Australian (ASX) Stock Market Forum

Being contrarian can be very lucrative

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explod said:
One of the most valuable books I ever read for investment was, "Trend Following" by Michael Covel. I think it was published about 05, my copy is as usual on loan.

.
Click to expand...

One of the most valueable books I ever read was "The Intelligent Investor" by Benjiman Graham. It was published over 50 years ago, my copy is never lent to any one it sits pride of place in my study allong with "Security analysis" by Gramham and Dodd and on recomendation from Warren Buffett I have a copy of "An inquiry into the wealth of nations" by Adam smith, which I have just started reading.
 
frankbaozhu said:
All of you guys have good points. There are multiple ways to earn big bucks in the market. It is as true to a value investor as to a day trader. The only question is if you are good enough. To me, Mr. Warren Buffett is the most successful one ever in this business, and it makes sense to follow his lead. Why bother to try other stuff while the method to success has been tested over forty years?
Click to expand...

robusta said:
That is my aim. IMO the technique I am following is the closest I can find to Buffett's. I would appreciate any input positive or negative however.
Click to expand...

Guys Seriously!!

Buffett Bought Hathaway ---(The Whole Company) stripped it and turned it into something OF VALUE.
Buffett OWNS the Value.

He doesnt invest anywhere remotely close to anyone of us here.

HE OWNS things not INVESTS in.
When you CONTROL then your investing like Buffett.


It always amuses me when I see people convinced they're doing what Buffett does.
Not even CLOSE!
 
tech/a said:
Guys Seriously!!

Buffett Bought Hathaway ---(The Whole Company) stripped it and turned it into something OF VALUE.
Buffett OWNS the Value.

He doesnt invest anywhere remotely close to anyone of us here.

HE OWNS things not INVESTS in.
When you CONTROL then your investing like Buffett.


It always amuses me when I see people convinced they're doing what Buffett does.
Not even CLOSE!
Click to expand...


Long before Berkshire Hathaway Buffett invested in equities, to this day he still invests in companies like Wells Fargo, AMEX, Coke... in addition to the companies he owns outright. The investment decision remains the same - "do not own shares in a company unless you were happy to own the whole company"
 
tech/a said:
HE OWNS things not INVESTS in.
When you CONTROL then your investing like Buffett.
Click to expand...

Here is berkshires stock holdings,

American Express Co. (13.1%)
Anheuser-Busch Cos. (4.8%)
Bank of America
BYD Company (9.89%)[7]
Carmax (10%)
The Coca-Cola Company (8.6%)
Comcast
Comdisco (38%)
ConocoPhillips (5.6%)
Costco Wholesale
Diageo PLC
Gannett
General Electric
GlaxoSmithKline
Goldman Sachs
The Home Depot
Ingersoll Rand
Iron Mountain
Johnson & Johnson (2.2%)
Kraft Foods (6%)[8]
Lowe's Companies
M&T Bank (6.1%)
MidAmerican (83.7%)
Moody’s Corporation (19.1%)
NRG Energy
Nike
Norfolk Southern Corp.
Outback Steakhouse
Posco (4.5%)
Procter & Gamble Co. (3.3%)
Sanofi-Aventis (1.3%)
ServiceMaster
Shaw Communications
SunTrust Banks
Tesco (2.9%)
Torchmark (3.2%)
UnitedHealth Group
Union Pacific Railroad
United Parcel Service
USG (19.0%)
U.S. Bancorp (4.4%)
WABCO
Wal-Mart Stores Inc. (0.5%)
The Washington Post Company (18.2%)
Wells Fargo (9.2%)
Wellpoint

Yes they have a big list of wholly owned companies as well but I think WB would have a problem with some one saying he is not an investor
 
Berkshire made him
All you need is a Berkshire then you'll emulate Buffett.

A few here think they're Sorros!!

Me I think Im a Duck!
 
tech/a said:
Berkshire made him
All you need is a Berkshire then you'll emulate Buffett.

A few here think they're Sorros!!

Me I think Im a Duck!
Click to expand...

Warren Buffett to this day counts buying Berkshire Hathaway as one of his biggest mistakes ever.

He bought a stake in the company because believed it was worth I think $12 a share and he was buying it for $9 and there was a rumour there would be a management buy out.

