Value Investing on the ASX

Only a couple of million to go!

Steve

 

I somehow dont think a quote war is going to be massively educational for anyone really.
For every quote someone has by a successful fundamental investor, you will find a quote exactly opposite by a just as successful proponent of technical analysis.
Besides, many of the Warren Buffett quotes going around are probably just as reliable as quotes of celebrities in woman's weekly magazine.

Everyone has their own biases, and at the end of the day if any of us concede our point of view it completely demolishes our confidence (and thus our ability) to implement our particular system.

GSJ: Let us know how your research into value investing goes, I would be interested to see what you think after some first-hand reading and how the ultimate test - money on the table - goes! (and whatever you do, ignore the people telling you not to use stops until you have enough capital behind you to actually buy a substantial share of the business! it is easy to say just hold on for the long term and trust your fundamentals, but 6 years you hold on now while your stock is worth bubcus counts for at least another 6 years on the retirement/financial freedom/whatever end)

 

I disagree.

The discussion had become too 'Warren Buffett centric', and the addition of some basic investing philosophies by an extremely successful Australian investor were quite pertinent.

Actually, the quotes were from Kerr Neilson.

Out of interest though, which quotes of Warren Buffet do you think cannot be attributed to him?

Yes and no...

Everyone does have their own biases and perceptions and we all make our decisions based on our version of 'reality'. Sometimes, even if we have made a bad decision, we can be so deeply entrenched in our beliefs that we will fight tooth and nail to prove it!

Having said that, taking on board alternative views that may have some merit should be seen as adding to our information base, thus allowing us to adjust our particular system and giving us more confidence.

Steve

 

Good example. An example like that clearly demonstrates how the average joe can use value investing principles to carve out their fortune, simply run a fund manager controlling a few hundred million dollar account that collects a % as a management fee when the fund underperforms, and a % + performance fee when the fund overperforms. Bill Gates is the most successful business person in history, but chances are his advice wouldnt be very useful if you were thinking of buying a corner deli.

None of them really, just thought it sounded like a good thing to say. I am sure all the quotes were taken directly from the vast number of educational books he has written. I am sure he doesnt use a computer as well.

no arguments here on that one!

 

I agree.

Ouch. Now that's a tad cynical.

I don't think you can discount his investment methodology as simply as this. The fact is, he was using his philosophy (very successfully) for decades before Platinum.

You seem to be suggesting that there is nothing to gain from evaluating the experiences and investment philosophies of some of the world's most successful investors. I personally feel there is. Yes, I am aware that they have progressed and are 'big fish', however, their basic tenets of investing which got them there in the first place are still highly relevant.

If we can't evaluate successful investors without them being discarded willy nilly, who can you learn from?

Cheers,

Steve

 

Most discussed threads of all time!

Hi there,

Just for interest (I've got a bit of time on my hands!), this is the 4th most replied to/discussed thread amongst all threads in Invested! The top 4 are:

1. Navra fund no longer an income fund
2. Navra performance on recent market drop
3. Platinum IPO
4. Value Investing on the ASX

GSJ

 

Well that makes me pretty happy I'm investing in property at the moment.

When it's

1. Where do I find cashflow postive property?
2. What is the next hot suburb?
3. 50% gain in 6 months is this sustainable?!?!
4. From 0 to 550 properties in 10 days

I would be looking seriously at index funds on the ASX

 

cool! how close to positive cashflow is your property?

 

haha that's funny

 

It's not surprising that there are different opinions on investing methodologies. Even the value investment exponents can't agree:

Clime Asset Management has Bunnings Warehouse Property Trust (BWP) as a large percentage of its value portfolio, and recently suggested it was great value in the Eureka Report (March 28 2007): "a property trust that has a wonderful track record and excellent future prospects."

But The Intelligent Investor has an 'avoid' recommendation (Issue 227, 21 Jun 2007): "Unfortunately, much of the increase is due to favourable, and likely unrepeatable, revaluations."

So how can you guys expect to agree?!

Disclaimer: I happen to agree with Clime; I own BWP.

 

If you read what Huntley's have to say on many companies they can't agree with themselves.

AMP

The Aspect model says AMP is strongly overvalued.

Recommendation: Accumulate

BHP

BHP is undervalued based on the Aspect model due to the strong near term earnings outlook.

Recommendation: Hold

RIO

RIO is undervalued based on the Aspect model due a high long term EPS growth rate.

Recommendation: Hold

CBA

According to the Aspect Model CBA is overvalued. Book value is small relative to the share price and the long-term growth rate used is only just double-digit.

Recommendation: Accumulate

and so it goes on......

 

Anyone read 'Masters of the Market'?

I just started reading this and it is a fascinating read.

GSJ

 

Just finished reading 'Masters of the Market'!

Great insight into fund managers who are largely fundamental/value investors.

Despite this common ground, they each have their own very particular styles/approaches/strategies for investing/stock-picking, that they have developed over years of experience.

They have each found a technique that works for them and then stuck to it and consistently applied it and have subsequently reaped the rewards from it.

Excellent read.

GSJ

 

If they are "Masters" why their performance is so poor ?? (some exceptions exist)

 

GSJ
I also recommend having a read of "market wizards" by jack schwagger. Contains success stories (on the very large scale) of people in varying markets and using varying strategies (TA, FA, a mix of the two, and gut feel). Doesnt get down to the nitty gritty of how decisions are made (like most books really) but it does give an interesting insight into the mindset and psychology involved.

 

"......insight into the mindset and psychology involved."

And that's....what THIS business is all about !!!

 

Um yeah! I think I'd prefer science and maths rather than psychology please

 

99 out of 100 gurus surveyed said that is a ridiculous comment (at least not until someone can come up with an investment strategy that does not involve humans on any level)

 

You have got to be kidding me. No doubt Enron, Bond Corp, HIH etc would have shown up as companies value investors would have looked at more closely. However, given the complexity of the financial reporting, I would be very surprised if value investors went in in a big way - and even if they did, it would have been after a large % fall after growth investors inflated the price.

Value investors as a whole also stayed well away from the dizzying P/E's being displayed by companies showing no profits whatsoever at the height of the tech boom - it wasn't value investors driving prices way beyond sane levels - just as it isn't value investors driving the Shanghai SE stocks to ridiculous prices.

 

The ones that aren't doing as well are saying that it is harder to find value in a bull market, and are holding more in cash because of this.

GSJ