The above question can be framed differently as “Do I wait for next Downturn for Cheaper Valuation?”
When you are building your portfolio towards a long term sustainable wealth creation, there are multiple aspects that you need to focus on. As individual investors, it is very easy for us to get carried away with the individual stock wins. But when we look holistically, including wins and losses, then we realize who is the real winner. That’s why I say, for DIY investors, sustainability is key in portfolio management. Over the years, all the retail investors I have interacting with, most of us focus too much on stock picking, or stock selection. This is similar to what an employee does of executing blindly now knowing how it is related to overall company strategy.
The first lesson you should learn in investing is “not stock picking”, but how you can maintain and sustain what you have (safety of capital). By this I do not mean going with bonds, FDs, or government certificates. What I mean is invest in a way, where you believe there is relatively less risk of losing your capital. Continue reading rest of this article…
At regular time intervals, I like to discuss selective questions from readers of this blog. Many times, I discuss randomly with no particular theme. It is usually based on either intriguing questions or inquisitive questions or just that I like the question. Now that markets have zoomed higher relative to last year, most of these questions have slowly drifted towards buying price. I give priority to respond to all questions that come from regular readers of my blog. I make sure I give them my best response. Others, I may or may not, depending upon if I have time to get to them or whether they are good questions. 
In my stock analysis process, I attempt to estimate the fair value of a given stock. I estimate the fair value range (instead of a one fair value). This estimation should be interpreted as the price I am willing to pay based on my risk profile and my investing objective. My fair value estimation does not necessarily attempt to determine the fair value based on value investing principles.
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