The management approach buffet and offered to buy his stock, 2 moths later he got a letter from management offering him 50c less per share than they had aggreed earlier so he got a bit emotional and took over the company just so he could fire the CEO.

Once he had control of the company he ran it for 19 years as it limped along making a small amount of profit which he directed out to other investments. When it finally become stopped earning and slipped into loss he broke up the company for what he could.
 
Well ill be a Duck!

But just listening to Buffett.
Do people seriously think they can emulate the guy!
 
tech/a said:
Well ill be a Duck!

But just listening to Buffett.
Do people seriously think they can emulate the guy!
Click to expand...

I think any investor who puts in the time and effort to study Buffett and Graham and some of the newer practitioners such as roger montgomery will become better investors, having better returns and taking less risks.

For me personally when I started studing value investing it just made so much common sense to. aspects of it I had used for years, but it still felt like some one had turned a light on and suddenly I could see a different world.

But No you can't simply watch an interveiw with buffett and think you know all you need to know about investing. I think becoming an Investor is somthing that takes time and study and should be regarded as somewhat of a university course, but like any course you have to be studying the right texts.

Buffett himself learned by emulating Benjiman Graham, He read the intelligent investor when he was 19 and he said it changed his whole concept on investing.

He then went and studied under graham at columbus university and later worked as a securities analylist at grahams hedge fund.
 
Tysonboss1 said:
Here is berkshires stock holdings,

American Express Co. (13.1%)
Anheuser-Busch Cos. (4.8%)
Bank of America
BYD Company (9.89%)[7]
Carmax (10%)
The Coca-Cola Company (8.6%)
Comcast
Comdisco (38%)
ConocoPhillips (5.6%)
Costco Wholesale
Diageo PLC
Gannett
General Electric
GlaxoSmithKline
Goldman Sachs
The Home Depot
Ingersoll Rand
Iron Mountain
Johnson & Johnson (2.2%)
Kraft Foods (6%)[8]
Lowe's Companies
M&T Bank (6.1%)
MidAmerican (83.7%)
Moody’s Corporation (19.1%)
NRG Energy
Nike
Norfolk Southern Corp.
Outback Steakhouse
Posco (4.5%)
Procter & Gamble Co. (3.3%)
Sanofi-Aventis (1.3%)
ServiceMaster
Shaw Communications
SunTrust Banks
Tesco (2.9%)
Torchmark (3.2%)
UnitedHealth Group
Union Pacific Railroad
United Parcel Service
USG (19.0%)
U.S. Bancorp (4.4%)
WABCO
Wal-Mart Stores Inc. (0.5%)
The Washington Post Company (18.2%)
Wells Fargo (9.2%)
Wellpoint

Yes they have a big list of wholly owned companies as well but I think WB would have a problem with some one saying he is not an investor
Click to expand...

I just relised that Warren has a stake in Bundaberg Rum, who would have thought.
 
The reason I started posting on this thread is this Buffett quote

"Be fearful when others are greedy. Be greedy when others are fearful."

Buffett is probably known as a value or growth investor but he is also a contrarian investor.

When AMEX had a scandal with one of it's subsidaries the sp plunged that was the time to buy. In the middle of the GFC BRK were buying banks.

That is why after identifying extraordinary companies the best time to buy is when "bad" news hits.
 
robusta said:
The reason I started posting on this thread is this Buffett quote

"Be fearful when others are greedy. Be greedy when others are fearful."

Buffett is probably known as a value or growth investor but he is also a contrarian investor.

When AMEX had a scandal with one of it's subsidaries the sp plunged that was the time to buy. In the middle of the GFC BRK were buying banks.

That is why after identifying extraordinary companies the best time to buy is when "bad" news hits.
Click to expand...

When Buffett sees opportunity like the AMEX case

He can buy in such quantity and he now needs to.. That he can turn back the tide of fear..
And happy doing it he is too....

Can you ? IF not .. Then you run the risk of buying too early..

Say you saw the Amex opportunity... And you wade in the mkt to buy 100 shares
and after you finished buying what will happen ?
Is it likely you could have bought cheaper ?

