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

To: Terrapin who wrote (3677)	3/27/1998 3:17:00 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78666

John Kolb: What's so straightforward about calculating present value to make portolio allocation decisions? It's getting more and more complicated the more we discuss it. Now there are two general categories from which to choose - in addition to risk levels to consider, and tax consequences. You matrix and rank all this in a mathematical model in order to make decisions? I certainly don't operate this way. Where have you ever seen anyone on this thread say about xx stock, "and this is its present value.. $aa." Do you have present value calculations for your stocks which you use for decision making? Unless of course I am being too analytical here. I just assume the words present value, mean some sort of discounting using actual numbers. If it's an intuitive something about the risk level is too high or I need 2 months more for a long term gain, well that's just not my interpretation of "doing" present values. What I am trying to say --stepping back to the start of this mess -g- is that I believe it is a mistake to swap out one undervalued stock for another stock which is presumably even more undervalued. Because no one can predict accurately when the values will be realized. For example, on this thread we have seen opinions where someone says, yes, xx is undervalued, but it doesn't fluctuate too much, so I'll sell it and buy yy , and maybe later I'll still have a chance to get xx again at its same price (after capturing a gain on yy). I believe that is suboptimizing performance not enhancing it. That's IMO. Paul