Mike Schimek wrote:
Who cares about what the market is doing.
My guess would be just about every body that bought stock in the last couple of years.
You know I didn't mean it in that context oO
If you buy good securities of good companies at a good price, and the market doesn't reflect that value, just sit around and wait. If you chose your securities right eventually it will pay off (IMO), particularly at these prices.
Sounds good in theory, just like Warren Buffet. Problem is that Warren has the where with all to actually have his own people look at the books and appraise the business. How do we as investors determine what are the good companies? Even good companies suffer in bad times.
Do the same thing he does. It's a lot more work to slog through years of company reports and other things, but personally I find that doing so gives me a lot more confidence than I would have basing investment decisions on things like 30 day moving average charts.
If you want to "cheat" because of time constraints or because you cannot comfortably fully understand all aspects of financial statements, you can piggy back along guys like Warren and watch what they buy and consider doing the same thing. He's been buying Conoco Phillips, recently in the 70-80 range, right now its low 50s. When he buys its because he sees a lot of potential for a company 10 years down the road, so he's done all your research for you (if you can still buy at prices he was willing to buy at).
Note; Warren is 100% equities right now, in his personal portfolio.
One other problem that occurs when companies become too good a value is that other companies take them over. If it happens to be an all cash deal, we small investors have no choice but to take the cash. you can end up selling at a loss whether you want to or not.
Yeah, but if you can jump in early you do well. Was analyzing Hudbay last night because they have 900 mil in net assets vs a market cap of 500 mil, so this morning you could buy this company for about 60% of the price of the pure cash on its balance sheet, valuing its billions of dollars of property plant and equipment at zero.
I didn't move on this one, didn't have any free cash on hand and am unwilling to sell my current positions or buy more on margin.
I'm 100% equities and any money I have coming in right now goes straight into more equities. I'm not leveraged like I used to be (pre May of this year) and won't re-leverage ever again, but all my bucks are going into equities.
Nothing wrong with that. I'm curious as to when you plan to sell?
If you do your own analysis of companies (which takes a lot of work and some accounting background to understand the financial statements fully, with emphasis on the fully part) then you have an idea of what company X is worth to you. If the market is above X, then you sell.
IMO If you do not do your own analysis, then you cannot have a clear idea of what you feel a company is worth to you, and therefore you cannot have a clear idea of when you think it is fully valued in the market and should be sold.
IMO The more extensive your analysis, the more confident you will feel in your conclusions valuing the company you bought.
Research until your head hurts then scream Banzai!!! and charge fearlessly to victory or death!