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

To: Dr. Ipsofacto who wrote (36844)	3/4/2010 2:53:38 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78482

OT. Ha. I remember it VERY well. -g- Yeah, Dr. Burry was pretty incensed. Of course, now he's worth $100M+, and I...uh...am not. My point was that it's "generally accepted" -g- that doctors make lousy investors. People say because they're gullible or maybe not so business-savvy - that they fall prey to various glib-talking advisers. My opinion has been that the docs are so darn successful - multi-talent success and maybe even standouts in everything they do in school, and getting the accolades for that, that they naturally assume they're going to be good stock market players/investors. A continuation of their successful history. Succeeding in the market should be pretty straightforward. I mean how hard can can it be... not brain surgery surely. The thing about investing or playing the market is that you really have little control over the environment: You can buy, sell, hold. You can determine the quantities you can bet. You can take out some insurance that maybe will protect or maybe that will give some psychological comfort (insurance as with hedging through options). But what you can't do as a small investor is work harder to change the company you've invested in. And - there are varying opinions on this here - there's no correlation between the more in-depth research made, the more successful the investment selection. So, imo, hard work and brains don't necessarily lead to success. Mike Burry (and others here) would surely disagree. Mike Burry from the article appears to be hard-wired very differently from most people. So maybe he's an exception. Lunch calls. Back later.

To: Dr. Ipsofacto who wrote (36844)	3/4/2010 6:44:19 PM
From: Madharry	Respond to of 78482

my advice to you is to start reading all of buffetts letters to shareholders as well this thread and dale's 50%. I dont use screens at all myself. i read a lot of postings on the internet and if something catches my interest i will start reading the sec documents and press releases. unfortunately a lot of companies seem cheap for a very good reason. either their management is dishonest or there business is going down the tubes. sometimes their sales are increasing but they are not collecting on their receivables for whatever reason. I think its very important to have some confidence in the manager and to try to understand the business and how the business translates into the numbers. If you dont really understand how the company generates revenues and the balance sheet items represent you are best off staying away. We all have different approaches. I dont have the capacity to own several hundreds of stocks and to follow them. I am lucky to remember why I own 20-35 particular stocks, and i probably focus on about 10 of them. a company usually doesnt have just one bad problem. For example I will be surprised if it turns out there is nothing else wrong with toyota. Therefore it usually makes sense to flee when you find one thing wrong with a company that you did not expect to find. I also like to see after a company's share price has tanked that insiders are stepping in and buying. I remember having discussions on the Crossy thread about ALY that looked really cheap except that even though the share price had dropped from the high teens to single digits, insiders were still selling rather than buying. the shares eventually dropped to a buck before rebounding some. another company i just looked at but cant remember the name, it seems like only the ceo owns shares, everyone else seems to be exercising their options and not retaining any shares. the number 2 guy in the company owns a grand total of 75 shares.

To: Dr. Ipsofacto who wrote (36844)	3/5/2010 11:56:10 AM
From: geoffrey Wren	Respond to of 78482

Dr. Ipsofacto: Running a stock screener or looking at recommended stocks is just a beginning. To invest in any stock you should have a decent idea of the industry and the specific stock. Once you have learned an industry you can more easily evaluate other stocks in the industry. Some industries we all have some familiarity with: retail stocks and supermarkets. At least there you can have some direct experience of the company. There are many industries I stay out of because I do not understand them. For instance drug development stocks. Now you might have a better understanding, but those stocks are always quite speculative. For myself I would never own an airline. Never have. I doubt I will. Unions, regulation, competition and the fact that jet fuel will soon enough be ever more expensive. I've always favored stocks that pay at least some dividend. For instance I would not buy a Cisco. Big, been around, but still pays no dividend. Paying a dividend is some indication that management understands that they work for the shareholders. And on that point, I tend to check whether management is getting too much for itself and is being honest. there are a lot of management cadres who seek to enrich themselves first and foremost. Also, be aware that management can outright lie in their press releases. Not so much on hard items like revenue, but on softer items like progress on certain goals,expected dates of completion, pick-up in business interest, etc.. On these types of items they cover themselves with a blanket preamble that all such statements are estimates and are not firm. Look at many stocks for every one you buy. Always read the most recent 10K before buying a stock.

To: Dr. Ipsofacto who wrote (36844)	3/8/2010 9:22:44 PM
From: Paul Senior	Respond to of 78482

Decided I will up my risk exposure with HUM, and I upped my few shares a bit more today. HUM shows ten years of increasing book value. And imo, a relatively (to itself) low p/e (8-9x). Stock possibly beat down with Pres. Obama speech and concern over what will happen to health insurers with any passage of health care reform. ROE's averaged about 15% with profit margins 2-3%. ROE's up now to about 20% (per Yahoo) which is about it's best year. I don't see from these numbers (15% and 2-3%) where HUM is making outrageous amounts of profits, if that's what politicians are claiming of insurers. In a better market, this stock has traded for >2x book value. Now it's 1.4x. I wouldn't call HUM a greatly undervalued stock: It's already moved up from it's lows. I bought a few shares of HUM in '04, and added small in '05, '08, '09. I figuring now (a little late perhaps -g-), that since I'm likely going to hold on for a year or so more to see how things play out, that I ought to have more than just a measly few shares. So now I have a few shares. -g- (I'm trying to imply this stock will work for me, I hope. For others, with different timeframes (patience levels), or analyses or goals or risk levels or whatever, it may not.)