Wednesday, 11 December 2013

The LONGER a stock remains seriously UNDERVALUED and the LONGER they DONT' RETURN TO NORMAL VALUE, the BETTER it is for the investor

A Margin of Safety BOOSTS Returns Rather than Just Providing Protection

The longer the stock remains undervalued, the better it is for shareholders, because their reinvested dividends, or their new purchases, or management’s share buybacks, continue to accumulate undervalued shares.  Thumbs Up Thumbs Up Thumbs Up

It actually becomes a demonstrably negative scenario for a long term investor when their stocks go up above fair value.
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That’s how Buffett made 30-50% returns in his early days. 

He wasn’t investing in companies that were growing earnings by 30-50% per year; he was investing in companies that were seriously undervalued.

Eventually, those stocks will return to normal values, and the longer they don’t, the better it is for the investor.  Thumbs Up Thumbs Up Thumbs Up

A most important point.
As a value investor, you should be happy for the stock market to be down.
It is only then, you can find the bargains you wish.
As you will be a net investor in stocks for the future and for the long term, you should welcome a down market, so that you can buy stocks at bargain prices.
Yet, in many forums, everyone is cheering for the prices of stocks to rise. 

1 comment:

messi said...

bullbear, is this a reminder to urself? :D
whats ur view on property sector?