Lured by lower prices? Will you buy shares because it is cheaper than its peers?
A question that fundamentalists come across quite often. Why not buy the cheaper one of the lot? We fall prey to the lure of lower prices with a bias towards a company whose price quoting on the exchange than its peer group.
Margin Of Safety (MOS) can be defined as a principle of investing when the market price is significantly below the estimation of the intrinsic value. This difference allows an investment to be made with minimal downside risk. The term was popularized by Benjamin Graham (known as “the father of value investing”) and his followers, most notably Warren Buffett.
Market prices falling? – should you exit your long-term stock specific portfolio too?
Sharp falls in market prices generally make headlines across all media. And no sooner when the index falls, predictions of more doom start pouring in from all corners. Clearly, the mood is that of panic and fear. And we won’t blame the investors if they are unwilling to touch stocks even with a six-feet pole. Simply because our brains are hardwired to make us run from danger at the first sight of it. And when it comes to investing, nothing can be more dangerous than seeing stocks suffer violent declines in a matter of hours.
Clearly one of the hottest topic and all eyes are on the Election of the country. We are now in the last phase and of course so many people with so many views and this Sunday, with exit polls the excitement is likely to take be taken to the next level. It has been indeed one of the very important events for the country and as it has been said the festival of democracy is going on. So, what is it that this election is being given so much of importance is being given from a stock market perspective?
Is it that 45 days of various phases – which is considered as one of the long periods of an election?
Is it that last 16 months has been so painful for the investors that the market is hunting for some strong reason for the bounce?
Country, after a long time, is looking for a stronger government in these challenging times?
Is it that Media has made it so large that its impacting everyone’s mind?
The annual letter to the shareholders from Warren Buffett and Charlie Munger (published in Feb’19) is one of the things that the investment community watches out for — many things to learn therefrom. We have pulled out some excerpts and our takeaway on the same.
admin8 Learnings from Warren Buffet’s 2018 Shareholder Letter