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Sharing my thoughts based off the opinions and sentiments of the Tiger Community. With countless of posts cursing particular counters and generalising a stock to be "hopeless", "s***", etc. I felt a need to express my feelings with regards to selecting a company with weak management and poor prospects or seleing a stable company, but just at the wrong time. 

Several cases I have seen are the purchase of a regular stocks with growth potential, but at ridiculous prices. With the counter way overbought and overvalued, these unfortunate individuals then start hitting the market riding on the present sentiment. This results in the "investment" being an outright gamble as to whether or not such a bullish sentiment will continue. It is no better than horse racing, analysing the pit to see who is the crowd favourite. 

There are fairly simple ways of checking to see if you are paying too much for a share, just like how you would not spend $10 on a bottle of water, the same concept applies. Instead of settling on overpriced drinking water, you would look for another shop that would sell you a similar bottle of water for $1. Here are two simple indicators that can be obtained easily on Tiger Brokers:

The first indicator is P/E Ratio, which simply means the current share price compared to the company's actual earnings. This indicator must be considered alongside the industry that the company is in. In relation to the industry and its' competitors, is the price to earnings ratio much higher? If the current share price can be rationally supported by its earnings, or is lower than it should be, you may have found a stock for a bargain. 

The second indicator is the P/B Ratio. The price to book ratio is a comparison of the current market price of the stock to its companies actual assets less liabilities. In order words, it is a raw measure of whether the company's actual value is in tandem with the value the market gives it. By only considering the company's net assets, we filter out any market sentiments caused by cyclical swings, hyped up postive/negative news and analyst reports. Again, this ratio must be compared with the industry and its competitors. However, any prospected increase or decrease of future earnings must be taken into account. There is no prudence in purchasing a stock that is under Regulatory Surveillance or Query either. 

There is basically no overpriced stock, a price can never be to high if the company is able to produce stable earnings that support the current market price!