Why is it Important to Invest in Stock When it Isn't Overvalued

In investing it is important to invest in good stocks, but it is equally important to invest in them when they are fairly valued or undervalued. This will increase the rate of the return form the same stock.
Lets see how can a good company which is over valued can bring down ones rate of return by a huge margin.

In this example of Indusind Bank, the bank known for consistent credit growth and stable NPA

In the year 2008, Indusind Bank traded at 131, where its EPS was only 2.35. with the P/E Ratio of 55.7. With the P/E Ratio of 55.7 and the yield of 1.7% the stock was extremely over valued.

After the 2008 market crash the stock corrected 78%

After the stock market crash the price of Indusind Bank came down to 29.8 and the EPS was 2.35. with The P/E Ratio 12.6 and the yield of 7.93%. At this price the company which was growing over 25% became extremely under valued.

Now Let us compare the return if one had entered the stock when it was undervalued and when it was overvalued

If one had entered the stock when it was overvalued at 131 at current market price the return would have been only around 635%

Where as if one had entered this stock after the Market crash of 2008 when it was trading at an undervalued price of 28. the investors would have got a whooping return of 3300%.
This is more than 5X of what one would have got if one had entered the stock at 131 during the market Peak