Value investing actually means some Market-Timing?

Discussion in 'Strategy Development' started by crgarcia, Nov 13, 2008.

  1. You determine value, and if its lower than share prices, with some Margin of Safety, you buy.

    If stocks become too overvalued (i.e. in a bubble), you should sell, and wait until stocks become cheap again (relative to earnings).
    Even if it takes years.

    So, some degree of market timing is actually used?
     
  2. Don't you have that backwards.
     
  3. backwards smachwards, I've done both, let's hear more about timing:D
     
  4. MGJ

    MGJ

    Market timing = (everything that isn't Buy And Hold).

    If either
    • (A) you buy on any day other than day 1, or
      (B) you ever sell
    then you are not doing Buy And Hold. You are engaged in market timing.

    Since Value investing includes both (A) and (B), it is by definition, not Buy And Hold. Therefore Value Investing is market timing. Simple.
     
  5. The sell and hold of the shares depends on the market time and it is not always better to have a long lapse for selling of the shares.
     
  6. It depends, some people do it on a relative basis - try to always be in the relatively cheap stocks even if they are expensive in an absolute sense, and underweight or short the relatively expensive ones.
     
  7. You have to hope that the company's accounting figures are accurate and factual. In reality, you hope that you're buying something at a "discount", not something that is worthless when the non-balance sheet items are included. :cool: