I'm 14 and i'm appraising NIKE corp. I realize a comapny like NIKE, Microsoft, Phizer, etc. stock price can't be justified by assest value rather future growth and market position. Is current asset value more important than future growth or are both needed to clear any specualtion? I'm a investor looking for cheap comapanies but not risky comapanies. To intertwine my question how could I use MPT and efficient frontier to judge my portfolio? (I just recently came accross the theory and I'm intrested in learning more about it and how to useit)
I'm 14 also so I'm happy to help. Future growth and asset value are both important. I know Modern portfolio theory and how to use it, but unless you understand higher mathematics, then the idea might make sense but you won't be able to put it into practice.
Just buy Gold commodity; this is a bear market. None of these accounting indicators mean anything when fear is in the market.
MPT assumes you're going to be diversifying to lower your downside risk. Oddly enough, timing is another thing which, done systematically and consistently, can lower portfolio risk over long periods of time.
The efficient frontier is probably how Warren Buffet has made his money, except he somehow figured it out intuitively. You would do well to do half as well!
Good luck!
