Buffett biographer Roger Lowenstein has written up value investing in his "Unconventional Wisdom" column in the Feb. 2000 issue of SmartMoney magazine.
This is no surprise--value is Lowenstein's home turf. He makes a very basic case for value, geared toward SmartMoney's time-impaired readers. None of his points will be news to anyone on this board. Still, it is worth reading, especially in these times when price has become a secondary consideration for many "investors".
I don't think the print articles from SmartMoney are available on the web (most of it isn't worth reading, anyway, IMO). A few excerpts:
"This is a fabulous time to be buying value stocks and value-oriented mutual funds...The time to buy them is now. Right now."
"On a relative basis, newspapers are even cheaper than they were in the '70s. Incredibly, you could buy every public newspaper company for less than the market value of Yahoo!"
"On an absolute basis, newspaper stocks are more expensive than in the '70s, but they are still compelling."
[Lowenstein doesn't say it explicitly, but the obvious conclusion to these two points is that the majority of the market is EXTREMELY expensive on an absolute basis.]
"The true polar opposite of value isn't 'growth' but momentum, and just as value is at a low, these are glory days for momentum investors."
"Good value is its own catalyst. You never know why or when stocks are going to move."
"Their cheap price is a measure of their potential, not their risk."
"Today is anything but a terrible time for value investing. It's the best time in years."
[Lowenstein notes the reinsurance and supermarket sectors in particular.]
FWIW, there was also a "Contrarian" article in the same issue on Furniture Brands Int'l (FBN), which made a value case for FBN. |
