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Strategies & Market Trends : Value Investing
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To: cfimx who wrote (5479)12/19/1998 1:03:00 AM
From: James Clarke  Read Replies (1) of 78744
 
No misunderstandings. I am absolutely not saying that you should look to buy lousy businesses. I am only saying that what works for me is a barbell strategy with great businesses at a good price at one end, and lousy businesses at a risk-free price at the other. I employ very different target multiples and analytical techniques depending on which category I put the investment into. The key is to be able to tell the difference.

And surprisingly, even in this bull market for Buffett type stocks, I have earned returns in excess of the S&P for the last two years with 75% of my net profits coming from my Graham stocks, i.e. the lousy businesses. I wouldn't be able to say that if I had diversified. I bet very big on St. Joe, and I bet pretty big on Penobscot Shoe. Maybe just luck, but that luck is my down payment on my first house next week. Thank you Ben Graham.

JJC
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