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Strategies & Market Trends : Value Investing

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Jurgis Bekepuris

sjemmeri

To: Paul Senior who wrote (55927)	8/22/2015 1:03:00 PM
From: Ford Law	2 Recommendations Read Replies (1) of 78656

This discussion reminds me of a particular paragraph in Intelligent Investor: "But note this important fact: The true investor scarcely ever is forced to sell his shares, and at all other times he is free to disregard the current price quotation. He need pay attention to it and act upon it only to the extent that it suits his book, and no more. Thus the investor who permits himself to be stampeded or unduly worried by unjustified market declines in his holdings is perversely transforming his basic advantage into a basic disadvantage. That man would be better off if his stocks had no market quotation at all, for he would then be spared the mental anguish caused him by other persons' mistakes of judgment." Based on the paragraph above and the points already made on portfolio allocation, it's a bit absurd to call someone who is holding mostly cash and prophesying that the markets will continue to decline until after the elections the "truest Grahamian" among us. The markets could absolutely decline until then and if holding all cash is what you have to do to sleep at night, there is nothing wrong with that. But let's not get carried away with market timing and predictions. And let's not blur the lines of value investing and Grahamian principles. As for Mike Burry, I am reminded of a quote from '01: "So, I will go on record right now as saying that this is a time of tremendous uncertainty about market direction - but no more so than at any time in the past. I continue to believe the prudent view is no market view. Rather, I will remain content in the certainty that popular predictions are less likely to come to pass than is believed and the absurd individual stock values will come along every once in a while regardless of what the market does."

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