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

To: Jurgis Bekepuris who wrote (43397)	7/21/2011 2:02:21 PM
From: badi_	1 Recommendation Read Replies (2) \| Respond to of 78470

Yeah, I will. And like said earlier it is nothing like collecting lottery tickets, it is about understanding uncertainty and studying a company's exposure to very big growth: Black Swans. This is value investing, you just didn't know about it until I told you. My strategy is about studying a company on several levels, some of the important ones: 1. The approach to randomness 2. The scalability of growth 1.) The approach to randomness is a very wide subject, but I will give you some examples: a)Overspecialization reduces exposure to Positive Black Swans, on the other side it might increase exposure to Negative Black Swans. b) Having a research and development facility increases exposure to Positive Black Swans, here the management style of the research/development/innovation facility can influence the exposure. One very important factor here is management style. 2.) The scalability of growth, some examples: a) A barbershop isn't expected to take over the biggest share in the market no matter what good service it provides. The barber's revenues are stable and not expected to make very big growth comparing to competition. b) Internet companies are great example of Positive Black Swan businesses, i.e. Google dominates the internet search (for now), this is very unstable market on both ends: the small may grow fast, and the big may fall fast. Here I study the type of business the company is involved in, the type of products...etc I also try to answer questions like the following: The fast growth of sales will it be held down but the investment limits? As in the internet business any company may be the next one to dominate a given market while having the increase of investments very small comparing to the increase in sales. As I said in the first post I am not very good at presentations, but I can answer questions or provocative attitudes. P.S.: can any admin give me the upgrade? As I have some private messages that I can't answer with my current account status. Thanks !