How to decide buy price and sell price of any stock?

Hi seniors,

Please teach us, how to decide the buy price and sell price of any stock.

No definite answers there.To begin with any newcomer has the option to find a good money manager,invest in index funds,etc if you don’t have the knowledge or experience to handle your own money.Meanwhile give yourself enough time a couple of years (1-2 years may be if you are really dedicated) to be in the market & learn this art with passion.

This can feel very difficult if your time horizon is too short (Usually Greed kicks in here & individuals will start thinking about losing opportunity rather than about capital preservation).So what some one can do is to increase the time horizon he/she plans to be in the market to lets say 25-30 years (assuming the individual is a young guy).

Then once you are confident about your skills & understood what investment style suits you then start managing your money.

Why do I suggest this long route - simply because I advise anyone to focus more on capital preservation than worrying about losing opportunities you may find on a bull market at the beginning of your investment journey.Keep at most belief that by the time you become an expert market will present you excellent investment opportunities.

Short answer to your question,I think no short cuts here like when to buy/sell shares & if there was everyone would have been rich which will be a definite aberration in the world order :slightly_smiling:

Disclaimer : Just few thoughts here & I don’t claim myself to be a senior or an expert…

Thanks for the reply

My question here is, suppose i have identified a good business and want to buy the stock. Now if the stock price is more thanhow i will decide weather the cmp is roght or wait for the right price. So how to decide what is the right price or intrinsic value.



There are many good books available on valuations. For example, ‘The Five Rules for Successful Stock Investing’ by Pat Dorsey gives you a fair idea on how to evaluate a stock. Although there is no single formula that works for all businesses.

But once you understand the fair value of a business (this comes with practice and experience), you can buy the underlying stock when it is substantially cheaper than the fair value. That’s the idea of value investing IMO.

I will try to reframe your question

How to you compare across TVs and buy …

First you decide on what you require from TV : There is no such thing like good quality TV : different people like different kind of features like resolution , screen size , 3d Features etc …

Similarly different stocks ( business ) has different features : Consistent earning , High growth , Dividend paying , Low PE & P/B and so on … Each of these features are important depending business you invest in and your age , other source of income etc .

Second : Price : When you buy TV you compare price of similar featured TVs offers across distribution channels, check it across brand ( can you get same features ) .

In stocks you should similarly compare business value with their competitors across India and globe . How they are valued, is it on PE , or is it on Price to Sales , Price to Book etc … Then compare that value of company across timeline on same paramaters . This will give an idea if price is higher or lower compared to their peers and across history …

Learn by trial and error for first two years by deploying not more than 5% of your saving and then slowly increase it . Rest portion you can deploy in Mutual funds and which you can reduce as you learn.