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

To: Lance Bredvold who wrote (65869)	12/30/2020 4:56:19 PM
From: Lance Bredvold	2 Recommendations Recommended By bruwin petal Read Replies (1) \| Respond to of 78958

And a little more; I have noticed more and more emphasis on price to sales and price to future earnings--ie placing guesses upon guesses and obfuscating margins in order to justify whatever price the investor wants to pay. That has happened at frothy times as long as I've been around--like the nifty 50 of the late 60's. I warned myself that when I next saw people replacing PE with P/future guessed earnings to stay away. Nor have I liked cash flow as a means of justifying price. But a lot of this is that when I did study investing in the 60's I learned what to watch out for on the income statement and balance sheet so that I could make a more reasonable evaluation of P/E validity. P/E is what I like best for valuation but modify it for distortions.

To: Lance Bredvold who wrote (65869)	12/30/2020 5:30:15 PM
From: petal	Respond to of 78958

I think you're right. Everytime I go to the VI thread, I am, for some reason, automatically directed to a post from the autumn of 1999. It says: "Interesting article concerning "new" methods of calculating earnings that many companies are now using." (Then it links to a Business Week article that seems to have been lost in cyber space.) So that's a constant reminder to me. The quotation marks are of course a reference to that similar methods were used in the 1920's. They always seem to pop up, like clockwork, emerging from under ground during times of irrational exuberance. Your point 2) is the reason I exclusively look at tangible book value. Intangibles means nothing to me! :-) low interest rates which make income stocks the only place I can go with my funds. Agreed. Doesn't make a downturn/crash impossible though! The market (i.e. its participants – at least part of them, anyway) know how overvalued it is. Good ol' Mr. Market is manic right now, but can easily and quickly flip into a dangerously depressed state. Ackman's reasoning here seems to me common sensical in all the good ways. (https://www.youtube.com/watch?v=hqyJYVb-6L8&ab_channel=FinancialTimes)