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

To: J Mako who wrote (44978)	10/14/2011 12:08:09 AM
From: Jurgis Bekepuris	2 Recommendations Read Replies (1) \| Respond to of 78717

ROIBD: It's a tough call. Like Buffett and Munger say, read everything, learn everything. But, yeah, there are only 24 hours in a day and there's only so much you can do in a year. So is it worth it to spend time on something? I am not sure it just depends on current return expectations. I think Buffett and insurance is a great example. He spent a lot of time with Geico when he was young. Sure, he made money, but the big lesson of value of float in insurance did not sink in for decades. And the lesson of not buying cigar butts also did not sink in for quite a while. Now he says that he would have outperformed himself if he bought insurance company instead of Berkshire. And that's Buffett - one of the smartest investors ever. Would he have learned the lesson of float if he decided that insurance is boring, does not offer high enough returns and is not worth the ROIBD? Would he have learned the lesson about cigar butts if he never bought Berkshire? Maybe. So analyzing HP may not lead to great returns now either, but perhaps it will teach the person a lesson, which will return handsomely in the future either in selecting a great investment or in avoiding a money loss trap. On the other hand, yeah, perhaps spending half a year on Chinese RTO does not teach anything additional. You still don't know whether it's legit, you already know all the possible ways to fake the financials and you know that some of them are untraceable for you as small investor. So extra day on another possible fake might be waste of ROIBD. It's also possible that you spend time on something and yet you repeat the same mistakes next time and never learn from something. E.g. you analyze a cyclical, buy it at the top of the cycle, get burnt and then repeat the same thing during next cycle. If person does not learn, then perhaps time should be spent elsewhere or differently. But it's not easy to notice this for yourself and it's not often someone tells you that you are wasting time or repeating old mistakes. Still tough call. :)