First to identify the company that may be a buying opportunity. Next is the looking into the financials of the company. To determine what a value may be placed on that particular company. This requires looking at the balance sheets, cash flow statements, and income statements. To determine how the money is being earned, used and spent. Once this is done then you can determine what a fair value would be, then you can compare the value to the current price to help assess whether is a margin of safety. Now is where patience comes into play. Because after you have done all the hard work to determine a price you would be willing to pay, you must be willing to wait for that stock to fall to that price so you can make your purchase.
“Patience is the companion of wisdom.” ~ St. Augustine
“The general who wins a battle makes many calculations in his temple before the battle is fought.”- Sun Tzu
Source : marketstechno