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

To: TimbaBear who wrote (11899)	1/18/2001 12:03:08 AM
From: James Clarke	Read Replies (1) \| Respond to of 78633

<< resulted in a step of the calculation being skipped, (the one where the liabilities get subtracted)>> If you're going to make a calculation error in valuation, that's about the biggest one you can make. (I think I recall Graham saying discount the assets, assume the liabilities are real.) We've all made mistakes. The only unforgivable ones are the ones that you don't learn from and make twice. But the real mistake would be if you rationalize holding these stocks you never would have bought if your model worked properly. I've bought stocks on erroneous analysis and then found another reason to own them and it usually wound up a big loss. (often the mistake was caught by somebody on this thread - I remember Mike Burry catching my error in Mattel and I didn't listen to him, and lost a lot of money.) Sell the stocks tomorrow and don't look at them again. If they go up, that's random - it has nothing to do with the reason you bought them. Then fix your model and find one good net-net investment. You'll find they're not so easy to find when you subtract liabilities.