The community website “Ten Bags Full” features contributor’s’ predictions, and follows them through to their conclusions. It is one thing to set a target price to be attained, and a much more challenging or impossible task to suggest a date for fulfilment.
Targets may be based on a calculation of value from fundamental data including present and future profitability. Another approach is to use technical analysis to make assumptions about the probable direction of price movement and estimation of the momentum of trends. Others may use past experiences of similar stocks. Still others advance wildly ambitious targets that may persuade others to get on board.
Why bother with making predictions anyway? Mostly they are well off-target.
For me the attraction was to test the value of technical analysis. Could TA impart some guidance for the future about what might happen to the share-price? Frequently accurate projections are an impossibility. What they do though is to provide a tool to follow the share-price as it progresses. Targets can be set to be reached along the way. Deviation from the expected course might then suggest when to exit.
Trend investing is one of the commonest and most profitable strategies investors can use. Predictions may increase one’s success in looking for and capturing profitable trends.
I believe that making predictions or setting targets is a serial task. When one target is reached, the next should be looked for.
This is an updated prediction I have set for CBA using their format. You may wish to see what you think. Do let us know your thoughts!