The hunting of shares to buy as the market was trembling? Remember this!

It has been a dramatic week in the markets, and there could be much more of where it came. Uncertainty markets can sometimes be a great place to go hunting bargains. That helps explain why I maintain a list of shares to buy if a difficult market carries its price at an attractive level.

But in doing so, I try to remember some important principles.

A great drop in the price is not necessarily equal to a bargain

When the market falls and the price of the shares falls quickly, it can be tempting to think that there must be some value on offer.

Actually, however, just because a price of shares lies largely does not necessarily make it a bargain.

Instead of comparing the cost of an action now with what it used to be, I think it makes more sense to compare it with what I think it is worth based on future commercial perspectives.

Some actions are demolished and do not return

Back in the 1999-2000 DOTCOM boom, the United Kingdom's retailer and technology service provider Component He shot, then crashed.

He returned to his previous price, but he took two decades To do it!

Other shares are hit in a turbulent market and never return to their previous price.

It can be tempting to think that a rock market drags most of the shares, so when the tide returns.

Actually that is not necessarily true.

It matters if the cause of an accident directly affects a business or not, and also if you have the financial means to get a storm.

While I am looking for shares to buy in the middle of the current market turbulence, then a question that I ask myself while weighing the assessment of companies such as Nvidia It is whether its long -term commercial value has probably been reduced or not.

Irrational markets still require rational thinking

When the market behaves in strange ways, some investors do the same.

Perhaps a price of the shares has become so apparently convincing, for example, that they forget the important principle of risk management diversification and place a disproportionate amount of their money in a single investment.

That can be an expensive mistake when the market is calm, and also when it is not.

Carry Record (LSE: RKT) as an example.

During the last market accident, after the beginning of the pandemic, an investor could have decided that there was money to earn in hygiene products.

Reckitt has patented formulations, strong brands such as Lysoldeep experience and a world distribution network.

However, in the last five years, the price of shares has fallen 16%.

That is quite bad, but it is put in an even worse perspective compared to the Ftse 100 index, of which Reckitt is a constituent. The index has increased 50% during the same period.

Some of the problems that Reckitt has faced, such as demands related to their nutrition business, were not necessarily obvious five years ago.

But that is exactly the point! Even an excellent company can find unforeseen problems.

So, no matter how tempting it may seem a particular participation when choppy markets move their much lower price, an intelligent investor always remains properly diversified.