Hi there Jack O B, and welcome to FVI.
With regard to ...
" .... (1) I've been a lurker on your thread and (2) wish you were more active"
(1) I'll take that as a compliment as you may believe that you could obtain something of value or interest from this forum, and
(2) In the current market conditions too much, IMO, is happening based on fear, emotion and uncertainty. That results in not much emphasis being placed on common sense Fundamentals.
If we take the two main US Indexes, the S&P500 and the DJI, we see that the S&P sits at about 1325 which is roughly where it was 17 months ago. Similarly, the DJI sits at about 12570 which is where it was about 14 months ago. So both indexes have generally moved sideways, within their own bands, which, I'd say, shows a certain lack of direction and trend in the market place.
You may have noticed on several of the Value threads where folk report a stock purchase at what they conclude is a cheap price, but only to find that, in a relatively short space of time, the price of that stock becomes even “cheaper”.
That’s not always to say that their conclusions and the basis for those conclusions were not reasonably sound. I believe it’s more a case that current decision making in the market is often based on fear and uncertainty rather than on sound Fundamentals.
On one day there’s news about the “Greek bailout” so an Index spikes upward. Within 24 hours the same Index will have lost most of that gain. Similarly with other declarations from Europe or within the US.
As a result, and speaking for myself, I've decided to remain more on the sidelines when it comes to investing or commenting on potential companies.
Of course, it is in times of fear and uncertainty that the likes of Buffett look to buy into more of those companies that meet his criteria for “Durable Competitive Advantage”, because they will still be around, and will very likely continue to make good profits, when all the dust of fear and uncertainty has settled.
Based on his ‘Equity Bond’ strategy it is most advantageous to increase one’s stake in those companies when their prices are depressed, due to market conditions, rather than their own business performance.
IMO one wouldn’t go far wrong if one were to follow his criteria for stock selection and investing, considering his own general success over many years and his experience gained through several periods of “market turmoil”.
I’ve done my best to detail his approach in my Board’s header.
Best wishes and success with your investments …. |
