Long term value investing
- Thread starter Blue_Bull
- Start date
It always cracks me up when some people on this site, or elsewhere, try to sum up stocks or the stock market in a sentence or two. You get all these clueless traders on this site that think they know something that millions of smart people don't know. They think they are smarter than every other stock investor out there. If you dont heed to thier odd and simplistic principals, and don't invest according to how they say, you are of course a moron. Their logic screams in the face and contradicts many great investor's philosophies, but then again they think know what so many others don't.
Nitro is one of them (he says the stock market is a giant ponzi scheme). It appears "big D" is another one of these oracles who "get it," even all other people apparently don't get it. Oddly many of these theories involve dividends.
They fact that you say I am against Ben Graham in my thinking is not even laughable. Its rediculous. You mention the book security analysis in one of your posts. I seriously hope you haven't read it. Why? because that is a big ass book, that takes MANY hours to read, and if you read it and still believe what you believe, you just wasted A LOT of time.
The sad thing is there are so many Americans out there that don't know a thing about the stock market. I know a few of them, maybe your friends or family, will listen to you, and will forever believe that the only reason to own a stock is for its dividends. Not realizing that when you own a stock you are part owner in that company.
You say I don't know what intrinsic value means, but I do. You said that because you didn't have a better rebuttle to my the facts that I posted that refuted your dividend value theory.
I'm going to say this one more time, and never again to you.
Intrinsic value is basically a companies "true worth." Its what you believe the true value of a security is. Its IN THE EYE OF THE BEHOLDER. Warren Buffet talks all the time how he and his partner Charlie Munger nearly always come up with a different intrinsic value when calculating dcf analysis. Dividends are important but they are not the intrinsic value of a security. Over long periods of time nearly all stocks just track their earnings. Owning a share in a company means you are one of many owners of the company and have rights to all the assets, and all the future earnings, but you do not have a say in how those assets or future income are handled, unless you own a majority of the shares. If you bought a stock trading for less than tangible assets or net cash, then as long as the assets or cash never detiorate, you will make money. Either by the price returning to above tangible assets, or by liquidation of the company whereby the assets are sold and the proceeds are returned to owners (shareholders). That is a situation where a dividend is never paid and you make money. Ben Graham spoke of these often, and rarely do they pay a dividend. I think if Graham was still alive he would personally kick you square in the balls just for using him in explaining your theory.
There, thats stock market 101. That refutes your theory and all the other crazy theories. You cannot sum up the stock market in one sentence. "Dividends are the only value of a stock." Its just not that simple. Its a complex system and until you think rationally about it and understand it a little better, then I suggest you stick to short term trading and don't invest a dime.
Nitro is one of them (he says the stock market is a giant ponzi scheme). It appears "big D" is another one of these oracles who "get it," even all other people apparently don't get it. Oddly many of these theories involve dividends.
They fact that you say I am against Ben Graham in my thinking is not even laughable. Its rediculous. You mention the book security analysis in one of your posts. I seriously hope you haven't read it. Why? because that is a big ass book, that takes MANY hours to read, and if you read it and still believe what you believe, you just wasted A LOT of time.
The sad thing is there are so many Americans out there that don't know a thing about the stock market. I know a few of them, maybe your friends or family, will listen to you, and will forever believe that the only reason to own a stock is for its dividends. Not realizing that when you own a stock you are part owner in that company.
You say I don't know what intrinsic value means, but I do. You said that because you didn't have a better rebuttle to my the facts that I posted that refuted your dividend value theory.
I'm going to say this one more time, and never again to you.
Intrinsic value is basically a companies "true worth." Its what you believe the true value of a security is. Its IN THE EYE OF THE BEHOLDER. Warren Buffet talks all the time how he and his partner Charlie Munger nearly always come up with a different intrinsic value when calculating dcf analysis. Dividends are important but they are not the intrinsic value of a security. Over long periods of time nearly all stocks just track their earnings. Owning a share in a company means you are one of many owners of the company and have rights to all the assets, and all the future earnings, but you do not have a say in how those assets or future income are handled, unless you own a majority of the shares. If you bought a stock trading for less than tangible assets or net cash, then as long as the assets or cash never detiorate, you will make money. Either by the price returning to above tangible assets, or by liquidation of the company whereby the assets are sold and the proceeds are returned to owners (shareholders). That is a situation where a dividend is never paid and you make money. Ben Graham spoke of these often, and rarely do they pay a dividend. I think if Graham was still alive he would personally kick you square in the balls just for using him in explaining your theory.
