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

To: Paul Senior who wrote (61832)	3/27/2019 11:00:45 AM
From: Graham Osborn	2 Recommendations Recommended By E_K_S Lance Bredvold Read Replies (3) \| Respond to of 78782

I'm not convinced Graham ever advocated buying and selling over short periods outside the realm of net-nets. The idea of buying companies at a discount to future earnings and selling them when the gap is closed is a contemporary distortion of Graham's approach. He actually spends far more time in both Security Analysis and Intelligent Investor talking about the buy-and-hold approach, especially for retail investors. Graham admits at one point that his partnership made far more money off 1 buy-and-hold investment than all its other transactions COMBINED. That investment, of course, being GEICO - I think that worked out to be a 100 to 500-bagger from their purchase price. Graham held that stock personally for many decades, even through the meltdown in the 1970s when Buffett bought it for Berkshire. It just depends on whether you are investing to beat the S&P500 by a few points (as Graham's partnership did) or whether you are trying to make real money. Most of us have far better things to do with our time than beat the S&P500 by 2 points a year. Anyway, it does not take a rocket scientist to beat the S&P500 - all you have to do is dollar cost average into it when the SPE is <20 and build up cash when it is above that. Why bother picking stocks for a couple extra percentage points? For those of you who read Forbes, there was a great article in the February edition about Herbert Wertheim, an optometrist who started investing the cash from his small business in the 1970s in industrial and technology companies. His net worth is now about 2B - incuding 100-200M positions in Microsoft and Apple purchased at their IPOs. One of his core rules - (almost) never sell. Ironically, Wertheim didn't know a thing about value investing. He is very much of the Fisher mould. It sounds so simple, and yet most of the people on this board would say you should have sold Microsoft at 50-60 times earnings in 2000, or whatever. One of the lessons I've learned in my financial life - when learning from others, weight their views by their net worth.