“Can Buy?”

As at the close of the market on Friday, our Bedokian Portfolio was down by about 4.75% since the beginning of the year, majority in part due to pessimistic market sentiments brought about by the ongoing Saas-pocalypse, rising oil prices and the fear of the collapse of private credit, to name a few obvious ones. It could have been worse, but we gave credit to the diversified nature of our investment portfolio and income returns from dividends for having a not-so-painful drawdown.

Picture generated by Meta AI

 

During this down market, some participants are engaged in panic selling, but seasoned investors instead see this as opportunities, after which the next question would be “can buy?”.

For us, we use what we call indicators and signs, which I had mentioned a bit in the eBook¹. In short, indicators are statistics, figures and hard data, i.e., quantitative, whereas signs are personal observations, user experiences and the subjective “gut feel”, i.e., qualitative. They are like instrument gauges to provide better clarity and judgement to make the final decision, i.e., push the “Buy” button.

Indicators

One of the indicators that we use is the “10-30 Rule” which I also shared in the eBook², but we shall look at the “10” part instead; for instance, to see if the general market is ripe to enter, for this period, we would take an index (e.g., the S&P500) closing numbers at the beginning and end of 2025, sum them up, divide by two, and multiply it by 0.9 (10% less, hence the “10”), which calculated to be around 5,721 points. With this number still below the last closing of 6,368.85 points, it tells us that the current situation is not low enough.

The “10-30 Rule” could also be tested on individual counters; take Microsoft’s price points at the start and end of 2025 and going through the formula, the number is USD 405.99, and with the last closing price of USD 356.77 below the former, it presented a strong buy consideration.

Another indicator utilised is the relative price-to-earnings (P/E) between the index and a selected counter. The common case study for this is Alphabet’s P/E compared with the S&P500’s, which was 17.36 and 21.76 respectively back in 2025³, and it was one of the key factors for us to load up additional Alphabet shares in that year.

Signs

While indicators can be calculated, signs require a more qualitative understanding of the goings-on of the market and companies in question, and they can be subjective. The important thing is to see if there is an upside potential for the market or business going forward.

The current example which I could show would be the Saas-pocalypse where artificial intelligence (AI) is going to eat every software company’s lunches. There are already two camps split over the future direction, with some believing AI is going to take over them, while others felt it is an overreaction and saw the possibility of AI and software companies working together: in economic studies terms, substitute or complementary.

Putting signs into the context of buy prices, the conviction is to have the notion of “the rest are wrong and I am right”, and the current price is mismatched to the potential value of the counter.

Fundamental Analysis

Indicators and signs are some of the tools used in conducting fundamental analysis, and there are many others that could be contemplated in making a buy call, like ratios, profitability, market share, etc. A complete look is necessary before deciding on the key factors and ultimately, the go-ahead to press the button.

Disclosure

The Bedokian is vested in the S&P 500 via the SPY ETF, Microsoft and Alphabet.

Disclaimer

1 – The Bedokian Portfolio (2^nd Ed), p153-154

2 – ibid, p131-133

3 – Foelber, Daniel. Meet the Only “Magnificent Seven” Stock That Is Cheaper Than the S&P 500 (According to This Key Metric). 27 Jun 2025. https://www.fool.com/investing/2025/06/27/magnificent-seven-stock-sp-500-buy-alphabet/ (accessed 28 Mar 2026)