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Strategies & Market Trends : Value Investing
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To: James Clarke who wrote (27868)8/27/2007 10:31:44 AM
From: Jurgis Bekepuris  Read Replies (2) of 78753
 
OK, I will ask the question: "At what price do real value investors sell?"

Let me clarify. I am mostly Buffettology investor. For me selling is simple: I buy when I expect 15% conservative annual return, I sell when expected return drops to ~5%. (No, it's not 10% rise in price... ;)).

But what about the REAL (TM) value investments. Let's say I buy company A for a book value. When do I sell it? At 1.5 book? At 2x book? How about company B that I bought for 1x cash? Do I sell it at 2xcash? 3x?

Let's assume for now that companies A and B are cigar butts and we have no expectations that they will turn around and become great companies earning tons of cash. When would you sell?

Let's try to keep this discussion thread somewhat on-topic without branching to specific companies/areas, other investment strategies, etc. :)

Just to start, I think the goal would be to sell at 2x book and maybe 2x-3x cash. But why should I believe the company would reach these levels if it's a cigar butt? ;)
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