"Fred J. Tydeman" <tydeman[at]tybor.com> wrote in message news:<40DAEE5D.10D12B1D[at]tybor.com> ...
- quote -

Thanks for the pointer. I looked it up on Yahoo, and did
a compare to the S&P 500, and this is what I got.
http://finance.yahoo.com/q/bc?s=LMVTX&t=5y&l=on&z=m&q=l&c=^GSPC
It looks like a break even over the last 5 years compared with
the index.

Anoop

Anoop Ghanwani wrote:
- quote -

Bill Miller's Legg Mason Value has done it for 13 years.
I do not know where the list you want can be found.
---
Fred J. Tydeman Tydeman Consulting
tydeman[at]tybor.com Programming, testing, numerics
+1 (775) 287-5904 Vice-chair of J11 (ANSI "C")
Sample C99+FPCE tests: ftp://jump.net/pub/tybor/
Savers sleep well, investors eat well, spenders work forever.

Anoop Ghanwani <anoop[at]alumni.duke.edu> wrote:
- quote -

The way that my broker explained it to me is that the funds want to look
like they hold the good performers so they sell their losing stocks and
buy the ones that went up.

- quote -

A value investor only looks at the ratio of price to fundamentals, not
to impress other investors.

- quote -

Yahoo allows you to enter your portfolio or test portfolios into their
website so that you can continually monitor your total investment.

- quote -

Yahoo has a mutual fund screener that will help you with more recent
data. For instance, Screening for 1, 3, and 5 year returns over 15%
returned 72 funds. Unfortunately, it doesn't go back 10 years.

A better strategy is to buy the funds that were poor performers in the
previous year.

--
Ron

Ron Peterson <ron[at]shell.core.com> wrote in message news:<10dj7iuhc77du5e[at]corp.supernews.com> ...
- quote -

Isn't looking for value the reason why most funds end up underperforming
the index? Why would it be any different for an individual investor
investing in stocks? I feel more comfortable investing in the index
because at the end of the day, at least I know exactly how I'm doing
based on the movement of the index.

By the way, is there a place where can I find a list of funds that
have consistently beat the S&P 500 every year over a 10 to 15 year
period? If such funds exist, I want to put my IRA money in them.

Anoop

Anoop Ghanwani <anoop[at]alumni.duke.edu> wrote:
- quote -

The Dow does seem to track the S&P 500 pretty well. So, I think that one
can assume that 30 stocks is sufficient. It's more of a statistical
argument than one of stock selection.

The only problem with the Dow is the fact that there is no selection on
value.

--
Ron

What are "owner earnings"?

Owner Earnings: a company's net income plus depreciation, depletion,
and amortization, less the amount of capital expenditures and any
additional working capital that might be needed.

QR

Ron Peterson <ron[at]shell.core.com> wrote in message news:<10dgo0b8gl47s28[at]corp.supernews.com> ...

- quote -

Would investing in the Dow provide that diversification?

Anoop

quantumrock <quantumrock[at]gawab.com> wrote:
- quote -

Yes, that is why I like price/book over price/earnings as value
indicators.

- quote -

Yes, I consider 30 stocks to be a wide enough diversification for a
careful investor compared to the 100+ in an index fund.

- quote -

What are "owner earnings"?

--
Ron

My thoughts, with our friend Warren's in quotes:

- quote -

A good company subject to TEMPORARY financial distress could be a
value stock. That's one way for the stock to become temporarily cheap.

"Do not take yearly results too seriously. Instead, focus on four or
five-year averages."

"The critical investment factor is determining the intrinsic value of
a business and paying a fair or bargain price."

"Does the business have favourable long term prospects?"

"Does the business have a consistent operating history?"

"Buy companies with strong histories of profitability and with a
dominant business franchise."

"Always invest for the long term."

However, for companies with long-term financial distress:

""Turn-arounds" seldom turn."

- quote -

"Wide diversification is only required when investors do not
understand what they are doing."

"Risk can be greatly reduced by concentrating on only a few holdings."

However, if the average person is one who is not inclined to
thoroughly research the fundamentals of the company in-depth, I also
believe that he's probably better-off with an index fund.

On valuation:

"Focus on return on equity, not earnings per share."

"Calculate "owner earnings" to get a true reflection of value."

After having quoted these generalizations, let me now say that let's
not generalize too much. Each company is unique and each should be
evaluated on its own merits and pitfalls. Buffet's track record is
filled with exceptions: his (bad) investment in Berkshire the garments
company, his purchase of seemingly overvalued Coca-Cola, and so on.

QR

In article <17f41cc6.0406210007.1049fd16[at]posting.google.com> , darkness wrote:
- quote -


As Dreman demonstrates, they give much less rollercoaster rides than
the highflyers.

i

darkness <darkness39[at]yahoo.com> wrote:
- quote -

I think that if a company is subject to having financial distress, its
stock isn't a value stock.

A value stock will have low price/book and price/earnings ratios as well
as have growing sales such as the home builders have had the past few
years.

