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

To: Walter in HK who wrote (6238)	3/7/1999 10:38:00 PM
From: P.Prazeres	Respond to of 78476

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To: Walter in HK who wrote (6238)	3/7/1999 11:11:00 PM
From: jeffbas	Respond to of 78476

You inspired me to repeat some observations on stock-picking that I believe many on this thread would agree with: Number one the market is NOT efficient. Number two the Street is not willing to look beyond its nose at companies currently doing poorly, but with more interesting longer term fundamentals. Finally the Street has a distinct preference for larger, more liquid companies for reasons that have more to do with liquidity than with advantages that larger companies do have. Therefore, I believe the way to make good money on a risk-adjusted basis is to take advantage of market preferences which are not relevant to the actual investment merits of a company -- by buying smaller companies or larger companies that are currently in a down cycle, like a NH. This has not worked recently, but I believe is still a sound strategy for the long term.

To: Walter in HK who wrote (6238)	3/8/1999 12:18:00 AM
From: Paul Senior	Read Replies (3) \| Respond to of 78476

Hello Walter in HK. Well, we again come down to the likelihood that there are many definitions of 'value investing'. Any or all of which might be effective depending on the practitioner. I look at value investing from a Ben Graham perspective, I think. This would be a method that IMO, focuses on safety of principle and gaining an adequate return. Unlike Weitz's, it does not test for honesty of management or attempt to determine "franchise" value or other intangibles. From what I garner rereading your quoted Weitz material, Weitz seeks capital gain, primarily from a few investments where he/his analysts have detailed knowledge of the businesses. In Graham's writings IMO, and with my investment approach certainly, there's more of an emphasis on diversification rather than emphasizing detailed business knowledge and thus holding fewer issues. Anyone looking at the Weitz stocks I mentioned will see they are not houshold names -- not in any households I'm familiar with anyway -g-. To have come across such companies in Oct. of '98 - anyone buying them had to have some very good insight and knowledge of their business and their business prospects. Or spend the time getting that knowledge. There were just so many other statistically-and-obviously cheap companies that value investors could have bought. These Weitz companies didn't and don't look like the value companies I am looking for. But... if they are the "value" type companies you are seeking, they might be winners for you. As far as what value type companies people on this thread are looking for, I speak only for myself. May I suggest though that you also check out the "Buffettology" thread here on SI? It was created in recognition of the difference between the Buffett style and the Graham style. Regards, Paul Senior ps: If I might politely inquire, do you have any HK stocks that you like at their present prices? I'd be interested in ones that would be listed on our NYSE or NASDQ.