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

To: Honest Abe who wrote (3191)	2/10/1998 5:28:00 PM
From: Terrapin	Respond to of 78590

"I may have misunderstood the object of the group - Value Investing. I know the first post mentions Graham, but since Buffett is Graham's most famous disciple, is it wrong to bring his methods into the group?" This is an excellent point and, of course, I hope the answer is no. Nor is it wrong to bring in the strategies of other investors who are called value investors and there are many. A quick example would be Michael Price who seems to specialize in "turn-around" situations and was recently reported to have invested in nearly the entire HMO sector including Oxford Health Plans, causing (perhaps) a nice run-up in the share-price from which I am benefiting. Clearly, OXHP is not a Graham or Buffett stock and I readily agree with everything Michael Burry has posted about it and yet one could still be called a value investor for buying it. In fact, by going after such stocks Michael Price's funds (which I own P.F.{Pre-Franklin})have managed to weather strong downturns in the market. I hope the thread will comment on some of the other flavors of value investing. John

To: Honest Abe who wrote (3191)	2/10/1998 10:52:00 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78590

Honest Abe: Okay, I am wrong on a couple of things. First, my last post shouldn't have been addressed to you. I see that you have a model or models which you are using. I see that you are actually a long term investor (well 3 years- that's good enough for 99% of the people who define long term). What confused me - and maybe some others -is that you asked for a source for 10 year history that others would recommend. Well of course, we all (just a guess here) are familiar with and use VL. And so you are too - I see now. You would have to be. But from that first(?) post I (too) inferred that although you were in the investing business, you incongruously missed this source. Can't find Buffett stocks if you don't have or aren't aware of the basic tools. Munger once said (or maybe twice said -g-), "The Value line graphs, as short-form digests of reality, company by company, are the best things of their kind that America produces. The Value Line people have a sensationally good idea- put the data in exactly the form they put it in and to put it in graph form." That said, there is something else. As Barry Hall points out... don't use its recommendations. A lesson I seem to have to keep relearning over and over -g-. (Thanks Barry!) Based on what your strengths seem - this is not an issue for you. I would like to consider myself a superior investor. But I don't think the facts support it. I've been at it a while, and I'm nowhere near my first half-billion. My core belief is that if I want to succeed, I need to do the things that have been proven to be successful - and that are comfortable - reasonably - for my psyche. My opinion is, that value investing methods - in the latter Graham methodology (circa '75 and '76), are demonstrable and repeatable methods that an average, reasonable, dedicated person (not necessarily me -g-) can use to increase wealth. It works for anybody (maybe). Now Buffett. Buffett is not emulated for being a value investor . A value investor buys undervalued and sells fair or full valued. Yes Buffett does this too. But he has core holdings - never to sell. The people who follow, or try to follow, Buffett aren't looking at the value aspect. They seem to focus on the core, buy and forget - the big profit 8x-20x baggers. They are looking at this "other" wealth generating activity. Again: Buffett concentrates. Graham value players diversify. Again: Buffett's first and second rules: don't lose money. Graham value players (IMO): there will be losers. It's a statistical approach. Winners offset losers. Again: Buffett is unique- in spite of his folksy, down-home, comfortable ole Warren schtick. Nobody has come close to duplicating his success. Funds based on his work don't seem that great to me either. But with Graham value: methods that work (sometimes -g-)for his many "intelligent investors". Many disciples - they've become wealthy too. Finally - my opinion is - and I speak for myself - if you've got something you want to say regarding- Graham, Dodd, Buffett (Jimmy or Warren -g-), Van Waggoner (sigh),or whatever -- SAY IT man. I certainly want all that good information and skill and insight you've got. It's better for all of us to read and think, than to have missed an opportunity that could have helped one or more of us. And if you're a guy who can keep the same stocks for 3 years, you do have a lot to offer!