- quote -

There are several Dreman's funds, the small cap ones seem to do well,
but some of the stocks seem speculative to me.

- quote -

The index funds don't give a person a good way of sorting out the value
stocks. A small cap fund works that way somewhat, but I think people
need to get a diversified portfolio of about 30 value stocks.

In my view a stock needs to have a p/b < 3, p/e < 20, and average
revenue growth of > 5% to be considered a value stock.

Since value stocks tend to represent smaller companies try to make sure
that sales aren't much less than $1B and certainly not < $100M.

--
Ron

Tad Borek <borekfm[at]pacbell.net> wrote in message news:<iMGxc.7627$Mi6.6547[at]newssvr27.news.prodigy.com> ...

Just to add that Dreman is a fantastic book, but for the individual
investor it requires a (rare?) amount of time and energy and nerve to
buy these stocks: they tend to give you rollercoaster rides. Also you
need a diversified portfolio as value stocks are also the stocks that
can get into financial distress.

Dreman's own fund (Scudder) has very high charges.

I maintain that for the average investor, index funds (including
value-tilted index funds) are the best way to invest: buying a level
of diversification that an individual investor will find difficult to
achieve.

Tad Borek <borekfm[at]pacbell.net> wrote in message news:<iMGxc.7627$Mi6.6547[at]newssvr27.news.prodigy.com> ...
- quote -


Hi,

What books do you recommend that oppose the Efficient Market Hypothesis?

Thanks,
Latif

In article <4I5yc.342$Yb2.12[at]newssvr27.news.prodigy.com> , Tad Borek wrote:
- quote -

I have Buffett's fortune article about Euros:

http://igor.chudov.com/tmp/buf1.txt

and one munger's speech on worldly wisdom etc:

http://igor.chudov.com/tmp/munger1.txt

- quote -

no, these are a few dozen Bs... accumulated over the years...

i

In article <Ac2yc.201$LG.40[at]newssvr27.news.prodigy.com> , Tad Borek wrote:
- quote -

As an owner of a few Berkshire shares, I read every speech of Buffett
and Munger and it is always very illuminating.

i

Ignoramus2546 wrote:
- quote -


I read Buffett's letters on the Berkshire site, they always have some
good stuff. Munger I haven't read much from, just the occasional
interview. Any suggestions - is that on the BRK site too?

For your sake I hope those are a few A's! I remember considering
throwing my life savings into one share - which cost about $4,000 at the
time. Coulda woulda shoulda...

-Tad

quantumrock wrote:
- quote -

Thanks for posting that - good stuff.

I like his talk about the "false precision" in a lot of economics.
Totally agree.

-Tad

Thanks guys. Here's a link to speech made by Charles Munger, Buffet's
partner at Berkshire, to the Economics Dept. of the University of
California at Santa Barbara
http://www.tilsonfunds.com/MungerUCSBspeech.pdf He blasts away at the
EMH, and the whole discipline of economics along with it. (So if
you're an economist, better not read it and ruin your day

Tad Borek <borekfm[at]pacbell.net> wrote in message news:<iMGxc.7627$Mi6.6547[at]newssvr27.news.prodigy.com> ...
- quote -

Tad Borek <borekfm[at]pacbell.net> wrote:

- quote -

Both of those books are good. One should also look at some of the books
that discuss options.

--
Ron

quantumrock wrote:
- quote -

QR,
I look exclusively for contrarian ("out of favor") stocks (both
personally & in my business as an advisor). Probably very close to what
Ig called "mistake analysis." It's not really all that different from
value investing except that I'm looking for news/events that drive a
stock's price down, seemingly "too far." I focus only on established
companies with real businesses that have been around awhile, and that
seem likely to remain around long enough to rebound. The basic idea is
to grab a good stock when nobody wants it, and sell it a couple-few
years later when everybody wants it. I think this is as intuitive as
buying Christmas ornaments on December 31 instead of December 1. You
know, "buy low, sell high" - easier to implement when you hit the "low"
part right.

The best book I know of on this is David Dreman's "Contrarian Investment
Strategies." First version published in '70s, I think it's out of print
now but you can still find it. He's a money manager & Forbes columnist,
and one of the people involved with the Journal of Behavioral Finance
(see http://www.psychologyandmarkets.org/).

In a sense this approach deems fundamental analysis - at least, the
thorough type that term is typically associated with - to be too
difficult and subject to error for most investors, professional analysts
included (and maybe especially them). It's definitely not reliant on
technical analysis though, which Dreman compares to astrology (I agree).
You might call it "fundamental lite."

Dreman comes down hard on market efficiency and those sections of the
book are interesting even if stock-picking isn't your interest. But even
some in the EMH crowd are comfortable with this...in Malkiel's "Random
Walk Down Wall Street" he acknowledges that contarian strategies that
exploit short term "anomalies" might have some possibilities - he
mentions Dreman by name.

Give it a read!

-Tad