Comments on: Focusing On The Calendar Year and Markets http://www.fwallstreet.com/article/97-focusing-on-the-calendar-year-and-markets/ Value Investing Blog Mon, 16 May 2011 10:55:06 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: M Williams http://www.fwallstreet.com/article/97-focusing-on-the-calendar-year-and-markets/#comment-1150 M Williams Wed, 09 Jan 2008 05:33:59 +0000 http://www.fwallstreet.com/article/97-focusing-on-the-calendar-year-and-markets#comment-1150 Thanks for the reference Joe. That's precisely what I was looking for. Keep posting the great info. Thanks for the reference Joe. That’s precisely what I was looking for.

Keep posting the great info.

]]> By: Joe Ponzio http://www.fwallstreet.com/article/97-focusing-on-the-calendar-year-and-markets/#comment-1145 Joe Ponzio Tue, 08 Jan 2008 17:10:16 +0000 http://www.fwallstreet.com/article/97-focusing-on-the-calendar-year-and-markets#comment-1145 <b>M Williams:</b> Check out <a href="http://www.fwallstreet.com/blog/4.htm" title="the JNJ post">the JNJ post</a> - the spreadsheet is at the end. <b>Babui:</b> No one said this game was easy. In fact, nerves can kill a portfolio. I've seen it happen too many times. If Joe 6 Pack has certain goals to reach in a limited timeframe, he may want to consider not being in the markets. If that timeframe is, say, retirement in 5 years, J6P needs to remember that he'll have another (hopefully) 20 years of investing after retirement. Limited capital is not a major obstacle. So long as you have at least $1,000 (though preferably at least $5,000), you can invest in companies. When staring retirement in the face, $200,000 or $500,000 doesn't seem like enough to be "playing" in the markets. To that I say, "Right!" All the more reason to strategically invest in underpriced companies and let time do its thing. And if the spouse's nerves are directing the portfolio, Joe 6Pack needs to run from the markets as fast as he can - at least until he can convince Mrs. 6Pack to understand investing beyond the daily swings. Over the long-term, if the short-term swings are too scary, consider an index fund and individual bonds. David: Thanks for that great article. I posted it elsewhere a while back, but still a great refresher! M Williams: Check out the JNJ post – the spreadsheet is at the end.

Babui: No one said this game was easy. In fact, nerves can kill a portfolio. I’ve seen it happen too many times. If Joe 6 Pack has certain goals to reach in a limited timeframe, he may want to consider not being in the markets. If that timeframe is, say, retirement in 5 years, J6P needs to remember that he’ll have another (hopefully) 20 years of investing after retirement.

Limited capital is not a major obstacle. So long as you have at least $1,000 (though preferably at least $5,000), you can invest in companies. When staring retirement in the face, $200,000 or $500,000 doesn’t seem like enough to be “playing” in the markets. To that I say, “Right!” All the more reason to strategically invest in underpriced companies and let time do its thing.

And if the spouse’s nerves are directing the portfolio, Joe 6Pack needs to run from the markets as fast as he can – at least until he can convince Mrs. 6Pack to understand investing beyond the daily swings.

Over the long-term, if the short-term swings are too scary, consider an index fund and individual bonds.

David: Thanks for that great article. I posted it elsewhere a while back, but still a great refresher!

]]> By: david http://www.fwallstreet.com/article/97-focusing-on-the-calendar-year-and-markets/#comment-1129 david Mon, 07 Jan 2008 08:40:28 +0000 http://www.fwallstreet.com/article/97-focusing-on-the-calendar-year-and-markets#comment-1129 Focus on what you can control - buy great companies selling below their intrinsic value. Anytime you feel like doing anything else, re-read this great buffett piece: http://www.valueinvesting.de/en/superinvestors.htm Focus on what you can control – buy great companies selling below their intrinsic value.

