4Settimana
"My starting price would therefore only be around 340 euros, although I have already invested in a part via nestle."
I don't understand about Nestle. But we are only 3% above your desired entry price. So why don't you buy the first tranche? Should entering 3% cheaper really make a difference in the long run?
I don't understand about Nestle. But we are only 3% above your desired entry price. So why don't you buy the first tranche? Should entering 3% cheaper really make a difference in the long run?
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4Settimana
@Soprano Nestlé holds 20% of L'Oréal, and I think you should stick roughly to the set limit of ±1%. In the end, it may be true that you don't lose much return, but you still lose something. I think it's too easy to say that it doesn't matter in the end. That would be tempting yourself to ignore your limit and overpay just because you really want the stock. It's not classic FOMO, but if you do it regularly, the opportunity cost is similarly high. Just because it's not directly visible in the end doesn't mean you haven't overpaid in real terms.
That's easy to say if you actively follow several stocks. If you only have one, then maybe +-3% would be okay.
That's easy to say if you actively follow several stocks. If you only have one, then maybe +-3% would be okay.
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•4Settimana
@topicswithhead Thanks for explaining your thought. However, I would argue that we don't know the exact fair value of a share. Just because I say (or calculate) that a share is worth 100 does not necessarily mean that it is worth 100. There is an inaccuracy of at least 5%. It could be that I buy at 102 and think I have overpaid, whereas the value would already have been 108 and I have actually received something on top.
In any case, I still think it's really great that you're sticking to this principle.
You should also bear in mind that you may never reach your target price. Then you might miss out on even more returns. An example for me is Crowdstrike. I told myself in the summer that the share was only worth buying from €180. But it never actually went below €197 and is now at €280. I'm personally not at all annoyed about this because the risk was too great with a >10% deviation.
But if we had already been at €184 and I still hadn't done anything, I would have been really annoyed afterwards that I left €100 lying around for fear of being €4 too expensive.
In any case, I still think it's really great that you're sticking to this principle.
You should also bear in mind that you may never reach your target price. Then you might miss out on even more returns. An example for me is Crowdstrike. I told myself in the summer that the share was only worth buying from €180. But it never actually went below €197 and is now at €280. I'm personally not at all annoyed about this because the risk was too great with a >10% deviation.
But if we had already been at €184 and I still hadn't done anything, I would have been really annoyed afterwards that I left €100 lying around for fear of being €4 too expensive.
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4Settimana
@Soprano of course you can't calculate the real fair value, especially because you always work with historical data and rely on forecasts that are not foreseeable now. nevertheless, you have to assign a value to the share. I have already lost great shares with it and your point of "maybe the share will never get to the point" hits deep wounds but I mean if you don't stick to your own work it is worth very little. For me it's just a way to reduce FOMO and I mean if you think the 3% doesn't matter much you can personally just move the fair value.
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•4Settimana
@topicswithhead I don't want to say that this is not the case. I have also bought shares higher but I don't see myself having to do so with L'Oréal. And then there are the taxes
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•4Settimana
Ultimately, you just have to know yourself. FOMO has never been a problem for me. Rather that I was too cautious when I first entered the market but bought unlimited amounts of garbage stocks because I can't admit to having been completely wrong.
You could also accuse me of saying the exact opposite with ASML and warning against an overly expensive entry and now with Loreal I'm saying that a few euros don't matter.
I probably just enjoy the scientific-philosophical discussions with you too much.
You could also accuse me of saying the exact opposite with ASML and warning against an overly expensive entry and now with Loreal I'm saying that a few euros don't matter.
I probably just enjoy the scientific-philosophical discussions with you too much.
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