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

To: Mr.Gogo who wrote (42476)	4/29/2011 9:59:02 AM
From: Jurgis Bekepuris	1 Recommendation Respond to of 78567

I disagree. What you suggest is just a part of value investing spectrum. probability for permanent destruction of capital ... close to 0 may be true for Buffettology investments and even there it's not necessarily true. Consider NOK which I once considered a Buffettology investment or a number of insurance companies that are favored by Buffett. There has not been a Graham investment in years that had zero percent probability of permanent destruction of capital - all Graham investments recently have been dinky companies that could keel over. Consider GRVY. IMHO there is a significant part of value investing where you measure probabilities and you say: 10% of going to zero, 30% of staying here, 60% of 2-5 bagger. It's still investing and not speculation like you imply. Now, where I agree with you is that assigning the probabilities is very hard and very inexact job. So I am fine when someone says that they won't invest in situations where you have to assign the probabilities. OTOH, I made huge gains in such situations (dinky pref shares in 2008-2009 crash that could have gone to zero), so I would not dismiss this approach offhand.