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Remember “The Price to Sales ratio on that is crazy!”
This weekly chart shows how using Weinstein analysis you would have ignored people complaining about high P/E Ratio at A,B,C,D & E. Your only sell signal would have come at F.
The example shown: the P/E Ratio was 16 at the buy, 24 at point B, 20 at point C, 33 at point D & 28 at point E.
Easy comparison to many stocks in 2020/21 just use P/S ratio instead.
These ratios don’t matter until they do. They can expand and expand. There are so many times in 2020 when I sold a stock because it had gotten too expensive, I remember $ZM as an example where I sold it at about $170 only for it to go to $588 high!
By using the exact rules shown below I would have sold $ZM at about $360 on the way down at the latest.
Worth thinking about. Reminder this a weekly chart so it likely takes in quite a length of time.
Especially for those he speak about holding for 3 to 5 years. What exactly is your exit strategy? Because by the time the fundamental issues become clear the stock will likely be already dead and buried.
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