Several years ago Jason Zweig did a great interview with Seth Klarman titled – Opportunities for Patient Investors, which was published by the CFA Institute. While the entire interview provides a number of value investing insights, one answer, in particular, provides a unique insight into Klarman’s psychology towards investing saying:
“In investing, whenever you act, you are effectively saying, I know more than the market. I am going to buy when everybody else is selling. I am going to sell when everybody else is buying. That is arrogant, and we always need to temper it with the humility of knowing we could be wrong—that things can change—and acknowledging that we have a lot of smart competitors.”
Here is an excerpt from that interview:
Zweig: In a Forbes article in the summer of 1932, Benjamin Graham wrote, “Those with enterprise haven’t the money, and those with money haven’t the enterprise, to buy stocks when they are cheap.” Could you talk a little bit about courage? You make it sound easy. You have great clients and great partners. Was it easy to step up and buy in the fourth quarter of 2008 and the first quarter of 2009?
Klarman: You may be sceptical of my answer, but, yes, it was easy. It is critical for an investor to understand that securities aren’t what most people think they are. They aren’t pieces of paper that trade, blips on a screen up and down, ticker tapes that you follow on CNBC.
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Value investing starts with low PE stocks, but it shouldn’t be an investor’s only financial metric.
What do Warren Buffett, Ben Graham, Seth Klarman, and Peter Lynch all have in common? Besides being wildly successful investors, they’re all are adherents to value investing, a method where one attempts to buy securities that have a higher intrinsic value than their current price.
One of the most basic forms of value investing is to find stocks with low price-to-earnings (PE) ratios. The PE ratio is a simple ratio that divides the current price per share of a company by the earnings per share over the trailing-12-month period. The logic behind buying low PE stocks is simple: As an investor, you are ultimately entitled to a pro-rata portion of company earnings, so paying the lowest cost, or multiple, for those earnings is preferable than paying a higher multiple. Essentially, your dollar is buying a larger portion of company earnings than it would with a high-multiple stock.
The benchmark indices settled around 1 per cent lower on Friday, led by a fall in the banking, information technology (IT) and fast-moving consumer goods (FMCG) stocks amid weakness in the Asian markets, which fell to a 20-month low.
The S&P BSE Sensex ended at 33,349, down 341 points, while the broader Nifty50 index settled at 10,030, down 95 points.
Among the sectoral indices, the Nifty IT index fell 1.9 per cent due to a fall in the shares of Infosys, Tata Consultancy Services (TCS) and HCL Technologies. The Nifty Bank index, too, declined 1.6 per cent weighed by YES Bank which fell 8.7 per cent after the private lender posted a fall of 3.8 per cent in net profit for the September quarter. The Nifty FMCG index settled 1.4 per cent lower dragged by ITC, which fell even as the company reported 11.92 per cent rise in standalone net profit to Rs 29.55 billion for the quarter ended September 30, 2018.
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Here’s the deal:
I’m not a chart pattern trader.
The Ascending Triangle chart pattern is one of the few patterns I trade.
Because when other traders get stopped out, they help “push” the market further in your favor.
In short, you EXPLOIT the stop-loss orders of losing traders — and that’s why it works.
And because this is so powerful, I’ve created a new trading video on Ascending Triangle chart pattern.
- What is an Ascending Triangle chart pattern and why does it work
- You should always go short when the price is at Resistance, right? Wrong! I’ll explain why…
- How to better time your entries & exits when trading the Ascending Triangle
- When is the best time to trade Ascending Triangle (and why)
- How to find high probability breakout trades with the Ascending Triangle chart pattern
You ready to learn this powerful chart pattern?
Then go watch this video below now…
Now, here’s a question for you…
How do you trade the Ascending Triangle chart pattern?
The original post by Rayner Teo appears on tradingwithrayner.com and is available here.
Benchmark indices Sensex and Nifty ended over 1 per cent lower on Friday, dragged by fall in blue-chip companies such as Reliance Industries (RIL), Infosys and YES Bank amid muted global cues. The S&P BSE Sensex ended 464 points or 1.33 per cent down at 34,316 while NSE’s Nifty50 index settled at 10,303.55, down 150 points or 1.43 per cent.
Among individual stocks, RIL dipped as much 7% to Rs 1,073 on the BSE in the intra-day trade after a mixed bag results for the quarter ended September 2018 (Q2FY19) with its retail and digital services (telecom; Jio) businesses continuing to post strong growth, while its core refining business performance was a bit disappointing amid high expectations. The stock ended at Rs 1,102 apiece on BSE, down 4 per cent.
YES Bank also dropped as much as 8 per cent in the intra-day trade on Friday after the Reserve Bank of India (RBI) on Wednesday once again rejected the lender’s request for extending the term of MD & CEO Rana Kapoor, and reaffirmed the February deadline for finding his successor. Shares of the lender ended at Rs 218, down 6 per cent.
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May this Dussehra bring you loads of joy, success and prosperity, and may your worries burn away with the effigy of Ravana. Wishing you a year full of smiles and happiness. – Team StockArchitect
The benchmark indices ended over 2 per cent higher on Friday after the rupee rose against US dollar amid firm Asian markets.
The S&P BSE Sensex ended at 34,734, up 732 points (2.15 per cent), while the broader Nifty50 index settled at 10,472, up 238 points (2.32 per cent).
The rupee strengthened against the US dollar on Friday, rising 53 paise to 73.58 against the greenback in intra-day trade.
Among sectoral indices, the Nifty Auto index settled 4 per cent higher led by a rally in shares of Mahindra & Mahindra and Maruti Suzuki India. The Nifty Bank index, too, rose 2.5 per cent led by IndusInd Bank and ICICI Bank.
However, the Nifty IT index slipped 1 per cent lower led by a fall in Tata Consultancy Services (TCS), which fell 3 per cent to Rs 1,920 on the NSE after the company reported a lower than expected revenue growth of 3.7 per cent in constant currency (CC) terms in September quarter on the sequential basis. The Street was estimating revenue growth of 4 per cent in CC terms for the quarter.
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