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

To: Paul Senior who wrote (46609)	2/15/2012 8:41:04 PM
From: Lazarus	Respond to of 78766

I recall hearing a guy back around 1987 who said if you want to own a stock that you can just buy and forget about --- buy Franklin Electric: Chart: finance.yahoo.com of course i didnt buy any.

To: Paul Senior who wrote (46609)	2/15/2012 8:54:21 PM
From: E_K_S	2 Recommendations Read Replies (1) \| Respond to of 78766

One of my first "conservative" investments as a teenager; I believe at the time met all the conditions from your book: Universal global appeal Instant name brand recognition Products or services you "dispassionately believe" will continue to be in demand "for years" The Answer: EASTMAN KODAK CO (Note: I sold it only holding only for a few years) Longest held investments: BHP Billiton Limited Common Sto (NYSE: BHP) A gift from my Father's estate. 4th largest holding in portfolio (5.5%) Purchased 12/11/90 Chevron Corporation Common Stoc (NYSE: CVX) My top holding adding shares from time to time (2003, 2004 & 2006). Represents almost 10% of the portfolio. One of my fist Long Term investments in early 1980's was Texaco. I believe it was selling around BV and paid a very good dividend at the time almost 5%. Texaco was merged w/ Chevron/Mobile. I added a few shares in 2003. Should have reinvested the dividends. Sempra Energy Common Stock (NYSE: SRE) A college graduation gift from my Father. Originally known as San Diego Gas & Electric. This one I just continued to hold beginning in the early 1980's. It always paid a good dividend. Sempra Energy was created through the 1998 merger of Los Angeles-based Pacific Enterprises, the parent company of Southern California Gas, and Enova Corporation, the parent company of San Diego Gas & Electric. I sold about 20% of the position over the years but the original gift in 1980 (after selling 20% of the shares) has increased 680% not counting dividends. Their biggest gains came from their NG pipeline subsidiary Sempra U.S. Gas & Power ( sempra.com ) which today is probably their most valuable asset. ------------------------------------------------------------------------------------------------- My best investments (and themes) came from my father which I continue today. I am not the eventual "Gold" Bug he became (he was loading up on gold and gold stocks when gold was $320/oz) but look to all the Natural Resource Companies for "Value". Many were Oil companies but others included both junior and major mining companies. His value investing criteria to me was (1) Buy stocks that sell for a 10 PE or less and (2) Look to companies that own hard assets (as a store of value). I believe both those suggestions still work today. EKS

To: Paul Senior who wrote (46609)	2/15/2012 9:02:43 PM
From: Madharry	Respond to of 78766

I thought about what you said and I think that we are all the victims of survivorship bias to some extent. I keep beating myself up for selling Disney when I was a teen but that was a very successful survivor of that time period xerox polaroid general motors kodak magnavox zenith chrysler, and the air lines have not fared nearly as well. On the other hand value investors like buffett have done really well . One of my bosses in the late 80s ( seems like long ago) told me he bought Berkshire Hathaway in the late 60s he didnt tell me how much of it owned but from the smile on his face I figured he was working mostly to get away from his wife. So here we are trying to figure which company will offer us sustained growth and untold riches in 20 years. My guess is that just like we talked about apple several times as a value stock, but no one said this is the one stock we need to hold for the next twenty years back in 1995 when i first started coming here, I dont think anyone will bring that magical stock to our attention today.

To: Paul Senior who wrote (46609)	2/15/2012 11:43:56 PM
From: Jurgis Bekepuris	Read Replies (1) \| Respond to of 78766

"I look back at some stocks that seem to meet Spooner's criteria and that I could've bought them 30, 40 or more years ago, and if I just held on, I would've done really satisfactorily at this point in my life. Better than really good if I had reinvested dividends and/or bought dips." Yes. But... ...you knew there is going to be a but... :) Look at the 10-15 year charts of KO, MSFT, JNJ and repeat the above. Hell, I am not even talking about Kodak, XRX or Polaroid. Universal global appeal Instant name brand recognition Products or services you "dispassionately believe" will continue to be in demand "for years" All three criteria satisfied. All three criteria satisfied for 15 years looking back! Not even the future prediction nonsense. We know these companies have had universal appeal, instant brand recogniztion and products in demand. And the stock prices went exactly nowhere. Would you be confident to advise someone to hold KO, MSFT, JNJ for another 20 years and expect that they will have a good return after 30 years are all said and done? It's not as simple as Buffett-Spooner-concentrated portfolio proponents try to make it sound. And, yes survivorship bias rules.

To: Paul Senior who wrote (46609)	2/16/2012 1:02:40 AM
From: Jurgis Bekepuris	Read Replies (2) \| Respond to of 78766

I went through my buy list looking for: Universal global appeal Instant name brand recognition Products or services you "dispassionately believe" will continue to be in demand "for years" I found exactly two companies that are attractively priced and fit the bill: AAPL and MSFT. :) Two more second-tier-not-so-sure dark horse candidates: DELL and MGDDY. Runners up: AXP (not very cheap), GOOG (not very cheap), INTC (not very cheap), JNJ (not very cheap), MA (expensive), TJX (expensive). The rest? Either not cheap (enough) or do not satisfy the criteria. Honestly, it would be very hard for me to recommend holding any of the above for 20+ years with expectation of superior returns. :( Disclosure: I hold a large position in MSFT and smallish positions in AXP, DELL, INTC, JNJ, MA, MGDDY, TJX.