Anytime you feel like doing anything else, re-read this great buffett piece:

http://www.valueinvesting.de/en/superinvestors.htm

]]> By: Babui http://www.fwallstreet.com/article/97-focusing-on-the-calendar-year-and-markets/#comment-1128 Babui Mon, 07 Jan 2008 06:07:48 +0000 http://www.fwallstreet.com/article/97-focusing-on-the-calendar-year-and-markets#comment-1128 All true - theoretically. In the real world, Joe 6 Pack has limited capital; certain goals to reach in a limited timeframe and there are opportunity costs to holding while the market (and companies) are going down. Besides, J6P is married and his wife doesn't understand the 'Buffett method' and 'margin of safety' and 'intrinsic value' and screams bloody murder when the retirement monies/kid's education fund goes down the drain. Sometimes, it pays handsomely to sit on the sidelines while the economy goes to hell in a handbasket. That way, you will get many great companies to choose from (as opposed to the 1-2 in a "normal" mkt) which will allow you to better deploy your capital or buy 'brand' names at a lesser margin of safety. Your opportunity cost of holding will be less (meaning that the beaten down great company will rebound quicker). Finally, your wife will understand purchases of Colgate or McDonalds as opposed to some obscure company that may have unbelievable cash flow and great margin of safety. Your overally yearly return may be lower (over the long term) from buying 'brand' companies as opposed to the obscure company that Buffett and other disciples are buying but your wife will love you and you won't qts your own purchases. When all is said and done - value investing is easy. "Holding on in the real world" is tough, very tough. All true – theoretically. In the real world, Joe 6 Pack has limited capital; certain goals to reach in a limited timeframe and there are opportunity costs to holding while the market (and companies) are going down. Besides, J6P is married and his wife doesn’t understand the ‘Buffett method’ and ‘margin of safety’ and ‘intrinsic value’ and screams bloody murder when the retirement monies/kid’s education fund goes down the drain. Sometimes, it pays handsomely to sit on the sidelines while the economy goes to hell in a handbasket. That way, you will get many great companies to choose from (as opposed to the 1-2 in a “normal” mkt) which will allow you to better deploy your capital or buy ‘brand’ names at a lesser margin of safety. Your opportunity cost of holding will be less (meaning that the beaten down great company will rebound quicker). Finally, your wife will understand purchases of Colgate or McDonalds as opposed to some obscure company that may have unbelievable cash flow and great margin of safety. Your overally yearly return may be lower (over the long term) from buying ‘brand’ companies as opposed to the obscure company that Buffett and other disciples are buying but your wife will love you and you won’t qts your own purchases. When all is said and done – value investing is easy. “Holding on in the real world” is tough, very tough.

]]> By: M Williams http://www.fwallstreet.com/article/97-focusing-on-the-calendar-year-and-markets/#comment-1127 M Williams Mon, 07 Jan 2008 02:24:01 +0000 http://www.fwallstreet.com/article/97-focusing-on-the-calendar-year-and-markets#comment-1127 Excellent post! Quick question for you though. I read through your 4-part post %u201CCalculating The Value Of A Business.%u201D I was wondering if you had spreadsheets to demonstrate the example you use in calculating the Johnson and Johnson intrinsic value. Also, if you have spreadsheets of other examples in the past, I would love to see those as well. I just want to make sure that I%u2019m making decisions using the correct data. Thanks. Excellent post!

Quick question for you though. I read through your 4-part post %u201CCalculating The Value Of A Business.%u201D I was wondering if you had spreadsheets to demonstrate the example you use in calculating the Johnson and Johnson intrinsic value. Also, if you have spreadsheets of other examples in the past, I would love to see those as well. I just want to make sure that I%u2019m making decisions using the correct data.

Thanks.

]]> By: Boring Market http://www.fwallstreet.com/article/97-focusing-on-the-calendar-year-and-markets/#comment-1126 Boring Market Sun, 06 Jan 2008 19:53:22 +0000 http://www.fwallstreet.com/article/97-focusing-on-the-calendar-year-and-markets#comment-1126 Great Post! I have been reading your blog for a while and I like how you summed up most of your standing of the stock market and Buffett's ideology into one post. I agree that many people get hooked on price without understanding what it means to own a great company. Look at Apple, they have a mighty good moat around them. Even though their market share isn't big they still dominate at what they do. Not because of the buzz that surrounds them, but rather of their innovative and easy to use products with a great business strategy in place. www.boringmarket.com Great Post! I have been reading your blog for a while and I like how you summed up most of your standing of the stock market and Buffett’s ideology into one post. I agree that many people get hooked on price without understanding what it means to own a great company.

Look at Apple, they have a mighty good moat around them. Even though their market share isn’t big they still dominate at what they do. Not because of the buzz that surrounds them, but rather of their innovative and easy to use products with a great business strategy in place.

http://www.boringmarket.com

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