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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: jeffbas who wrote (9304)	12/14/1999 12:47:00 PM
From: Paul Senior	Respond to of 78536

Jeffrey, re. FIT. "What to envision to make make the stock less cheap." Well, that's possibly the heart of the net-nets for me. If I start to envision an event that might occur, then I just automatically start to figure its likelihood. I ultimately wind up concluding that I either can't scope it or the specific likelihood is small. Therefore, I'd would avoid taking a position in the stock. I'd never buy. So I try NOT to envision a specific favorable event occurring that would improve the stock price. I just assume it will happen. Which I believe is different from the Jim Clarke way, in which he does try select stocks that also have good business prospects. These net-nets work out (sometimes) as a 'reasonable return' (Not for somebody who wants to give himself an edge by looking for possible 100% annual return investments.) And on a statistical basis. Which means to me, on an overall package of these type companies, enough favorable, unpredictable events will occur to make the package profitable. (Ben Graham liked large companies, I believe. But in today's market, the cigar butt pickings are smaller in size and frequency.) This is almost the same argument between value and growth. With a growth stock, you see it, it's right there, there are positives all over the place. With value, as MOO says, it's tough to separate the dented cans from the poisonous. My observation, for me, is that I can't separate them (dented vs. poisonous) when I find them. Therefore, I primarily have a package of value criteria that both types fall into. The dented can profits outweigh the poison traps -- that's my expectation anyway -g-.