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The Anatomy Of A High Conviction Buy: Why Valuation Is Important But Overrated

January 10 2020

What Is A Conviction Buy?

Is it true that one can reduce risk by buying stocks with a cheaper valuation? Should valuation play such an important role in the investment process? When I search for investment opportunities, I do not ignore valuation, but valuation is the last element I look at. I don't buy stocks just because they're cheap; on the contrary, most of the time, I avoid stocks because they do not pass my qualitative filters like strong balance sheets or aligned management teams. In this article, I explain what it takes for stock to become a high conviction buy.

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(Source: Seeking Alpha)

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