Thanks for the input. The advice so far seems to be to identify good companies with high and predictable growth and to buy based on the ratio of estimated earnings 5-10 years out to today’s price, if the ratio is attractive. Reasonable advice. This is pretty much what Buffett does, accept that he tries to look 15-20 years out. However Buffett said at the annual meeting that in 2008 he bought six months too early. Being six months and 25% too early doesn’t matter much if you’re going to hold for 30 years, but for those of us with shorter investment horizons buying too early in a down market can be painful. I’ll probably go ahead and buy, or average in, but like I said, my results in 2008 showed that waiting for the broad market to bottom and then start rising would have worked better.
PS. I assume that buying based on estimates of future sales or BV also works. I’m particularly attracted to companies with consistently high ROE, more so than to companies with high sales and earnings growth.
Thanks again for the input.
rrr12345