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Realization-of-value problem
By Level13  •  February 21, 2008
By: Level13 What kind of business do you want to own? Investors out there know that identifying what to invest in is a mind-challenging event. There is no better reward than seeing our money appreciate based on our own decisions and conviction. We are taught by the grandmasters (Buffett, Fisher) that one should only invest in businesses that have superior economics and selling for the right price. But what is a desirable purchase? There is no business that is perpetually bad. Stock prices do not go down forever. With that in mind, most businesses were possible candidates for investment as long as they are selling at a bargain price. Through calculations, one could find out the intrinsic value of any business and if their stock price falls below that value, we should buy it to add into our portfolio. In this way, we wouldn’t be too concerned with the nature of the business we are buying. Simple isn’t it. A portfolio of such stocks can be built up based on the belief that someday the price will rise to or above the stock’s intrinsic value. Read more...
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By Level13
Level13 is a 30 yr old guy who started investing about 4 years ago. He is a value investor who tries to buy a dollar note for eighty cents or less. Level13 Investor Creed "Do not believe in anything simply because you have heard it. Do not believe in anything simply because it is spoken and rumored by many. Do not believe in anything merely on the authority of people who are above you. Do not believe in anything simply because it is found written in books. But after observation & analysis, when you find that anything agrees with reason and is conducive to the good and benefit of one and all, then accept it."
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