The decision to sell a stock is, in many ways, trickier than the decision to buy. My own observation is that investors in common stocks should never be conditioned to sell outperformers. There is a time to fold ‘em. But its not simply because their price has outperformed the market or some benchmark.
We think the very term ‘value investing’ is redundant.
Our asset allocation has not changed in twenty-three years. It has been 100% allocated to common stocks. Prior to that, that is prior to the fall of 2002, we had been 100% in two-year government bonds for five years.
A high ratio of price to book value, a high price-earnings ratio, and a low dividend yield – are in no way inconsistent with a ‘value’ purchase.
And if a person sets out to make profits from security purchases and sales, he is embarking on a business venture of his own, which must be run in accordance with accepted business principles if it is to have a chance of success.
A careful selection of a few investments (or a few types of investment) having regard to their cheapness in relation to their probable actual and potential intrinsic value over a period of years ahead and in relation to alternative investments at the time.
Distill the secrets of sound investment into three words
It is value investing pure and simple with a concentrated portfolio, but the companies must have really good growth prospects.
We think the very term ‘value investing’ is redundant. What is ‘investing’ if it is not the act of seeking value at least sufficient to justify the amount paid?
What a value investor’s concentrated portfolio looks like.
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