment seems to always be relevant. However, logically thinking, technical data/charting seems like it would be a bit unreliable in times like these. Am i thinking on the right track? I feel like the short term negative effects of these unprecedented times would greatly skew the normal flow of a chart/market actions. Thoughts?

[Sean Hyman]

#18452

Yep, absolutely. And Warren Buffett does the same thing. All it means is that stocks can get to our prices/averaging down zones quicker. You’ll also notice that some of them are wider now than in the past, to account for some of that, speed of drop.

Nope. Long-term technicals have their value as well. Elliott Waves tell the sentiment of each phase of the market so that you know what the masses are thinking in each phase. If you haven’t seen that video yet, check it out in the Investing Basics section.

Also, using technicals/charting is not to find/hit bottoms. It’s to make more educated averaging down points/purchases than one otherwise would have done without them. AND…technicals only matter to us AFTER the fundamental screen has been done. So, it’s always fundamentals first.

[Anonymous]

#18454

Great! Thank you

[Sean Hyman]

#18459

You’re welcome. Our system doesn’t change. It’s not subject to market conditions. But there are times when I widen out the averaging points in downtrends or in times when I expect them (in the overall market).

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