A question many ask is when to buy? What indicators should we use to buy? Is TA or FA the most likely method to yield the best results? Should we try to predict the business cycle and time the market that way? Is buying a stock just akin to spinning the roulette wheel or throwing darts at a dartboard while blindfolded?
I believe that the assessment must be made based on the individual stock. Go back to just prior to the GFC and you will see very few were predicting a recession, and those that were probably had a bearish bias in the economy to begin with. TA is a matter of probabilities and fundamentals definitely can change either permanently or temporarily. So how do we know when to buy? My investment approach has always relied on finding special cases, businesses that are undergoing significant change due to a temporary negative shock that has created negative sentiment. I attempt to find companies that are selling cheaply due to a temporary shock with a management team that is capable of turning things around and therefore creating long term growth. These are the companies which are absolutely trashed, the companies which are hated and make you look like a fools for purchasing. These are the companies that have been oversold for whatever reason. Unfortunately A2M has not been like other stocks I've purchased, such as TWE which I acquired at around the same time at the very lows (now up around 30%). But it is a company evidently undergoing changes, perhaps not fast enough for some but I believe the managements changes will lay the groundwork for future structural changes jn how A2M conducts business. Perhaps, out of Covid, A2M will rise up as a stronger company that is no longer subject to the same supply chain risks. A diversified company with a balance of sales revenue generated out of Asian and US markets. Or the current changes we are currently observing in management could freeze and the downtrend could continue.
Here are three excellent pages from the "When to Buy" section of Common Stocks and Uncommon Profits which I believe is quite applicable to A2M. I feel this is an excellent approach but would be keen to understand what drives others to buy a stock, such as a beat up stock like A2M?
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