tag:blogger.com,1999:blog-34104702.post4676550760410723842..comments2023-10-31T03:00:09.987-07:00Comments on Intelligent Investing: Profile of a superinvestor - Mohnish PabraiBerkshirehttp://www.blogger.com/profile/02415080722037608944noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-34104702.post-59047879910163402752007-07-27T23:36:00.000-07:002007-07-27T23:36:00.000-07:00Hi Fishmen,Thank for dropping by. I wouldn't mind ...Hi Fishmen,<BR/><BR/>Thank for dropping by. I wouldn't mind sharing my valuation process but it is very difficult to write every thing on this reply. In fact, my method of valuation can be taken as a whole from each and every article that I had wrote so far on this blog. <BR/><BR/>What is important is one must have a strong conviction and belief on the system that he or she is tagging along without being distracted by some other systems along the way that try to call out to you and provide you a chance of succeeding as well but in a different manner that you couldn't understand as well you have understood the current one you are following.<BR/><BR/>Personally, I think everyone knows how to differentiate being value and price and the basic mathematics of calculating. Investing besides identifying a good business with a sustainable model and calculating its value, there lies another yet more important metrics, the participant's emotional and mental stability to ignore the crowd and trust your own judgement.<BR/><BR/>Everyone knows Coca Cola or Pepsi is a fabulous product with an almost indestructable product. You can also easily put a decent value to it, if it goes to certain price that meets your value, you buy, if not you don't. Ok, but in investing, for example, if Coke is priced at 40 times its earnings and trading at $100 today. And you have calculated it to be worth only 20 times earnings and would only buy at $50. Would you then buy if it really drops to $50 within 2 months? The market may view Coke to be extremely volatile and risk because its beta risk has increased since it plunged from $100 to $50. <BR/><BR/>If you can overcome your emotional state by ignoring your net-worth that will almost certainly varies from day to day, and based your judgement on what you calculated as good value, then you are in the right game. <BR/><BR/>One advice which I find very useful is "Never let yourself go to the game. Let the game comes to you."<BR/><BR/>As I am writing, I still have lots to learn which is fun. <BR/><BR/>And in investing, analysing stocks and buying stock are most fun. When conditions are right, when companies with the good economics and management which sells below intrinsic business value will provide grand-slam home runs.<BR/><BR/>Fear and greed are as unpredictable as it is. As it is today and last month, who is to say that this month investors will be so fearful on the potential credit crunch that they worry about? In investing, you buy a stock regardless of the macro-economics of the world, if you can identify a great business at a great price. No great investor will try to time the arrival and departure of either the fear or the greed. Simply, when people are fearful, you should be greedy or v.v.Berkshirehttps://www.blogger.com/profile/02415080722037608944noreply@blogger.comtag:blogger.com,1999:blog-34104702.post-58396169204970169172007-07-23T07:37:00.000-07:002007-07-23T07:37:00.000-07:00Hi Bershire'So why listen to Mr. Pabrai, when you ...Hi Bershire<BR/><BR/>'So why listen to Mr. Pabrai, when you have the works of Benjamin Graham and Warren Buffett? Well, Mr. Graham died in 1976, so the focus must, to an extent, switch to his disciples.'<BR/><BR/>I feel that your last paragraph is more false than true. Every value investor is different in their own light, even though they may practice the idea of buying below intrinsic value.<BR/><BR/>Monish Prabai, through studying Beffett and Graham and his personal experience, comes up with high uncertainty, low risk and good profit approach. <BR/><BR/>Marty Whitman, through his academic background and study of graham, comes up with his unique buying companies with strong balance sheet. <BR/><BR/>Klarman, again, prefer to seek more certain gains through bankruptcy investing and debt recovery investing etc. <BR/><BR/>There are many aproaches to value investing. Graham and Buffett stuff is not the everything one can find in the field of value investing.ThinkNotLefthttps://www.blogger.com/profile/12923865962137056109noreply@blogger.comtag:blogger.com,1999:blog-34104702.post-53210973342201091232007-07-23T05:51:00.000-07:002007-07-23T05:51:00.000-07:00Hi Bershire, it's great to read your post again!ve...Hi Bershire, it's great to read your post again!<BR/><BR/>very thoughtful post. you must have spent a lot of time doing research! <BR/><BR/>In many ways I've "evolved" as I read more blogs and more books on value investing. For example I no longer pay much attention to the articles in "The Edge" that tries to forecast too much into the future. <BR/><BR/>But now as I try to start on value investing in stocks itself, I'm stumped as to how to go about doing it! <BR/><BR/>pershaps if you don't mind, you can share with us your valuation process? I know for me that'll be most beneficial!sm@ll.fryhttps://www.blogger.com/profile/03751757859835343020noreply@blogger.com