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Phil Fisher - Common Stocks and Uncommon Profits
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Aguytrying
#11 Posted : Thursday, April 04, 2013 3:39:01 PM
Rank: Elder

Joined: 7/11/2010
Posts: 5,040
VituVingiSana wrote:
Aguytrying wrote:
VituVingiSana wrote:
Why Warren Buffett is a billionaire! Just the first two are laden with wisdom.

1. "The reason why the growth stocks do so much better is that they seem to show gains in value in the hundreds of per cent each decade. In contrast, it is an unusual bargain that is as much as 50 per cent undervalued. The cumulative effect of this simple arithmetic should be obvious."

Think Equity vs HFCK over the past 5 years. I recall when HFCK was trading at a discount to BV while Equity was at a higher than average PER (financials) & P/B...

2. "If the job has been correctly done when a common stock is purchased, the time to sell it is -- almost never."

There may be reasons to sell but sometimes, just hold on if you can. Think City Trust which owns part of well-managed I&M Bank. Others include EABL & BAT. Solid well-run firms.


There's one big problem with number 1. And that's why its hard to pull off. While it may be not that difficult to identify an undervalued company, that is a good investment case- ie good management, history of growth, low debt etc.
It is very hard to predict/correctly judge how a company will perform into the future say ten years. A miscalculation of even a small percentage leads a big deviation over the years.

For this reason, few excellent investors are able to pull this off. (it helps if you have a controlling stake)
Hindsight is 20/20 & that's where WB excels. He has a say in the management [he does not manage but can choose/select his managers]


Very true the story of GEICO insurance and indeed many others come to mind.
One take home i get from most of the great investors is: management. If the management is brilliant you can seldom go wrong, if all the other factors are good.
The investor's chief problem - and even his worst enemy - is likely to be himself
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VituVingiSana
#12 Posted : Thursday, April 04, 2013 7:28:21 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,361
Location: Nairobi
@aguy - That's why I have stopped investing in firms where I am not sure about Management. It may be a HUGE bargain but a poor Management can decimate the 'discount' like a hot knife through butter!
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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the deal
#13 Posted : Thursday, April 04, 2013 8:23:03 PM
Rank: Elder

Joined: 9/25/2009
Posts: 4,534
Location: Windhoek/Nairobbery
There is only one reason why Buffet is a Billionaire.. he picks BOTTOMS...he is the master of picking BOTTOMS...weather its earnings, economy...share price etc...
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VituVingiSana
#14 Posted : Friday, April 05, 2013 1:34:50 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,361
Location: Nairobi
the deal wrote:
There is only one reason why Buffet is a Billionaire.. he picks BOTTOMS...he is the master of picking BOTTOMS...weather its earnings, economy...share price etc...
Not really. He picks good firms at REASONABLE prices. If they are cheap, then the better. And he is picky about Management.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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ProverB
#15 Posted : Friday, April 05, 2013 9:53:08 AM
Rank: Veteran

Joined: 3/12/2010
Posts: 1,199
Location: Eastlander
What thaaar........ &%$%^!!!!!!!!

Access AK (Absorutery bure Kabithaar)Kenya ilifika 9bob when??

...unless it's getting bought out..that's a monkey right there!!...faith in it is as misplaced as faith in KTN's Tujuane!!!!!
..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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Mukiri
#16 Posted : Friday, April 05, 2013 10:58:09 AM
Rank: Elder

Joined: 7/11/2012
Posts: 5,222
ProverB wrote:
What thaaar........ &%$%^!!!!!!!!

Access AK (Absorutery bure Kabithaar)Kenya ilifika 9bob when??

...unless it's getting bought out..that's a monkey right there!!...faith in it is as misplaced as faith in KTN's Tujuane!!!!!

Laughing out loudly One needs a strong stomach to manage the language in Wazua! Susan of South C might just have converted her love of Australian openings to the NSE.

Anyways be prepared for more shock as we go into the swearing in.

Proverbs 19:21
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VituVingiSana
#17 Posted : Friday, April 05, 2013 12:45:07 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,361
Location: Nairobi
Bids for AK at 9.25 & let's face it the move from 6 to 9 was awesome!
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Cde Monomotapa
#18 Posted : Sunday, April 07, 2013 1:42:03 PM
Rank: Chief

Joined: 1/13/2011
Posts: 5,964
AK too rich for my blood. #Pass
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