Can buying over-valued stocks be value investing?

[Gregmal]

41 minutes ago, John Hjorth said:

 

Then there is the relativity of investment process and attitude towards investing with regard to the time dimension, meant as 'change over time'.

 

I see you registered here on CoBF on 28^th September 2016, now more than 8 years ago. Eight years are so-so medium time-frame for an old bugger like me, 8 years for a relatively young person like you are 8 light years in time distance.

 

I personally did consider you in your early innings here on CoBF very transactional oriented, and ambitious, hungry to get ahead. Do you remember that you actually once posted here on CoBF about : 'Don't pay for even a a lawn mower cash on delivery, if you can't get a discount on it, unpaid bills pulling no interest before due according to payment terms are your float, - Hold on to your shares, and do not reduce the amount of cash you are able to buy stocks for!' Do you remember it?

 

Personally, I still remember running 'montly closings' on every last Saturday in every month in the last part of the accumulation phase ('14 and '15), being a PITA on The Lady of House by asking questions such as 'What have you spent, that is still not added as future payments in the bank interface?', to get totally anal about how much money is actually avaible for buying stocks, by anal [<- is this even  a word in English?] doing monthly liquidity forecasts.

LOL, totally. My life has changed very drastically in 8 years. Starting with the 8 year old I’m just getting back from the driving range with!

[SharperDingaan]

One of smartest things you can own is installed, working, and essential capital equipment; and the more that it costs to build the better (railroads, pipelines, tar sand facilities, etc.). Until it's built there will be all kinds of screaming around overspends, and periodic stock sell offs will generate opportunities; but once it's up & running, starts paying a dividend, and is past its payback period  .......

 

Every year inflation raises the replacement cost further, throughput and technology typically improve, depreciation steadily rolls off, and you end up with an industry controlling asset operating at essentially variable cost. The best that a competitor can do is buy out the asset and its accesses, then continue to operate it while also twinning it with a state-of-the-art replacement; even if the original is utter junk. That's one hell of a moat ..... and even monkey proof! 

 

Lot of o/g companies were built via serial acquisition paid for with stock, but few investors realise that it's a 3 phase process; growth via exploding share count (1-3 yrs?), post party collapse and share consolidation (1-3 yrs?), and pennies on the dollar acquisition via a debt to equity swap (1-2 yrs?). Everyone has heard the growth stories, maybe a few remember consolidation, but the debt to equity swaps?

 

Point? Look at today's darlings, wish them all the luck in the world .. then go shopping 5-6 years out. 

Or, which sectors were big 5-6 years ago ... and where are they today   

 

SD 

 

 

Edited 9 hours ago by SharperDingaan

[John Hjorth]

1 hour ago, Gregmal said:

LOL, totally. My life has changed very drastically in 8 years. Starting with the 8 year old I’m just getting back from the driving range with!

 

Thank you for your [personal] confirmation here, Greg [ @Gregmal ],

 

What I really meant here, is to continously stay observant, situational flexible, 'non-frozen', 'and-ready-to-learn about-and-mentally-prepared-to-always-learn-new-interesting-stuff' to stay on top.

 

With the rigth mindset, there is always something to do, somewhere!

 

- To become a winner, one simply has to decide to become so! - And then do the work it requires! - Otherwise, nobody will never, ever get there! - Attitude, you know!