Contrarian works best near the turning points
But Then its called good timing ( I am not talking about perfect timing )

Mr Mkt might want to sell 1,000,000,000s of shares
Now If you only want 100
You are not Mr Buffett Today''
You are maybe Mr Buffett when he was just starting out

With limited capital and no worry about getting filled

In Buying 100 shares it is not smart to fade Mr market
You have to work a bit more in harmony with him
And when he is exhausted ... Time your moves a little smarter

You have to be more a "Hitch Hiker"
and less a mover and shaker who decides now is the time to buy
and buys his 100 shares without taking a little more care



Motorway
 
Brilliantly explained, motorway.

In another forum, we have a young whippersnipper, who refers to WB to justify just about any funnymental nonsense he tries to emulate. And scoffs at any experienced trader that uses Analysis techniques - be they technical or fundaments - to try and read, then follow the Market Makers.

I don't want to send him here - not sure either Forum Admin would appreciate that; nor do we have the need for a disrespectful loudmouth in this place.
But if you don't mind, may I quote you next time he compares himself to WB?

Thanks heaps, Pixel.
 
motorway said:
When Buffett sees opportunity like the AMEX case

He can buy in such quantity and he now needs to.. That he can turn back the tide of fear..
And happy doing it he is too....

Can you ? IF not .. Then you run the risk of buying too early..

Say you saw the Amex opportunity... And you wade in the mkt to buy 100 shares
and after you finished buying what will happen ?
Is it likely you could have bought cheaper ?

Contrarian works best near the turning points
But Then its called good timing ( I am not talking about perfect timing )

Mr Mkt might want to sell 1,000,000,000s of shares
Now If you only want 100
You are not Mr Buffett Today''
You are maybe Mr Buffett when he was just starting out

With limited capital and no worry about getting filled

In Buying 100 shares it is not smart to fade Mr market
You have to work a bit more in harmony with him
And when he is exhausted ... Time your moves a little smarter

You have to be more a "Hitch Hiker"
and less a mover and shaker who decides now is the time to buy
and buys his 100 shares without taking a little more care



Motorway
Click to expand...

I have two things in mind after I read the your post. First, Mr. Buffett did not have the influence when he bought Amex in the scandal. Rather, he was a vague figure back then. Second, when something is cheap, it is cheap. Whether it goes up or down after your purchase does not change this fact. So if you buy cheap enough, why should you bother to worry if it will go down another 20%?

In investing, being big like Mr.Buffett is a curse rather than blessing. If you ever had run large sum of money, you will know it is not easy to run them.
 
Tysonboss1 said:
I think any investor who puts in the time and effort to study Buffett and Graham and some of the newer practitioners such as roger montgomery will become better investors, having better returns and taking less risks.

For me personally when I started studing value investing it just made so much common sense to. aspects of it I had used for years, but it still felt like some one had turned a light on and suddenly I could see a different world.

But No you can't simply watch an interveiw with buffett and think you know all you need to know about investing. I think becoming an Investor is somthing that takes time and study and should be regarded as somewhat of a university course, but like any course you have to be studying the right texts.

Buffett himself learned by emulating Benjiman Graham, He read the intelligent investor when he was 19 and he said it changed his whole concept on investing.

He then went and studied under graham at columbus university and later worked as a securities analylist at grahams hedge fund.
Click to expand...

I could not agree more. It takes time and efforts to be really good at everything. I do not think anyone is identical to anyone else, and this is true in investing too. But I saw one common trait among those successful ones: THEY WORKED ****ING HARD TO BE WHERE THEY ARE!
 
Second, when something is cheap, it is cheap. Whether it goes up or down after your purchase does not change this fact. So if you buy cheap enough, why should you bother to worry if it will go down another 20%?
Click to expand...

Its only cheap --- relative to the current information.
Often cheap is what its worth to the market and as price drops cheap becomes cheaper and can and often does find its REAL value at the "Cheap" level.
Ducati a poster here did a 2 yrs challenge on the "Value" investing theme. He's no Fundamental slouch.
Went broke in that time. The very lengthy thread is here somewhere on the forum.

But I saw one common trait among those successful ones: THEY WORKED ****ING HARD TO BE WHERE THEY ARE!
Click to expand...

I Dont know I saw another --- they worked damned SMART!
 
why should you bother to worry if it will go down another 20%?
Click to expand...

Who said the price you pay determines your future return ?
And what about the base ball analogies of waiting for the right PITCH

and why worry so much about Mr Market ?

Why :) why ?

because The price you pay determines your future return

Motorway
 

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