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

To: James Clarke who wrote (6561)	4/3/1999 9:33:00 AM
From: jeffbas	Read Replies (3) \| Respond to of 78652

Unfortunately, this is relevant: Message 8552396

To: James Clarke who wrote (6561)	4/3/1999 11:20:00 AM
From: Michael Burry	Respond to of 78652

Actually I don't think "everybody" is. I'm certainly not, and most of the others here on this particular thread are not. I think most of us are being critical of the approach. I posted the link because I think someone here asked for it, not because I believe it.

To: James Clarke who wrote (6561)	4/3/1999 11:36:00 AM
From: Paul Senior	Read Replies (2) \| Respond to of 78652

Jim Clarke: I'll take the other side of many of the points in your last post. My summary response is: I'm looking for methods that work that are fact-based, and I don't see that in your post. Just a few points: 1. "If you don't understand the business, no formula is going to save you". Some indication to me that diversified buying of large cap, dominant businesses, selling out of favor (low pe, low psr) is a formulaic method that works (ref: Dreman, Graham) 2. "Again there is no substitute for hard work". I would like to believe that someone, or a team of people, who spend 8-12 hours every day looking for stock bargains and stock profits-- those people would perform better than a "casual" investor. And I KNOW those pros want to believe that too. After all, it seems that we are told or maybe we see, that in every (other) endeavor in life, the harder one works, the more success one achieves. But there's just no proof that this is so in the stock market. Either on an individual basis or group basis. (Index funds continue to beat many mutual funds). I believe this is because success is a function of how well the investment performs, not how much or how hard the investor works. My opinion is that intelligent/hard working people who have been successful in every other thing they've tackled, just assume that they will be "successful" (by which I mean, have better results than less intelligent, less hard working people) in the stock market too. I think it's an unproven assumption. There's no evidence that I see that this is so in general. 3. Regarding "financial skill and experience". Back in '74 Graham wrote (p. xvi), "Even the majority of the investment funds, with all their experienced personnel, have not performed so well over the years as has the general market." Just exactly how much is experience and financial skill correlated to investment success then? There's no evidence that for the average person, spending time going over 10-k's in order to make successful investments is a time or cost-effective activity. 4. "If I've crunched numbers...sat down with management...I can be pretty confident". Yes, to me, that's the best argument for doing a lot of research and work-- to give confidence to hang in when things, especially extraneous, shake one's nerves. But again not necessarily a method or the best method or only method that works for instilling confidence for the average investor. Or not for pros too maybe--g-: Even in your own posts here, where you've stated you've just gone ahead and sold half of your positions, or done all the work on some stock for your business, but didn't gain any confidence to buy the stock for yourself. Well, those are just my opinions.... Paul