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

To: Paul Senior who wrote (66679)	2/25/2021 8:15:22 PM
From: Madharry	Read Replies (1) \| Respond to of 78774

Well perhaps if you are charlie munger and can pick up the phone and talk to the ceo whenever you want and anyone else in the company. that might work. for must of us.i dont think so. but i did spend an hour or so listening to the conference call on Starwood and I highly recommend it. Very satisfied with the management there kind of funny that i recall the brief discussion about the appropriate entry price $10.5 or $9.75 we had in March and now its back in the twenties.

To: Paul Senior who wrote (66679)	2/25/2021 9:05:28 PM
From: Elroy	1 Recommendation Recommended By Sisyphus Read Replies (1) \| Respond to of 78774

If you own 100 stocks in varied industries, what’s the reason to own them rather than an S&P 500 index fund? I like the idea of putting XX% of your investments into an index fund, and with the remainder buying five stocks. That makes sense to me. The XX% can be your level of comfort in diversification, and the five stocks your skilled investing. You could then compare the two baskets, and adjust the XX% accordingly. 80% to 90% of my money is in SIMO. I’m an investing idiot!

To: Paul Senior who wrote (66679)	2/26/2021 4:57:50 AM
From: Ditchdigger	Respond to of 78774

OT <Maybe a few others.> I thought Buffett was also one of the "others". (of which I am not) “Keep all your eggs in one basket, but watch that basket closely.” “Diversification is a protection against ignorance. It makes very little sense for those who know what they’re doing.”

To: Paul Senior who wrote (66679)	2/26/2021 8:49:11 AM
From: bruwin	Read Replies (1) \| Respond to of 78774

“The only* investors who shouldn't diversify are those who are right 100% of the time ..... Maybe a few others."* Well, not even Charlie Munger's business partner of several decades, Warren Buffett, would claim that he's "right 100% of the time". HOWEVER, Buffett is the 7th RICHEST MAN in the world with wealth created solely from his stock market investments and purchase of companies. So it seems that he must know what he's doing "in that department". So if one had to follow his company analysis strategy then it's less likely that one may need to invest in the "100 stocks" aspect that Charlie Munger refers to ..... Buffet's current stock portfolio has 47 companies in it with ~50% (24 no.) are less than 0.5% of that portfolio. So for someone who's portfolio is worth about $270 BILLION, I would not have thought that's a large number of stocks to invest in, bearing in mind that with such a large amount of investing capital he will face "constraints" such as the number of shares available, etc... . Like Munger, Buffett encourages smaller investors to invest in, say, 5 to 10 good companies and put more of your investing capital in them. "Why", he asks, "put money into your 20th best choice rather than in your top 5 or 10 ?" (See Chap.8, "How Buffett Does It" by James Pardoe). Needless to say, when the monitored financial performance of those companies start to move "in the wrong direction" that would be a time to sell and buy something else. And, IMO and experience, if one bases one's stock choices on Buffett's criteria, and there is a general fall off in the market as a whole, and the reason(s) for that fall off were not part of one's stock's "business model", i.e. "Subprime Mortgage Crisis", "COVID1-19 Discovery", etc, then it is those "Buffett-type" stocks that are usually the ones to recover early on because they are then perceived to be "cheap" in that declined market ... e.g. AMAT, TXN, DIS, UNP, TER, etc....