Moat Investor

Stock Price is Important

Controlled Greed has a good reminder that the price you pay for a stock is important. Moat Investors look for a margin of safety of at least 50%. That means that the price you pay for the stock is half of what you think it is actually worth based on your analysis of future growth and earnings. At 50%, you stand a good chance of making money.

Think it is impossible to find a stock for 50% off? Take a look at Panera Bread (PNRA). We beleive the margin of safety price to be in the $70s and it is currently trading in the $61-63 range. All stocks tumble from time to time in the short run as investors get edgy or find other hot picks or bargains. Controlled Greed reminds us to be patient.