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

To: Elroy who wrote (74311)	11/17/2023 4:52:45 PM
From: Paul Senior	3 Recommendations Recommended By Elroy Sean Collett Spekulatius Respond to of 78705

GRVY. Yes, as I've said, I've held it two years, did not make a profit, and as I sold after two years. I use Graham's suggestion for value stocks: Sell after two years if stock doesn't work out. Ok, could be said that GRVY is growth stock, growing internally, value being created, just not seen reflected in stock price. Therefore using Graham's suggested holding period for a growth stock here is incorrect here. Back otoh, as I say, I like to estimate how long I might hold a stock beforehand, assuming the business/stock will work out as hoped for. (no unexpected giant good news or terrible adverse news to force a reconsideration). GRVY, already a strange animal when I looked at it. Stock should already have been higher. Complexity for me in that I know little about Korean stocks/financial reporting, the parent company, or the potential of the games. My idea was to buy some, hold for two years, If in that time the stock did start to show gains based on the good sales/earnings, I'd add more. But it was two years of some volatility but no real stock gain from my buy in, so I gave up and moved on.

To: Elroy who wrote (74311)	11/17/2023 7:08:51 PM
From: Spekulatius	3 Recommendations Recommended By E_K_S Lance Bredvold Sean Collett Read Replies (1) \| Respond to of 78705

On GRVY - so you have no idea why it is so cheap, but I have: 1) They hoard cash and don’t do anything with it. They don’t pay a dividend or do buybacks. So it’s just like a Japanese stock which often hoard cash in excess of the market cap. It is as if the money isn’t there. If they change capital allocation, the stock will go up, if they don’t, the cash really doesn’t matter and in my opinion subtracting it from the valuation and using EV is questionable. I have owned stocks like this and they almost always underperform. Management can do this for a long time, maybe longer than a decade. Is your timeframe that long ? Most will give up like Paul did after a couple of years with nothing to show for.