Re:The Superinvestors of Graham-and-Doddsville (1984)
by derivagral on Wednesday August 15, 2018 @08:33AM
(#17765525)
As someone who followed Intelligent Investor (and Klarman's Margin of Safety concepts) as an amateur who made good annualized returns, my partner and I stayed away from the modern tech stocks. We basically agreed with what you say about the risk on the performance of a company like FB: if things go bad, there's no real moat or tech or assets that comes close to the market cap of the company.
What's still reasonably valid is the concept of both moats and float, both of which I think you can get indications of in the 10-Q/A reports that aren't always reflected in current expectations.
Also, focus on where you can win. You aren't pricing AAPL better than the legions of professionals over 5 years, but the boring small-mid cap stocks that are too small for major funds to care about have more opportunity.
And finally: this is why indexing is such a huge thing. This stuff is hard, and using a low fee fund to track the market lets you live your life instead of having an extra job. I personally quit because while the % was good, the scalar wasn't worth the time invested.
Re:The Superinvestors of Graham-and-Doddsville (1984)
by bunderbunder on Wednesday August 15, 2018 @04:03PM
(#17769262)
That's more-or-less what I concluded after reading II, too, and why I never made a serious go of it. With the amount of money I had to play with, even if I managed to double market returns, which I assumed was a very optimistic outcome, it would still be a lower return on my time, in terms of $ per hour, than just working the occasional contract job after hours.
Back when companies tended to have a lot of physical assets (relative to their overall value) that tended to depreciate slowly, that might have been easy to calculate. For a company that participates in the information or service economy, though, virtually all of their value is tied up in intangibles, and about the only physical assets that are likely to have any value at all after a few years are the office furniture.