This is a bit off topic, but.....
Here's one thing I've never really understood about "value" investing. Lets say value investing is buying stocks that trade at below average price to book, price to sales, whatever metric you use.
So you look at a stock, say XYZ. It's $50. You do your analysis, and you decide it is a value buy at $30. So the stock has no real news and falls to $40. Then it falls to $35. You don't buy, because you want to buy at $30. It goes to $33. It goes to $32.
It goes to $31 on Monday. You still don't buy.
Then it hits $30, on Tuesdsay, you buy some.
And then on Wednesday it goes to $31.
Naturally you don't sell it, right?
So how did it work out that when it was $31 on Monday, you didn't want to buy it. But when it is $31 on Wednesday of the same week, you own it and you don't want to sell it? If it's worth holding at $31 on Wednesday, it seems like it should be worth buying at $31 on Monday.
In other words - I get the "value" idea for buying a stock, but once it moves up even a little bit, it's probably no longer what you consider "good value" since you didn't buy it at that level on the way down, you waited until it hit your "good value" target. If you have prices that you consider "good value" once the shares begin to appreciate from that level, they naturally are no longer "good value" or are less "good value", so it seems like you're never going to hit a home run with a value stock, you're probably just going to squeeze out 10% or so if you're lucky and then not like the stock again.
Just some musings!
PS - I've always found the decision of where to sell a lot harder than where to buy. My sell strategy, to the extent that I have one, is don't sell losers. It leaves me with a catch-22. I tend to not sell the losers. And the winners, well they usually have improving stories and are doing well, so I don't want to sell them either! |
