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Strategies & Market Trends : Value Investing
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To: William Cloutier who wrote (58108)10/5/2016 5:29:48 AM
From: staring  Read Replies (2) of 78748
 
Well, I would say that since the 70's it is hard to find Graham's like stocks. Companies trading below working capital are an aberration... In my view, in those times information asymmetry was greater and so were the behavioral biases. In the rise of hostile M&A in the 80's by professional investors, such bargains became more rare... Simply because there were more people looking for them.

The current interest rates levels, in my view, just make more difficult to find value opportunities, especially in the US. There is just too much liquidity in the market. For instance, when Michael Burry started out is fund 2000/2001 he promised an expected return of 20% per year. Nowadays I doubt he would make that promise... I can still find reasonably priced stocks but they more rare and do not have the potential to deliver such returns... In Europe I am finding more of such opportunities now in smaller companies. Markets are not so efficient and some interesting companies are forgotten by the market for some time. Nonetheless, overall, I think it may be realistic to say that it is possible to deliver an Average annual return of 10% a year (even though the major indexes will probably deliver (at best) a 5/6% annual return a year in the coming 10 years. But I think 20% is almost impossible to get through stock picking...
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