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Strategies & Market Trends : Value Investing

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To: Calvin_2011 who wrote (42902)6/3/2011 9:18:08 AM
From: Mark Marcellus  Read Replies (2) of 78671
 
Calvin -

To add to what Paul said, if a business is properly run and is performing a service for which there is a legitimate need, changes to government regulation may hurt it but they won't kill it. Once the rules are set, whatever they are, the businesses will find a way to live with them. The key question is what the impact will be on the value of the company and what price would count as cheap. But, absent fraud or incompetence, you can assume that the company will continue as a going concern.

I've seen this play out many times in many arenas. Regulatory issues are just like any other short term business issue such as a soft economy, changes in fashion, etc. My view as a long term investor is that if the business is sound (and those are the only types of businesses a long term investor should be looking at) it will survive any of these road bumps. The only question is to decide whether the temporary uncertainty is presenting me with an attractive price. To paraphrase Warren Buffett, that decision is simple but it isn't easy.
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