About waiting for the right time

It is amazing how much chatter there is about whether a particular stock is going (still) to go lower or whether it is "right time" to buy (supposedly at the bottom).

Then there are articles where commentators beat other investors or companies about being wrong on their timing.

Putting short term speculation aside,

my view is that the only right way to think about whether or not to buy (as investor) or execute buyback (as company) is to look at the price today. Nobody can predict the future reliably. The one who could would make a fortune in instant so would not bother making anything else than trading on perfect information.

If the price is attractive given the outlook today then it is a buy. If it is cheaper in the future, then buy some more. It is then even a better bargain.

Take for example, Micron (NASDAQ: MU) stock buyback program. Yes, the price has dropped while company buying back stock, but so what?

I do not know how Micron or any other management team executes stock buybacks, but generally it would make sense NOT to try to chase the market or try to please market commentators.

I would personally spread it out evenly and reserve a possibility for opportunistic buybacks in case market goes insane and the stock drops way below level I would view as attractive.

Another way to look at this is that nobody can really in their right mind say Micron is grossly overvalued or in bubble (i.e. investors have gone insane the other way - which they have in my opinion for some other tech stocks). That being the case, the alternatives are "the right price" (market is right always) or then there is a small chance market is undervaluing the company.

Stock market is about risk and reward. You do not get reward if you do not take risk. I rather have skin in the game than stay in the sidelines with the chance I can look smart afterwards if the stock continues lower.

Apart from speculative short term investors, who really cares where the stock goes from here short term if you are in for the long term?



Disclosure: Long Micron.