Price is What You Pay Value is What You Get

[moore_capital54]

Hope everyone is enjoying the recent activity in the markets.

 

Hopefully some of the younger investors have realized how foolish it is to focus on the macro and make doomsday predictions. I don't need to tell you how well were doing, all you have to do is read my post history, but yeah were doing pretty damn well! :)

 

Equities were extremely cheap for the past 60 days, today's move on the S&P was almost shocking but is merely indicative of the fact that most investors were not positioned for this. Quite the contrary word on the street is short interests were near historic highs going into this week which would explain the strength in today's move.

 

Bottom line, the old adage of price is what you pay value is what you get only works if you can actually recognize the divergence of price from value. And thats pretty hard to do when you become obsessed with macro predictions and end of the world scenarios.

 

Cheers!

 

 

[Santayana]

Foolish like Watsa and Friedberg ;D

 

I think the real pessimists are those who think the world would end just because financial markets crashed.  I guess that explains why you don't believe in preparing for a crash.  You use the terms doomsday and the end of the world, and I do agree you can't prepare for that.  But a Great Depression 2, that's the end of the world, really?

 

Oh, and yes I did enjoy the markets today.

[given2invest]

Don't worry, the world is completely fine (economically) now that Europe has a bail out package. 

[enoch01]

Don't worry, the world is completely fine (economically) now that Europe has a bail out package.

 

;D

[AZ_Value]

Lol... Come on guys Moore is going to scold us again.

 

However, I think I have to agree with him. After the previous heated thread, I took a serious and objective look at my record and to be frank the number of opportunities that I've missed waiting for stuff to get cheaper outweighs the number of opportunities I profited from by waiting for stuff to get cheaper by far!! Not even close.

It's been Europe for a while now, it was a double dip recession before or a debt ceiling debacle in Congress and now I've been hearing people saying that one should wait because no way the Super Committee agrees on a cost cutting deal by their deadline (November 24th) and that will certainly hit the market hard etc..

All those things will continue to be there but value is value and when it's demonstrably there and something is really cheap when valued conservatively, one shouldn't spend his time worrying about when and how Europe will hit the fan.

 

[Parsad]

Foolish like Watsa and Friedberg  ;D

 

The goal is to make money long-term with the least amount of risk.  How anyone gets there doesn't matter...as long as you get there.

 

I'm just wondering where my contrary indicator disappeared to this month?  ;D  Munger, where art thou?  Cheers!

[Myth465]

 

I'm just wondering where my contrary indicator disappeared to this month?  ;D  Munger, where art thou?  Cheers!

 

LOL, I called him that first...

[Baoxiaodao]

Hope everyone is enjoying the recent activity in the markets.

 

Hopefully some of the younger investors have realized how foolish it is to focus on the macro and make doomsday predictions. I don't need to tell you how well were doing, all you have to do is read my post history, but yeah were doing pretty damn well! :)

 

Equities were extremely cheap for the past 60 days, today's move on the S&P was almost shocking but is merely indicative of the fact that most investors were not positioned for this. Quite the contrary word on the street is short interests were near historic highs going into this week which would explain the strength in today's move.

 

Bottom line, the old adage of price is what you pay value is what you get only works if you can actually recognize the divergence of price from value. And thats pretty hard to do when you become obsessed with macro predictions and end of the world scenarios.

 

Cheers!

 

Moore, you were right this time. However, things could go either way. It is hard to say if this crisis is over.

 

Have you experienced the bear market in China from 2002-2005? My family did and people did not want to talk about it because it was so painful to watch it going down, and down. I did not single out 73-74 bear market because I was not even born then. But I guess the new generation of investors really have not experienced a bear market. If a bailout is ready every time there is a crisis, it only tells you bigger trouble is ahead.