There, thats stock market 101. That refutes your theory and all the other crazy theories. You cannot sum up the stock market in one sentence. "Dividends are the only value of a stock." Its just not that simple. Its a complex system and until you think rationally about it and understand it a little better, then I suggest you stick to short term trading and don't invest a dime.
Uh, no, it's not. Did you even bother to read the provided link? Let me quote, to save you the oh so difficult click:
Frankly, this is a stupid discussion. It's not even grade school level stuff. The INTELLIGENT questions about that definition would be
a) how do you predict future disbursements?
and
b) at what rate should you discount them?
All of value investing hides in those two questions. But instead you're posting crap that boils down to "It's all subjective, man. I like Apple!"
I have a question about this: The market is always pricing in the expected earnings, not the past earnings, right?
So, even if you can accurately predict the next couple of quarters of earnings, the stock will always be valued at what the market EXPECTS the FUTURE earnings to be.
The problem I have is that by the time that your earnings prediction becomes validated, the market will already be looking to the next earnings period.
That's just something that been boggling my mind for a while, I am curious if someone can help me reconcile that notion...
The difference I've been getting at is the difference between earnings and disbursements/dividends. If the two were the same value investing would be a very different ball game.
Regardless of which you're looking at, the market tries to price in the future rather than the past. However, it's not very efficient at it. Classic examples of this inefficiency can be found in the O'Neil books, where he shows how a stock's earnings and earnings growth ramped up BEFORE the price moved much, thereby creating his buy signal.
Now O'Neil's methodology is trading rather than value investing since he gets paid by trying to sell at the top of the run-up, but he illustrates the point that the market isn't really that efficient at pricing in the future. A value investor could do the same thing with dividends that O'Neil did with earnings.
WOW! I didn't think you could sound more stupid.
You proved me wrong.
1. "In finance, intrinsic value refers to the value of a security which is intrinsic to or contained in the security itself."
A fancy way of saying, a securities TRUE WORTH.
" It is ordinarily calculated by summing the future income generated by the asset, and discounting it to the present value."
This is how you calculate intrinsic value, it is not the definition of. I don't know why you put it in bold, but the bottom line is intrinsic value of a security is that securities true worth!
2. Its a stupid grade school discussion because you made it one.
A) That is a question you ask when you want to calculate intrinsic value but is not the definition.
b) Again all about calculating.
3. Wrong again, value investing boils down to ONE question. What is this securities intrinsic value, or TRUE WORTH? Those two random questions you posted deal with the process of coming up with intrinsic value. You could ask 20 more questions similiar to those two you posted.
If intrinsic value is well below the current price, then buy it. Thats value investing.
I'm not the one posting crap. I am trying to make you realize the crap that your posting is incorrect.
Also, I do not like apple and never said I did, and value investing is subjective. Like I said before, Buffet and Munger have never came up with the same intrinsic value for a stock, NEVER.
Some advice for you, don't act like an omniscient expert on a subject when you do not even know the definition of it when that definition is reworded.
Quote from The Big D:
It's you vs. a variety of well documented and reliable sources including the "inventor" of value investing, Ben Graham.
Somehow, I think they're right and you're wrong
Right. I see your logic. I understand your mindset know. Your running out of things to say in defense of your lack of knowledge and incorrect theories. Might as well just say I am going against Ben Graham, because he is the father of value and because you cannot think of any other lies or nonsense. Then say he is right and I'm wrong even though I am just saying what Ben Graham used to say. Oh, and then put a little smiley face on the end to prove your still a d-bag.
I don't need to defend "my" theories because they're not mine - they're Graham's, quoted to you more or less verbatim from multiple sources. If you don't like them, that's really your problem.
I happen to think he's basically right, but he wrote in an era where governance wasn't the problem that it's been for the last 20 or so years, so his perspective is a little outdated. Still, he's light years ahead of your nonsensical subjectivism.
I happen to think he's basically right, but he wrote in an era where governance wasn't the problem that it's been for the last 20 or so years, so his perspective is a little outdated. Still, he's light years ahead of your nonsensical subjectivism.
Congratulations that's the best post I've seen you make.