How do you value invest in a stock and buy it ?

Discussion in 'Trading' started by HedgefundTrader2, Aug 23, 2007.

  1. You may have heard all that hoopla about Warren Buffet and others who follow him like Mohnish Pabrai and dozens of others. I was still in awe wondering how I can fish like them. There is a huge gap, between the lines if you read things in the media. No one speaks about it either. No one tells you how you can find companies and value them right with simple basic research and invest soundly.

    Well how do you value a company and buy it ?

    I have read Mohnish Pabrai's new book " DHANDO INVESTOR" The book is great tells you all about kelly formulas, low risk arbitrages and praises Mr. WARREN BUFFET wall to wall in agonizing details. Its more of a fatherly complex the author perhaps carries for Mr. Warren Buffet in my opnion. It also narrates Mohnish's value investing in the past and how he did few companies. Well that is very good, but I was left holding the book in my hand, wondering how do you do it?

    Dhando Investor is very circumspect about revealing any methods and nuts and bolts of value investing. In fact the author, hides those very same techniques that makes him money. In other words it leaves the reader, not knowing how to fish on his own. I am no fool, I could easily see that.

    So in my quest, how to value companies on my own and buying these wonderful businesses for a bargain, I tore apart the whole Internet over 2 days delving into anything I can get my hands on. I educated myself to the bone, but still the nuts and bolts were missing. I can read all of it but I could NOT evaluate these businesses like Mohnish Pabrai mentions and Warren Buffet does it. Those tidbits and pieces wouldin't jive as a whole and there was a huge information gap in that area of trading or investing.

    Till I stumbled upon PHIL TOWNS ' RULE #1 ' book.

    Here is one book that I will recommend that gives you exactly how, you as a small time investor can lift all that gold usurped by these Buffets and Pabrais from a very unselfish and giving guy. His book " RULE #1 " is the real handbook for small time investors who can evaluate a company and its financial conditions under 5 minutes. Once I got used to his methods I can find all those numbers right off the Internet and arrive at the valuations in freaky number of seconds. In fact, I can look at these numbers and know if this company is fundamentally sound and if its a worth a bargain to buy! You get his web site and his letters. This is an extraordinary book by an extraordiany author.

    Good Luck
  2. How about sharing the very things you are promoting?

  3. I am not promoting anything. I didn't know about this book few days ago.

    What do you want to know?
  4. You want to learn about god you read the bible.
    you want to learn about fundamental analysis you read the bible(Sercurity Analysis by Benjamin Graham, and The intelligent investor).

    Take an accounting class and learn how to read and understand a balance sheet, income statement, 10K, 10Q, Statement of Cash flows, annual report etc for starters.
  5. wave


    The original version of the Intelligent Investor that has the charts with rolling eps overlayed is what you want to read as well as Wall Street on Sale by Timothy Vick and Greenblatt's Little Blue book.

    Buying good values at depressed prices achieves superior returns over time with relatively low risks.
  6. read about the stock_trad3r index

    give you a good idea about what kind of stocks to buy to make money.

    At this point I strongly favor large cap growth stocks that are trading near or at 52 week highs. Avoid small cap and mid caps. Also avoid stocks and sectors that underperform.

    Value investing isn't a very good strategy. My index is up 11% since 6/1407 and all the stocks there with the exception of gs and ddm have PE ratios above 30.

    Not a good idea.
  7. hdawg87


    Weren't you the same guy posting about how buffet sucks on the berkshire hathway thread in stocks?

    Also stock trader is worthless.
  8. mde2004


    This index is incorrect. Stock_Trad3r is a fool.
  9. Never said buffet sucks. He is overrated cause his methods are outdated.

    High growth, large cap momentum is the way to go.
  10. It seems that way, look at BRK.A and BRK.A what have they done for the stockholders in 2007? This is world's greatest stock right? Its largely a white elephant sucking wind. There is lot of PR behind Warren Buffet, someone who is constantly punching stories in the media, just like Donald Trumph. These people hire PR firms to market themselves and corner interest and money into their holdings. I strongly suspect that.

    When I posted that I make 6-9% returns consistently with options, which puts me way ahead of value investing geniuses, people got really mad at me in the thread. But I have hard numbers to prove . I know lot of people who do better than me.
    #10     Aug 24, 2007