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

To: Dave who wrote (22917)	12/31/2005 3:37:46 AM
From: bruwin	Read Replies (1) \| Respond to of 78751

Interesting post Dave. With regard to housing and bonds etc.., in my part of the world we have what is known as an 'Access Bond'. This type of loan facility allows one to withdraw cash from one’s Bond when there is a difference between the original Bond size and the amount that has been paid off. This can be a useful source of needed cash because the interest rate of bonds make this the cheapest source of borrowed money. What I’d like to know, is such a facility available in the US ? A second question ... does the US residential and property market enable one to own an Apartment on Sectional Title ? In other words you own the "volume" that the Apartment occupies in the same way that you receive Title for a house. With regard to oil, and other natural fuels such as coal. I read, recently, a book entitled 'The Last Hours of Ancient Sunlight' by Thom Hartmann. He makes the interesting observation that there appears to be a correlation between the growth of world population and man’s discovery and access to natural energy sources. Prior to the discovery of coal, about 900 years ago, man was very reliant on his local forest for the supply of energy. This tended to limit sizes of population as there had to be some balance or harmony between numbers and energy supply. With the advent of coal, this new energy supply meant more forests could be decimated to be converted into croplands and support ever more people. World population went from about 500mil. in the year 1000 to about 1 billion in 1800. After the discovery of oil in the early 1800’s the size of the world’s population really took off. It took only 130 years for the world population to hit its second Billion, and a lesser 30 years for it to reach 3 Billion by 1960. Not surprisingly the world’s population now stands at over 6 Billion. It seems very unlikely that there could be a world population of 6 Billion if it wasn’t for oil and the part that it plays in the provision of energy, heating, conversion to synthetic products, resins, plastics, nylon, rayon, polyesters etc.. etc.. If the world’s structures continue to consume oil ... a LIMITED resource ... at their current rate, what will support the 6 billion PLUS in the years ahead, when it will inevitably get more expensive to find and extract, and eventually completely run out ?! Maybe this will lead to new areas of investment opportunities ! I agree with your contention to "disagree" regarding the definition of "Value". Like yourself, I also believe that an investor is likely to make the most when he buys something of value when it’s currently cheap. This is one of the cornerstones of my own investment strategy. However, the investment methodology of my mentor and good friend, Dr. Karl Posel, concludes that investing is, in fact, more of a (mathematical) science than an art. And if one follows that route it’s more than likely that one will be RIGHT - many, many times. Personally, I find it hard to believe that any investor enjoys making losses. If that is the case, shouldn’t they interrogate aspects of their strategy in order to determine why such an unattractive end result occurs ? Rest assured, I’m not hear to tell others what to do, but rather to question and debate particular aspects and components of investment strategies. If there is eventual, general consensus, by those with an open mind, that certain aspects are found wanting, then wouldn’t this be to the overall benefit of all ? I get the impression, from the general fundamental analysis market, that folk tend to use certain ratios and criteria because that’s what so many others do and therefore, by implication, it must be right. Surely any mathematical ratio or investment criteria must be able to stand up to logical scrutiny. It wasn’t that long ago that the majority believed that the sun revolved around the earth. However, it took the logic and in depth scientific understanding of a few, such as Galileo and Copernicus, to prove the exact opposite. And before we get some inane comment from the likes of c.worth, I see myself as very far removed from the scientific intellect of those two eminent gentlemen ! Best wishes with your investments in 2006.

To: Dave who wrote (22917)	12/31/2005 2:34:40 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78751

Dave, re: housing. Thanks for the positive comments on homebuilders. (Well, I interpret those comments as positive anyway.) I remember the old days when stock gurus pointed to stocks as being the much, much better investment than houses. S&P published every month a booklet with condensed stock data on maybe 2000 or more stocks. One of the columns was current stock price (as of pub. date), and another was high and low price of the stock in the past ten years. Quite amazing in flipping through the booklet to see how many stocks were currently up 10x or more from their lows. In other words, there were lots and lots of stocks where, if (IF!) you were lucky enough to buy at the lows sometime in the previous ten years, you'd be up 10x on your money now (on the publication date). You could not say that for houses. OTOH, the leverage involved with housing (20% down in those days) turns out - imo - to maybe offset the average rise in stock prices. There's also OTOH though - if I understand correctly - the Kiyosaki (Rich Dad/Poor Dad) idea that any "investment" you have to keep putting money INTO (e.g. make mortgage payments) and that you aren't get money out of, well that isn't really an investment. --- Aside: about WHR: have sold some, still holding a stub position purchased 5/05 @ $62.85/sh.