RetireJapan

EmaxisSlim Cultist wrote: ↑Sat Dec 11, 2021 7:27 am
Timing the market is not that easy.

This article explains the impact of missing the key days:

https://www.fool.com/investing/2019/04/ ... he-st.aspx

UnderscoreEX, you have mentioned more than once doing your research and waiting for the right opportunities.
Of course, everyone wants to buy stocks at a discount.
There is an opportunity cost to have investment money sitting around, not invested, waiting for that perfect opportunity. That is one of the problems with your strategy.

beanhead wrote: ↑Sun Dec 12, 2021 12:56 am

EmaxisSlim Cultist wrote: ↑Sat Dec 11, 2021 7:27 am
Timing the market is not that easy.

This article explains the impact of missing the key days:

https://www.fool.com/investing/2019/04/ ... he-st.aspx

UnderscoreEX, you have mentioned more than once doing your research and waiting for the right opportunities.
Of course, everyone wants to buy stocks at a discount.
There is an opportunity cost to have investment money sitting around, not invested, waiting for that perfect opportunity. That is one of the problems with your strategy.

Yeah, people have been dating the market is overvalued for about ten years now. Imagine sitting in cash that whole time

captainspoke wrote: ↑Sat Dec 11, 2021 10:42 pm A comment/principle that I read recently: "Focus on participating in the market rather than beating it."

The simplest form of market participation, index funds, allows you to meet the market.

Any other strategy that you employ that does not at least meet the market, after costs, is a waste of time, energy, and money.

Passive investing is the benchmark. If you can not "beat them" you should "join them".

There have been a lot of good points about this and I will take them to heart. It might be the case that this is a smaller portion of my portfolio than planned previously.

There were some comments that said intrinsic value of a company is only a 'guess', and I am not so sure about that. If you could estimate the rough intrinsic price using the value investor calculations and add another 50% margin of safety on top of that, I think you can be confident that you are getting a deal.


I forgot to quote the comment, but they were asking to share the portfolio of value investors where they beat the market.
Is information like that public? For example, there are value investors that I follow and they do show their portfolios but this could be fabricated.

RetireJapan wrote: ↑Sun Dec 12, 2021 3:33 am Yeah, people have been dating the market is overvalued for about ten years now. Imagine sitting in cash that whole time

Isn't that the consensus opinion?
Inflation caused by quantitative easing in addition to recent spending due to Covid-19 has pumped the value of stocks. More people feel like they have extra money (just like me) and are looking to get into the markets.

Even during the last 10 years of overvalued prices there have been crazy good deals to be had. They are rare and limited-time deals though.

UnderscoreEX wrote: ↑Sun Dec 12, 2021 10:48 pm There were some comments that said intrinsic value of a company is only a 'guess', and I am not so sure about that. If you could estimate the rough intrinsic price using the value investor calculations and add another 50% margin of safety on top of that, I think you can be confident that you are getting a deal.

Call it an estimate or call it a guess, but that methodology (with a 50% buffer!) sounds pretty rough to me. And let's not even get into how value investors have been consistently slaughtered (ie. wrong) using such methods over the last 2 decades.

UnderscoreEX wrote: ↑Sun Dec 12, 2021 10:48 pm Even during the last 10 years of overvalued prices there have been crazy good deals to be had. They are rare and limited-time deals though.

If you have the ability to identify those deals in real time and pull the trigger on a consistent basis, you will become the next rock star of investing and your picture will be on the cover of Fortune. That's how hard it is.

It sounds like you want to do this out of personal interest, almost as a hobby or challenge. That is fine.

I would say put 90% of your investment in index funds.

Try your strategy for 10%.

Then reevaluate after a few years. It is most likely your 10% might underperform, but your personal enjoyment and satisfaction are also important.

mighty58 wrote: ↑Mon Dec 13, 2021 2:26 am Call it an estimate or call it a guess, but that methodology (with a 50% buffer!) sounds pretty rough to me. And let's not even get into how value investors have been consistently slaughtered (ie. wrong) using such methods over the last 2 decades.

I didn't know it was contentious that it is possible to do value investing effectively and beat the market. From what was written in the books and in other tangential research, it looks like there are a lot of people who use value investing to beat the market.

Warren Buffet, Mohnish Pabrai and Charlie Munger use the same strategy of course, but I guess you can just say, "yeah, they can do it but the average person can't".
Tbh, I am not really sure how to find a database of individual investors who are smaller scale. If the top value investor's results don't count, then there's nothing I can say. I'm sure a youtube video from a value investor sharing their portfolio won't count.

If you have the ability to identify those deals in real time and pull the trigger on a consistent basis, you will become the next rock star of investing and your picture will be on the cover of Fortune. That's how hard it is.

I think the limitation doesn't come from the difficultly of evaluating a company. The difficulty comes from the time waiting for something to happen.


I appreciate the advice and I will take it all into consideration.

Not sure if this is the correct discussion but this webpage is useful.
Choosing 'the winners' across the medium to long term is clearly very tricky:
https://americanbusinesshistory.org/the ... the-world/

I just saw an ad for Interactive Brokers that said they now have a tool that can identify value opportunities across markets, called the 'Interactive Brokers Global Analyst'