Take a look at GameStop (GME) with Juergen (see letter below) for the last year. Assuming he's right about the 4Ms and the price being at or below MOS, how would you do trading it? The price dropped from $55 to $30, a loss of 46% if you bought and held. Instead, moving in and out, you would have done pretty okay. Not great, but a whole lot better than a 46% loss.
Now go play.
Hey Phil Town,
I read RULE #1 (actually I read it a couple of times already) and I am a pretty big believer in value investing and finding good companies with a beaten down shareprice.
So I came to look at GameStop (GME) and every piece of data (big 5s, 4 Ms etc.) coming from the company seems to be great, so that I was able to calculate an MOS price of $29. This is about the level the company is trading right now.
My problem however is, that I was looking at your 3 investing tools (MA, Slow Stochastik, MACD) in order to determine when to get in and out of the stock and just looking at the past charts of GME I discovered that following the tools would have actually lost me quiet some money and not made much, looking at the last year or so.
My question now: Should I ignore this past price action at all or is there any rule/advice of how to deal with situations where everything looks great on paper but the former price action combined with the 3 tools just doesn´t encourage you to pull the trigger on a stock?
Would greatly appreciate an answer
thanks
juergen
