Please give a detailed explanation your method is very good. The biggest thing I face as a fundamentalist is that most of the time my return sufferers due to wrong timing in right stock. You seem to have over come that problem.
Bang on! I am glad to read your reply and know that u r interested to learn, just as I am to share.
My overall approach is very simplistic. I want the best bargain for my cash. I do not mind waiting (hence, have looked into bond funds as well).
DCF pricing model is not realistic and not best suited for individuals. To time entries looking at the charts is best. Because the price has to and always respects Strong supports.
Lets look at a live ex.
I always wanted to buy bhel. Cuz its dividend giver and is a good business. DCF showed buy at Rs.330. But I hd my doubts since capital good and psu sectors are suffering and BHEL is BOTH.
So once price reached DCF value, I tracked the chart for momentum, which was madly bearish on the weekly chart!
I realized, I must wait for a strong support which can absorb this bearish momentum.... and that supportive band was
118 to 196 which is 30% lower than DCF value.
I waited. And finally... price touches in May '13. Then came detailed mapping of the chart to finally time the entry where the fun really begins... but it is a long and will be uninteresting to you since you are a FA person and not a chart person... short story... sensible entry price for BHEL is now 162.
I would have zero discomfort if price fell another 50% from here.
Just like that, I have some other stocks lined up... it is very interesting you see.