Value investing - your take on this?

[sangmen]

So, I am reading Benjamin Graham's famous book The Intelligent Investor, which was referred to as the "best book of value investing" by Warren Buffett. I just wanted to know how effective is this method even today in this world. I love the way how Graham differentiates the investor and speculator in his book and how one should invest based on the underlying value of the stock. I just wanted some more ideas from you guys about value investing

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[JustAskBenWhy]

So, I am reading Benjamin Graham's famous book The Intelligent Investor, which was referred to as the "best book of value investing" by Warren Buffett. I just wanted to know how effective is this method even today in this world. I love the way how Graham differentiates the investor and speculator in his book and how one should invest based on the underlying value of the stock. I just wanted some more ideas from you guys about value investing

The concepts are very viable in today's world and in all investment classes. Ultimately, wealth is created on the balance sheet, and there are only 2 ways for the balance sheet to grow: either you buy assets below intrinsic value and allow the marketplace to catch up, or you buy at today's intrinsic value but have ways to improve upon that value.

When we are talking about RE, both can work. However, in stocks, unless you are an activist investor with pockets deep enough to buy controlling positions and affect change at the structural level, all you can do is underwrite what you think the intrinsic value should be in a rational marketplace, and then wait for the marketplace to correct itself higher. The thinking here is that if you think that based on fundamentals the value is X, but the stock is trading at X - y, then eventually other participants in the marketplace will catch on and adjust their pricing from X - y to X, in which case, if you bought at X - y you'll make money. Such is the theory...

 

[Almond]

Graham himself ended up saying that the time it takes to find value stocks doesn't bring enough returns anymore. Since trading robots and automated systems now perform so much research and the market is manipulated by robots. it is becoming a lot harder to find the undervalued stocks. But his students keep using value investment, Fidelity Magellan and Berkshire Hathaway still deliver great returns, so I think Graham was wrong. If you look at the emerging markets, there are a lot of stocks with great P/E, the problem with foreign markets is political and economic instability and our lack of knowledge.

 

[GMSI7D]

So, I am reading Benjamin Graham's famous book The Intelligent Investor, which was referred to as the "best book of value investing" by Warren Buffett. I just wanted to know how effective is this method even today in this world. I love the way how Graham differentiates the investor and speculator in his book and how one should invest based on the underlying value of the stock. I just wanted some more ideas from you guys about value investing

what is value anyway ?


value depends on conditions.
things are not valuable in themselves in a fixed manner but according to situations.



money has no value at all in the real world which is nature

in case of a global crisis real value are concrete things

not all the financial scams that are called " investment "

View: https://www.youtube.com/watch?v=TCFm8r6_1bs



since people don't understand .let me explain





let's say you are lost in the wood 200 miles away from civilisation






in your pocket, you have 2 things:



a 100 dollar bill





and a box of matches






at this very moment, what is value for you ? the bill or the matches ?



since you are an intelligent being, your answer is 100 % " the matches are the most valuable things" while they cost nothing



why ?


because the matches save your life which is worth million from your point of view



so the matches are worth millions at the very moment

because they save your life witch is worth millions from your point of view








while the bill is just a piece of paper to help start the fire.








real value are practical things away from bank and all these scam.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.

[Leoto]

what is value anyway ?
value depends on conditions.
things are not valuable in themselves in a fixed manner but according to situations.

real value are practical things away from bank and all these scam.

Everything you say is 100% correct and I agree with it all, but your post doesn't seem to offer anything of value (no pun intended) relative to the original poster's question, which was in regards to value investing in the financial markets, rather than in some post-apocalyptic world after a global economic meltdown (which indeed we all need to prepare for as well).

 

[Leoto]

So, I am reading Benjamin Graham's famous book The Intelligent Investor, which was referred to as the "best book of value investing" by Warren Buffett. I just wanted to know how effective is this method even today in this world. I love the way how Graham differentiates the investor and speculator in his book and how one should invest based on the underlying value of the stock. I just wanted some more ideas from you guys about value investing

For me, value alone is never a good enough reason to invest in a stock. The upside potential from the difference between perceived intrinsic value versus market value is seldom large enough to justify placing the bet. Value discrepancy is more of just an added bonus that I look for when selecting income-generating stocks. If an income-generating stock's market value has a tendency over time to oscillate above and below it's perceived intrinsic value, one can use the value discrepancy as a means for timing entries (i.e., add to your position when intrinsic value > market value).

 

[Daniel Newton]

It works because it takes a lot of time to work. It works because it doesn't work all the time.

True value investors have time horizons of 3 years or more, and over that period they will outperform, but there will be periods where they under perform.

If a professional investor has a bad year, a lot of the money leaves. If a professional investor has 2 bad years, he may be out of business. That is why so many professionals are forced to chase short term results. That is why there is less competition for ideas with bad prospects in the short-term, but good prospects for long-term success.

The biggest challenge for a value investor, in my opinion, is finding capital that will stick with you even during periods of under performance, because they understand the philosophy and they trust in your capability and honesty.

 

Dislike ads? Remove them and support the forum: Subscribe to Fastlane Insiders.