I’d choose A, but with one important condition: I’m not chasing price, I’m chasing quality.

A stock hitting new highs isn’t automatically expensive if its earnings, cash flow and competitive advantages are still growing. Buffett himself eventually moved away from simply buying “cheap” businesses, arguing that time is the friend of a wonderful business and the enemy of a mediocre one.

Buying the dip can work, but a falling price is not a thesis. Sometimes the stock is down because the business is genuinely deteriorating.

For me, the better question isn’t “Has it fallen?” or “Has it risen?” It’s: Will this business be worth significantly more five or ten years from now?

If the answer is yes, I’d rather pay a fair price for a great business than a bargain price for a weak one.

@TigerEvents [龇牙]