#asklbs02: How do you spot when is a good time to buy?

From now until 29-Jan, you could access https://app.sli.do/event/lxmezhxh and ask questions anonymously. 

Question: How do you spot when is a good time to buy?

There are a few schools of thought. 

The CANSLIM camp would feel that, if a stock fits all seven criteria, and if the chart follows one of their many recognized patterns (the most famous of all resembles a cup’s handle), one should buy the stock.

Their idea is that the timing has to be right, and any sell down of 8% means they have to go into cash as they made a mistake. 

The value guys would focus on the price to value gap and ignored the preceding movements. When there is a sufficient discount of price from value, hit the buy button.

The more nuanced parties would argue for a known catalyst before getting involved.

Obviously, I lean towards the value side of things, and would add that the best timing clue offered, legally, is the presence of heavy insider buying. To clarify matters, we are looking at purchase of stock using their own money, not the mandated company buy backs. 

The latter could just be an exercise to purchase enough stock for the treasury, so as to offer to them as stock options to management as incentives. As such, they are less reliable as indicators of value, more probabilistically a sign of whether management pays attention to value.

In other words, there are some merit in what the guys at Spiking are doing when they track insider buys.

I pay a lot of attention to insider buys. If I already have the stock, I usually wait for 10-15% from my last buy price before buying more.

I was extremely fortunate, timing wise, with Cross-Harbour (thanks to a group of friends who are smarter than myself.. it was their idea). I noticed that the owner was buying a huge amount of stock towards the end of 2019, and I bought the stock around August 2020.

Timing is mostly luck.

P.S.: On the less serious side, I do follow a couple of "investors" whom I revered as reverse indicators. Whenever they accumulate a certain stock in my portfolio, I do get very very worried.... and when they start selling, I do have the temptation to buy... haha