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

To: Paul Senior who wrote (61591)	12/30/2018 1:51:00 PM
From: Graham Osborn	Respond to of 78751

Hi Paul, as I think about it, my 10 years is more about forecastability than holding period. As an owner I should only discount the cash flows I am confident I will receive. If I plan to sell after 5 years that would be one constraint. If I feel fuzzy about the prospects of the company after 3 years that would be another. All would have a bearing on my valuation and the corresponding price I would be willing to pay. When I buy a growing business I am usually planning to hold it indefinitely, if I am honest with myself. I don't have sell dates marked in my calendar, nor do I have any plans to sell above or below a certain price. I don't have any problem with Graham-type picks on principle. There are some floating around this board and I've looked at several. Liquidity and realization of value are both problems. At a time like today there are so many buyouts happening that it seems like less of a problem, but if M&A market cools off I feel like it would be hard to get my money out of some of these things without enough capital to buy the whole business and liquidate it. Believe me, I love cheap things. But I also like things with some built-in catalysts. One of the most basic catalysts is good disclosure by management. If the business is improving, the price should follow sooner or later. When disclosure is minimal and the business is going nowhere (which tends to be the case with net-nets), you almost need more patience that with growth stocks. But the rewards can be considerable.