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

To: Elroy who wrote (71333)	10/16/2022 5:40:10 PM
From: petal	Read Replies (1) \| Respond to of 78774

Good discussion on time! If one is buying cigar butts though, i.e. decaying businesses, one has to have to think about time frame. The more of a growth investor you are (or "buy and hold investor" – to me, growth/GARP/buy and hold all seem to be basically the same concept, no?), the less you need to worry about time. As a sidenote, I find myself increasingly attracted to this latter type of investing, partly because I find "time arbitrage" to be the best edge one can have in these hyper-active, attention-deficient markets, and partly because it just seems easier to spot great businesses with reasonable prices than great stocks (i.e. stocks with great prices). It seems that you, Elroy, also have this inclination, as well as probably most on this board – and humans more generally too... Once one has fundamentally internalized the key aspect of an investment – that you're buying a piece of an actual business – it's just hard to buy subpar businesses, even if the price is great. And if one buys great co.'s at exceedingly reasonable prices, one doesn't have to worry about either time or nightsleep... -------------------- PS. I sometimes think about the irony that Ben Graham made most of his money not in cigar butts, but in a great company (GEICO). And I sometimes go back to a paragraph in Security Analysis, where BG argues against the "buying stocks of good businesses" strategy (i.e. the "quality strategy", as opposed to his own quantitative approach). Ironically, he mentions* three companies as examples of the "good stocks approach": Coca-Cola, Abbott Laboratories, and General Electric. As chance (or BG's skill at picking quality companies?) would have it, he would have made off at least as well by just buying these three co.'s and holding them for half a century, as he did with hard analytical work and hundreds/thousands of cigar butts. . * » If we look to current practice to discern what these standards are, we find little beyond the rather indefinite concept that ”a good stock is a good investment”. ’Good’ stocks are those of either (1) leading companies with satisfactory records, . . . or (2) any well-financed enterprise believed to have especially attractive prospects of increased future earnings. As of early 1940, we may cite Coca-Cola as an example of (1), Abbott Laboratories as an example of (2), and General Electric as an example of both. « Security Analysis (Second Edition, 1940)