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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (46654)	2/17/2012 12:13:21 AM
From: Jurgis Bekepuris	Read Replies (2) of 78753

It is a key point. If you are buying without doing valuation analysis, you are no better than Gorilla Gamers. And we all know how that ended. OTOH, Clownbuck is completely self contradicting when he says 14PE and never was a value stock in the same sentence. 14PE can be a value stock. 20PE can be a value stock. A stock with no valuation analysis though is not a value stock. It is a belief investment. A belief in management, a belief in brand, a belief in demand or whatever. I refuse to do belief investments, but you guys can do what you want. And BTW, when Brian mentioned DELL, he made a great point without noticing it: most of lifetime stock successes are small caps that grow fast and more than anyone has expected. The megacaps like NSRGY or KO or JNJ may have been lifetime stocks. They won't be such in the future. It is impossible to grow at tremendous rates at these sizes. On the third hand, it is very hard to value small cap growth story and predict where it will end up. But once again, just refusing to do the valuation because it's hard, is a road to a lot of lost money.

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