Saturday 17 January 2009

REASONABLE PRICE PRINCIPLE

REASONABLE PRICE PRINCIPLE

It is never worth the value investor’s time or effort to forecast when tops and bottoms are reached.

If price is a fraction of value, value investors buy, knowing that there is a chance that the price will fall lower.

Over long periods of time the gap will narrow and often reverse.


Also read: 10 TENETS OF VALUE INVESTING

  1. MR. MARKET PRINCIPLE
  2. BUSINESS ANALYST PRINCIPLE
  3. REASONABLE PRICE PRINCIPLE
  4. PATSY PRINCIPLE
  5. CIRCLE OF COMPETENCE PRINCIPLE ****
  6. MOAT PRINCIPLE
  7. MARGIN OF SAFETY PRINCIPLE ****
  8. IN-LAW PRINCIPLE
  9. ELITISM PRINCIPLE
  10. OWNER PRINCIPLE

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