Someone recently asked me this: With the stock market seeming to break new records on a regular basis, why isn’t it wise to sell a stock that has become slightly overvalued?
There are two reasons why it is not intelligent to sell of a company that happens to be of good quality. The first is that you do not know when the stock the stock will go up or down. That’s all fine and well, you might say, but that doesn’t answer the question: What’s the point of holding something that is currently trading at a share price worth more than the underlying reality?
And the answer to that is this: Some companies are relentless at growing their profits, intrinsic value, and dividends on a near-annual basis.
Let’s use Wal-Mart as an example. I’m currently reviewing seventeen years worth of data for the retail giant, and it looks to me … Read the rest of this article!