December 4, 2017

Buying Stocks at 52 week Highs: Presentation and Summary

No one likes to buy at a high price. But price that’s going up can, at many times, indicate a fundamental change in the business that has been recognized by some early investors.

Yes, there are issues: You can have people manipulate stocks, and then, buying will hurt. But a strong fundamental check after a stock has hit a new high is a useful way to filter out the duds. Effectively, you can use a 52-week high as a discovery mechanism to find great fundamental stories.

Sometimes stocks move because of new buying. From promoters, who want more of their stock when it’s undervalued. From institutions who have just discovered the stock. From “informed” investors. Retail is usually the last to jump in, but the inexplicable early stock moves sometimes predate the fundamental changes.


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