/biz/ - Business & Finance

>>11283782
>>11284292
>How to find fair value in the short term
Well, you want to find evidence/indicators that a company will grow and become more successful. That isn't always reliant on P/E too. Think of it like you're building a case for why "blank" company will increase in value. You need to collect evidence.

For example, Shopify ($SHOP) is reinvesting almost all their money back into their business. That's a good indicator that they're increasing their chances of future success, so we'll consider that a piece of evidence. Also, there really isn't another platform that competes with what they're doing and who they're targeting (you could say eBay and Craigslist, but SHOP is targeting people trying to build professional businesses), that another big plus so we'll consider that a second piece of evidence back the claim that it will succeed in the relatively near future.

Another could be Apple; making an electric car, evidence for success. No debt, evidence lends credibility to their future success. They'll more than likely get government grants to subsidize production of electric cars like Tesla, which means their profits will be increased for the electric cars when their made (this is entering the realm of speculation, but I think you get the point). Their market share of the Chinese market increased massively and you have no reason to doubt that it will increase again, another piece of evidence to point to their success.

You can't tell if the price of something is going to increase tomorrow if you buy today, but base upon the trajectory of the stock's trend line PAIRED with your evidence supporting its future success, you can come to the conclusion that there is a significant amount of reason for you to believe that it wont continue to go down very much if you bought in a day that it dipped 2%. You see what I mean?