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

To: Shane M who wrote (40574)	12/14/2010 2:19:52 AM
From: Paul Senior	1 Recommendation Read Replies (2) \| Respond to of 78757

Yes, my personal opinion is you are taking liberties if you are posting trading ideas. My understanding of the Greenblatt procedure is that you buy with the idea of holding for one year and then rebalancing after a year. That's too short a time frame imo for value stocks to allow for value stocks to work out. Argument could be made that maybe Greenblatt's methods are only for a subset of value stocks (essentially high roe and low p/e), or that they aren't necessarily value stocks at all, or that he is culling losers (non-performers) from winners. I assume that under Greenblatt's rules, if a stock works out (rises enough, maybe enough so as not to qualify any longer as a MagicFormula pick), then you go ahead and sell it. Whether it happens one day or 364 days into the holding. A person doesn't go in though with the intent to sell after 2-3 months with his method, as I understand it. Well, it's all on a scale, and we have different ways of describing where we are vs. where others are. There was a guy here a few years back who believed if you go into a buy and have any intent to sell the stock -- two months out, two years out, ten years out - you were in his view not an investor but rather a timer. That seems extreme to me. On the other end of the scale, to say somebody makes a value buy with the intent to sell within a few months and where's there's no corporate business news a priori to justify that, to me two months is just too soon. Although in this market which has been in an uptrend the past several months and may correct at any time - maybe especially so after the end of year - then I certainly can see somebody going for a two-three month hold. To my knowledge and weak memory though, no professional value investor calls that value investing however. And since I go with it's not value investing, and this is a value thread, then yeah, it's taking liberties. Again, jmo. Keep posting though, because people who remember you do like and/or respect your ideas. And as thread moderator I don't see where your posts are distracting anybody. Your posts may be very helpful to us. (Welcome back!)