Perhaps the stock will be worth $400 one day but I am not willing to pay even $200 for shares.
Hi GauchoChris,
What would you pay for a share? I agree that at some point it has to come down to earth no matter how many of us think they will reach their future potential (I’m in at $150) and if you bought at____ (fill in a metric here if you wish), you might be value trapped for a long time.
So I guess for a stock like this, one would have to first develop a reasonable price/share number, (I read somewhere that a price to sales of no more than 15 for a momentum stock seemed reasonable) and then determine how much of a premium you would be willing to pay, if any, due to the disruptive nature of his business which basically means, it’s quite unpredictable where this juggernaut might end up.
Do you have a metric you use for special stocks that permit a higher buy in price than a fundamental analysis would suggest? We wrestle a lot with this question so it would be nice to have some parameters to think about.
Mykie