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

To: Paul Senior who wrote (46568)	2/13/2012 4:31:23 PM
From: benbuffett	Respond to of 78751

Hi Paul, I was just doing a little reading last night on the kelly bet (fortunes formula) the book is pretty good. I guess it depends on how confident you feel the bet will work in your favor or how much margin of safety built in. If you look at portfolios such as Mohnish Pabrai or Seth Klarman they are using a form of the kelly criterion. Micheal Price uses this too but he places more bets with a smaller percentage to his total portfolio.

To: Paul Senior who wrote (46568)	2/13/2012 4:40:00 PM
From: gizwick	Read Replies (3) \| Respond to of 78751

My single best investment has always surpassed my expectations. I always build a position before the herd finds out and take profits when I have made a reasonable amount of money. I am tending to be a little more conservative as my years move along. I will nowdays find my best two or three best ideas and invest, and then if one begins to take off I will add shares. Bought FDUS the other day and also more BWEL, CERGF and RITPF based on agricultural need of China, etc.

To: Paul Senior who wrote (46568)	2/13/2012 9:38:38 PM
From: Madharry	Respond to of 78751

My best ideas certainly did not work out well in 2011 as far as Mr. Market is concerned. Selling too soon is anecdotally true for me. I dont know if its true if you look at the hundreds of trades ive made over the years but some of them really hurt. going alll the way back to disney when i was a kid, apple not that long ago and in 2008 LVS which i bough the day before The Street came out with a sell on it in the $2-3 range I thought I was astute selling it in the teens but now that is over $50 and I have not owned anything that has come close to tripling since I dont feel so smart. It is difficult as a value investor to hold onto something after you think its fairly valued and you see something that looks like a screaming bargain. I dont have an answer to selling too soon. The thing about some of these companies that are successful is they develop a model that works and then they have other things in the pipeline that a value investor cant gauge. One has to just accept that good management can be worth a lot more than value investors believe I guess. So I conclude that sometimes even good managers can stumble and then value investors can pick up the stock really cheap and then they should just hold on to some of it overpriced or not. I think that some of these mining/royalty companies are in that situation now. I was listening to some guy talking about silver today and he made the comment that there is very little silver around right now to be a safe haven investment relative to the amount of paper money and other investments out there like stocks and real estate. As people realize that they may not want to put all their eggs in dollar denominated assets he expects physical silver to be harder and harder to come by. Makes sense to me.