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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Stock Farmer who wrote (45974)	8/29/2001 5:54:01 PM
From: Art Bechhoefer	Read Replies (2) \| Respond to of 54805

John, good points. Behind them, I suspect, is the assumption that many people hold, that market price of a stock reflects the value of all the assets, good and bad, and all the information available on the stock at a given point in time. This is another way of saying that market price conforms to the "efficient market" theory. The assumption I make is that the market tends to be inefficient because of the difficulty in placing a value on things like proprietary technology. So, what I am doing is looking for signs that the share price does NOT accurately reflect the intrinsic value of the company and that as a result a bargain or an overpriced white elephant may be out there. If I were to assume that the market is efficient, then investing would be easy: I'd simply buy an index fund, and that would be that. In this sense, I'm in complete agreement with the investment approach taken by Warren Buffett and other value oriented investors. Art