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Buy low and sell high.
Thats the cardinal rule of investing.
So, how do you know when the time is right tosell an underperforming stock?
Heres what it’s crucial that you know.
So, Buffett watches carefully and drops overvalued stocks.
But if the price is way higher than the intrinsic value, then its better to sell.
This makes a lot of sense as long as you’re able to quantify a stocks intrinsic value.
The issue, of course, is determining that value.
Overvalued stocks are challenged to perform at the level that is indicated by their stock price.
You are saying that what you are buying is worth the price you are willing to pay for it.
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