Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Jurgis Bekepuris who wrote (48778)	7/15/2012 12:26:34 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78627

The interview and comments were very good, imo. Thanks for posting. I offer my 2c here: 1. Unlike last cycle, this time I missed the housing cycle (referring the lows of home building/related stocks). That Mr. Marks is buying foreclosed houses to rent out ( "Waypoint, which owns 1100 houses and is buying five more a day, ... firm co-founded by billionaire Howard Marks..." (4/12)) surprised me a little in that he would go to direct ownership and management of properties. Otoh, this is where opportunities seem to be, so why not. Digression: I want to add also, that my former accountant had been doing this successfully also on scale. That is, working with one clerical assistant, he accumulated about over 1500 distressed homes/apts in Las Vegas, eventually selling them en mass. He then picked Pittsburgh, and patiently accumulated well over 1000 distressed/foreclosed houses&apts there. Can you imagine just 2 people managing all those properties from an office hundreds or thousands of miles away? It was made somewhat easier because they were rented Section 8 (welfare), so the gov't paid most of the rents. But still. He had a system, and a process that worked fabulously. He was generous in showing me the details, but I and others could never get the gumption or drive to get started replicating it. 2. Somewhere in the interview, I got the impression that Mr. Marks was saying that bottom-up guys or value investors were doing okay, and that they didn't use or depend on macro stuff. The part about value investors doing okay -- doing okay now -- that I wonder about. I'm not really aware of value guys doing okay or good or well now. On this thread or on SI for that matter, a lot of value people seem into conservative things (e.g. preferreds or cash) - more so than ever before. Which I assume allows for safety and relative performance, but not "good" stock performance. Nor can I recall seeing notable articles recently about value funds (which I assume must maintain close to full-invested positions) being highlighted for their investment picks and performance. Growth investors don't seem to be doing that well either. Just so much seems to be correlated now, and no stock-picking methodology stands out for doing well now. That may be because of the macro environment (including the resulting volatility) and the importance that people now give it. (Perhaps it's only people like Mr. Marks who invest in distressed bonds who can claim to do well.) So macro maybe does play an important role, at least now - now in the short-term -- as regards performance of value funds/value stock pickers. 3. This thread is usually a value thread in the Ben Graham tradition, so thankfully we don't deal with macro events, macro-forecasting. Mr. Marks might approve. :>)