When there is a bull market or the price for a company goes up, then you are finding it hard to buy at reasonable price. What if the stock you purchased goes up from 40 to 50 within week, then what are you going to do? Are you going to buy more of that company even though it gone from 40 to 50 within week? How do you know that it going to go from 50 to 6o within another week? You don’t know. You just don’t know.

Did you found a clues? If you did found a clues then that mean you did some homework. Should you buy more because you think it going to go up base on the clues that you found? What if you buy at 60, then within 4 months it drop back to 40; should you kick yourself for not waiting for it to come back to 40?

There is no perfect approach but if you found the perfect approach, then I am all ears. If I ask you how much is that iPod and you offer to sell it, then I would want a discount. What if I can’t get a discount, and the stock price goes up. Should I abandon all the principle and discipline and just buy at high like everyone else? Looking back in the year 2000, investors kept buying no matter how high the stock went. They didn’t ask how much as long as the price keep going up. Suddenly every tech companies got shot down and investors were off guard; many people lost their life saving because they were being too greedy.

Summary

Don’t forget to ask how much for a company that you willing to pay. You will make mistakes more than once. You don’t have eyes to see the future, so be sure to have some margin of safety.