Lately due to the recent market correction, several stocks have become great value buys. Some of these might be known to you, while others are still relatively unknown. These stocks are great value, because they are being offered at less than half of what their assets are worth. Buying them today would mean that you are buying something which is worth at least two or even three times more than what you are paying for it.
Most people at this moment are filled with fear and thus letting value investors like me to buy in a very comfortable manner. These stocks which I am investing in are long term picks and should give average annualized returns approximately in the range of 35%-40% if we are extremely conservative. The power of compounding also must not be forgotten. For instance every $1650 invested in Wal-mart in 1971 would be approximately $ 3 million in 1991. People who create wealth do things that others don’t, and don’t follow the herd.
There are countless such examples, which prove good companies bought at cheap valuations can truly give amazing returns, irrespective of what analysts say. If we ask 5 analysts what they think about a particular company, we will get over 50 views. Each analyst will tell you something different every single day based on the stock price. I find it strange when some of these people come on TV and say, sell when the markets go below X and buy when they go over X. Why would somebody sell when things become cheaper and buy when they become more expensive?
Once again when I am buying stocks, I don’t like too much hype around them because it usually leads to unnecessary price rises. If I plan to accumulate a stock over a period of three to six months, I would rather hope prices go down rather than go up so I can buy cheap.
Based on the several requests I got, I have decided to let a select few of you invest with me only after making sure that you understand fully the fact that we will be investing in companies for the long term.
In case you are interested in investing, please send me an e-mail at email@example.com and do mention a bit about yourself, the amount of risk you are willing to take and the capital you are looking at investing.
Irrespective of whether you invest with me or not, I assure you that certain universal principles of investing in value on the basis of knowledge remain eternal.
Keep smiling and happy wealth creation!
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