I have been invested in ResMed in previous years, however I sold out (at a profit) some time ago because of some first and second hand info that suggested to me that while the company was a quality producer of quality products, their market share growth could be at risk. First, let me agree with everybody that Sleep Apnea is a massive problem that affects a very large percentage of the global population, and that it is certainly under-diagnosed - in that many people suffer from it but have not been diagnosed and/or have not sought any treatment for it. My concern was that the devices that ResMed produce and market tend to be bulky, often uncomfortable, and tend to restrict movement while sleeping - not so good for those of us who tend to toss and turn, rolling over multiple times in the night to get more comfortable. I have heard from a number of people (including family members) who have trialled one of ResMed's models and have said, "No way!" because they couldn't get any sleep WITH the mask on and the tube running from the mask to the machine beside the bed. They had more airflow, but even less sleep. Some people swear by these devices. Others don't like them at all. Horses for courses. I just felt that the market was primed for disruption from anyone who could get results with less intrusive medical hardware, or with no hardware at all - such as via a medication that reduced or cured sleep apnea - or a medication that got rid of the main risk factor(s) for sleep apnea.

In terms of the recent pullback in the ResMed share price, people here are probably right - it is probably a usual market overreaction. However, a second option should also be considered, which is that there was a fair amount of future growth priced into the ResMed share price previously, and that growth premium has perhaps now come out of the share price, or at the very least they are being priced now for LESS growth, or a much lower rate of future growth. The weight-loss pill talk has clearly been the catalyst, however it's probably a healthy correction to a share price that had probably got too far ahead of itself. I don't know if ResMed are now cheap. I would say they are now less expensive than they were. I still wouldn't invest in them again no matter how cheap they get because the negative reviews I have heard from people who have tried their machines are enough for me to have doubts about their future growth rates. Their gear works, it's just not very easy to use for many people, and those people will always be looking for a more convenient alternative.

Just my thoughts FWTW.

Further top up at $22.24 today .

The opportunity to buy quality businesses with proven track record of returns over long time at a discount to historical multiples doesn't come around often.

This 30% plus pull back from $34 when actual earnings and guidance remain in check presents as a comfortable position to take.

Deciding on the terminal earnings multiple is very hard. Would be interested in knowing what rules of thumb you and other investors use to arrive at a sensible figure for it.

My hunch is that for RMD, which is a mature company that can probably sustain high single-digit to low double-digit earnings growth (taking out the big boost from Covid, likely more towards the lower end of that range), I would like to be more conservative (25-30x?).