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

To: MCsweet who wrote (51415)	4/24/2013 4:59:03 PM
From: Jurgis Bekepuris	Respond to of 78659

I think I only partially agree with you. Clearly, someone who bought BRK 10 years ago when it was already large (huge) cap and known to everybody still outperformed S&P500. You are right that micro/mini caps have less competition in terms of analysis. But on the other hand, very few micro/mini caps are Buffettology stocks. Or in other words, very few have moats and sustainable business models. So, yeah, you might make money in cigar butts, but you are less likely to buy something that you can hold for 10 years and see it grow and compound. In essence, I think I'd argue for mid caps that have growth potential (they are not yet huge), but may already have moat / brand (they are not micro cigar butts trying to survive). I've always been partial to Buffettology. I mostly post here because the other thread is much deader. :) Most of the Graham/Low-PB stocks do not interest me. And for me - unlike you - most of them don't work out well. Either I wait too long and they round trip (or just drop and never go up) or I wait too short and sell before they run up. It's hard for me psychologically to hold a crappy or declining business if I don't see how it can prosper and I only expect the gain because market may go from "ridiculously cheap" to "somewhat cheap" valuation. I understand where you are coming from though. And it's quite possible that your approach may work well for you and outperform indexes and "Buffetty" investors such as me. :)

To: MCsweet who wrote (51415)	4/24/2013 5:20:09 PM
From: Jurgis Bekepuris	1 Recommendation Read Replies (1) \| Respond to of 78659

I think I mentioned this already, but I think part of this discussion is due to the strong performance of S&P in last year and year-to-date. It was easy to outperform indexes/market during lost decade and market crashes. If we gonna get a market bull run, it's gonna be hard to outperform indexes whether you buy large caps or small cap value. Buffett says this: his outperformance was mostly better in weak-index years. Prem Watsa says this. Pretty much most of value investors know this. So yeah, if we knew that S&P is gonna run, we should just go to indexes. Unless you believe that you can outperform 10-15% index runup with whatever value leftovers are available. :) I'm not sure I can, but others might be better at it. :) (The reason I don't go to index is that I am not convinced that S&P is going to perform well for coming years. And I am probably a bit overconfident that I can outperform haha)

To: MCsweet who wrote (51415)	4/29/2013 10:06:51 AM
From: Paul Senior	Read Replies (2) \| Respond to of 78659

STRL. Sterling Construction. I'll take a few tracking shares of this new add to AAII's Shadow Stock Portfolio finance.yahoo.com

To: MCsweet who wrote (51415)	8/29/2013 6:21:37 PM
From: E_K_S	Read Replies (2) \| Respond to of 78659

Hi McSweet - The two following stocks were suggested as value buys today on the mIRC #smallcaps chat board. I have done some preliminary research and both look like good value candidate stocks. You mentioned PFIN in an earlier post so I was looking to your thoughts on that one. I also like LBMH as a small cap value/growth play w/ a 7% dividend to boot. goo.gl P&F Industries Inc. (NasdaqGM: PFIN) - 6.90 Down 0.47(6.38%) Liberator Medical Holdings, Inc. (OTC BB: LBMH)- 1.62 Up 0.03(1.89%) ------------------------------------------------------------------- PFIN has a PE of 5, low debt profile with LT debt only 2.63x annual net income and selling at .87x TBV, Earnings have been spotty for PFIN but positive the last two years as they restructure and downsize/restructure divisions that continue to lose money. ---------------------------------------------------------------------------------- LBMH has a PE of 14.7, low debt profile with LT debt only 0.48x annual net income, positive growing earnings since 2010 and generates sufficient cash flow to fund a 7.5% dividend (w/ only a 17% payout ratio). The exciting story for LBMG is their revenue growth. They are in a sector that should continue to grow too. Management has done a pretty good job of growing BV too. Seems like a bargain at 14.7 PE. (Note: You have probably have seen their late night commercials for urological catheters and diabetic supplies. Here is another one too) I have no position in either but have set a GTC order for LBMG on any pull back for a starter position. Opinions are welcomed as these candidate stocks are small caps and may/could do well in any sustained recovery but both have two different stories. One is a restructure (PFIN) story while the other (LBMG) is a growth story in a huge future growth market, health care. EKS