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昨日阅读1小时。 总阅读时间125小时
The business of value investing – Six essential elements to buying companies like Warren Buffett- Charlie Tian 2009
https://bbs.pinggu.org/thread-695143-1-1.html (Page 87-95)
Develop a Search Strategy: Ignore the media & Imitation Is the Sincerest Form of Flattery
阅读到的有价值的内容段落摘录
The quest for the “next great stock” has become the holy grail of investing. The truth is there are no great stocks, only great investments. By making your investment decisions based on business fundamentals can increase the likelihood of paying a sensible price for a share in a company. A great business does not necessarily imply a great stock investment. Google is a fantastic business that generates tremendous profits. However, if you were buying Google at $700 a share and paying 42 times earnings, you weren’t making a great investment. Remember the other way to look at the price to earnings (P/E) ratio is by inverting it to get the earnings yield. So for Google, a P/E ratio of 42 means you are paying $42 for each dollar of earnings. The earnings yield is the return you get based on the price you pay. For $42 you are getting $1, implying a yield of 2.4 percent ($ 1/$42). When Google was trading at these valuations, ultra – safe U.S. Treasury bills yielded over 3 percent. In other words, investors were willing to take less return by paying more in hope of a continual rise the in share price. You have no margin of safety at such lofty valuations. The slightest hiccups and the share price begins to free fall. Stocks are merely pieces of paper that fluctuate in price every Monday through Friday. Great investments, however, arise when sound business fundamentals dictate the investment decision.
That’s why it’s imperative to have a sound grasp of what it is you are doing buying businesses and what that entails, you must approach the markets with an emotion-free, fundamentally based approach before beginning your search strategy. Searching the stock market without a sound investment philosophy is like trying to walk before learning to crawl: It’s a painful experience. There is only one Warren Buffett, and he devoted the time, passion, and intensity needed to go through the 10,000-page Moody’s Stock Manual page by page, looking at every single stock, in order to develop a mental model of the markets. If you are a serious investor looking to participate in the investing game for many years, be prepared to roll up your sleeves and look at hundreds of stocks continuously. Fortunately, investors today have many more resources that aid in the search process than were available during Buffett’s early years. Unfortunately, investors today have many more resources that also can lead to poor investment decisions. What I mean by this is that while it’s great to have more resources, too much information or data begins to add noise to the meaningful information that you really need. In order to have a good search strategy, it’s important to flip the concept around first. In other words, instead of directly delving into how to develop a good search strategy by suggesting the best places to look, let ’ s flip it around. It is far easier to develop a good search strategy if you first understand where not to look.
One fundamental difference between the markets and the media makes the media a poor guidepost in security selection. The media tends to focus on the current state of affairs while markets are anticipatory creatures. While the media focuses on the current outlook of the economy, it is highly likely that markets begin to turn up just when investors are being told to exit the game. As Warren Buffett likes to quip, “If you wait for robins, spring will be gone.” What the media failed to convey during its bleak assessment of the economy in the late 1970s was that equity valuations had reached decade lows and the stock market was as a cheap as it had been in a very long time. Over the past 100 years of market activity, the market historically has experienced cycles in which it advanced (bull market) or declined (bear markets).
While the media maintains its focus on the current situation, markets - and investors - tend to focus on the future. And when you have a situation like the 1970s, when equities were selling at some of the lowest valuations in decades, the markets can start advancing before the slightest hint of good news from the media.
阅读到的有价值信息的自我思考点评感想
Making investment decisions based on business fundamentals can increase the probability of paying a sensible price for a share in a company. A great business does not necessarily imply a great stock investment. Investors tends to take less return by paying more in hope of a continual rise the in share price. However when you have no margin of safety at such lofty valuations, the slightest hiccups and the share price begins to free fall. Great investments, however, arise when sound business fundamentals dictate the investment decision. We must approach the markets with an emotion-free, fundamentally based approach before beginning the search for investment. Searching the stock market without a sound investment philosophy and unbiased information of the market. Investors should rely on the media as one source of information. Similar to the analogy regarding the stock markets, let the media inform but not guide you in what to do. As investors, we need accurate and honest journalism. We are fortunate to have many excellent sources, including BusinessWeek. But investors must remember the role of the media: to provide news commentary, not investment guidance. The media is staffed by journalists, not market analysts. By the time information reaches the front cover or front-page news, it’s already well known by the market. Annual issues proclaiming next year’s hottest mutual funds or hottest stocks are not new or original ideas. Investors are rewarded for finding value when everyone else is leaving the party. By the time the media gets hold of investment ideas, the smart money has already been there. Excitement is an investor’s worst enemy; it leads to paying high prices to participate with the herd mentality. An effective search strategy relies on knowing where not to look just as much as where to look. Let the media do its job of providing up-to-date news analysis on the state of the world; don’t rely on it to instruct you as to where to allocate your capital.
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