Price And Value – Waiting For A Bargain

July 19, 2012 12 Comments

“All things are sold at their highest when they are new in the market. If you have the patience to wait, you can see their true value later.”

You can read a nice post on the subject of finding bargains here:http://propertysoul.com/2012/07/19/getting-a-good-bargain/ Remember this applies to all investments too not just consumer goods.

Filed under Entrepreneurship, Paper Assets, Tool Kit Tagged with bargain hunting, bargains, postaday, price, sale, smart buying, smart shopping, value

Learning From Sir John Templeton

June 24, 2011 3 Comments

wealthymatters.com Sir John Templeton (November 29, 1912 – July 8, 2008) was a legendary investor and a pioneer of global investing. He took value investing to an extreme, picking industries and companies he believed to be at rock bottom, or as he called it “points of maximum pessimism.”He bought when there was blood on the streets. For example,when investors fled the New York market after the Second World War was declared, Templeton borrowed $10,000 to scoop up stocks priced at less than a dollar, often in companies that were near bankruptcy. In four years, he sold the stock, paid off the debt and pocketed $40,000—the seed money for Templeton Growth Fund, a market beater for many years.

Templeton did not care where a company was located. If it was selling below what he considered to be its asset value, and if it was in an industry or nation that was “out of favor,” he was interested in it. He was among the first to invest in postwar-Japan and among the first to sell out of Japan in the mid-1980s. He was one of the very few who invested in Peru when the communist Shining Path was running rampant, and by doing so, he reaped a fortune for his investors. Read more of this post

Filed under Paper Assets, Theory Tagged with asset value, bankruptcy, bargain hunting, blue chip stocks, calculated risk, clicks, common stocks, contrarian, deep value investor, dot-com bubble, Dow Jones Industrials, equities, eyeballs, Fiscal Deficit, Franklin Group, global investing, government bonds, Great Depression, high savings rate, internet stocks, investing in Japan, market neutral hedge funds, Money magazine, New York Stock Exchange, out of favour, over geared, pessimism, points of maximum pessimism, postaday2011, RandomBlog2011, shares, Sir John Templeton, speculation, Templeton Growth Fund, Trade Deficit, treasuries, value investing, value investor, World War II

Confusing Uncertainity With Risk

March 4, 2011 Leave a comment

Here is an extract from the article ‘ Investors will miss out if they confuse uncertainity with risk ‘ by Whitney Tilson published in the Financial Times on 16 Feb 2008.I think confusing uncertainity with risk is precisely what happened pre-budget in India this year. And this confusion is something that happens to a greater or lesser extent every year before the budget.The same thing happens before the final decision is taken on any government policy. So if a stock investor remembers that there is a difference between uncertainity and risk he/she can sometimes buy shares cheap.Risk means the chance of a loss of capital. Uncertainty is the range of different outcomes. So a stock may have high uncertainty but may not be risky, if no one knows what will happen but the worst case scenario would not results in a huge loss.

“Dealing with uncertainty is always a key challenge for investors. But dealing with uncertainty doesn’t mean avoiding it – on the contrary, it is often fuzziness about a company’s future that creates the type of opportunity bargain-hunting investors cherish.Wall Street in the main hates uncertainty, which manifests itself in depressed share prices of companies whose prospects lack “visibility.” But where the market can err is in confusing uncertainty with risk. Just because a company’s future is highly uncertain doesn’t mean an investment in it is risky. In fact, some of the best potential investments are highly uncertain, but have little risk of permanent capital loss. As hedge-fund manager Mohnish Pabrai describes it in his book, The Dhandho Investor: “Heads, I win; tails, I don’t lose much.” Read more of this post