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

To: Axel Gunderson who wrote (4752)	8/21/1998 11:56:00 PM
From: Paul Senior	Read Replies (3) \| Respond to of 78596

I think you all should be much more thoughtful about your goals of trying to beat the market. It's mentioned here as some sort of desirable thing. I don't recall Dr. Graham ever reporting that his methods would enable either his conservative investor or his enterprising investor to beat the market. And there are several people (ref. Siegel) who say that it's not even necessary to beat the market to do really well. Most of you guys I think are young enough to let compound interest work in your favor. Let that happen. From what I read here you all are realistic--- so you don't expect the stock market to let you have a Ferrari and better class of woman (or man) and a total lifestyle change so easily. You won't get that quickly from value investing IMO. It takes time and patience. But it will happen if you will stick to your methods and let time work for you. Don't panic! You've all called it right IMO--we are in a bear market for value stocks, it seems to me too. But the companies we are invested in are real businesses, providing real products and services that people want, and at some point, we can expect some of these companies' stocks to 'adequately' reflect profits, assets, and future prospects. Stay diversified, think long term, and keep some powder dry!... JMO, Paul

To: Axel Gunderson who wrote (4752)	8/22/1998 2:36:00 AM
From: Michael Burry	Read Replies (1) \| Respond to of 78596

Axel, re: time frames, value investing is not synonymous with long term investing, and it is not incompatible with tax-loss selling and other maneuvers, IMO. Value in the Graham sense means buying undervalued and awaiting fair value. If you get to fair value in a few months, then take it - holding on longer only further enhances the return-depressing realization of value problem that your other stocks will experience. So in fact long term holding is the opposite of what we would like as buyers of undervalued shares. Value in the Buffett sense - which is what it sounds like you have done - is buying and holding, which depends on a particular art that he has perfected above everyone else and involves growth investing. The Graham method is much more accessible to most of us, and just by its nature, long holding periods for mediocre or cyclical businesses - the only true Graham values available the last few years - are counterproductive. So when the Graham type stocks fall 50% in a few months it really is significant. It makes a long-term investment out of something we would rather have been a short-term investment, and therefore depresses overall returns for years into the future. Mike