What is really challenging about value investing?

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#11
(28-01-2019, 11:38 AM)specuvestor Wrote: If the question is "What is really challenging about value investing", then I think it is 1) patience and 2) conviction

1) You can have the mind of Buffett but does not have his patience then it is not going to work. Even Elliot's Argentina bonds reap full benefit only after more than 10 years. What is your timeline? Different timeline will give very different results even if the analysis of the same stock is the same

2) Conviction comes from how much one knows or study the company. If it is just by hearsay even in VB forum, which is already miles ahead in terms of noise filtering, then conviction level is low when noises comes in. Conviction does not mean stubborness though. Like Keynes said" When the facts change, I change my mind. What do you do, sir?" Conviction based on facts will change when facts changed, but one has to know the facts first.

I agree. I think conviction is a result of expertise, and expertise comes from years of honing skills to be an 'authority' in a particular field. For example, I know of a person who retired early after investing big in SSDs, this person spent his entire career in the tech industry and worked for a fortune 500 company for many years. So its not surprising that he knew that industry better than anyone else and bet big when opportunity came.
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#11
(28-01-2019, 11:38 AM)specuvestor Wrote: If the question is "What is really challenging about value investing", then I think it is 1) patience and 2) conviction

1) You can have the mind of Buffett but does not have his patience then it is not going to work. Even Elliot's Argentina bonds reap full benefit only after more than 10 years. What is your timeline? Different timeline will give very different results even if the analysis of the same stock is the same

2) Conviction comes from how much one knows or study the company. If it is just by hearsay even in VB forum, which is already miles ahead in terms of noise filtering, then conviction level is low when noises comes in. Conviction does not mean stubborness though. Like Keynes said" When the facts change, I change my mind. What do you do, sir?" Conviction based on facts will change when facts changed, but one has to know the facts first.

I agree. I think conviction is a result of expertise, and expertise comes from years of honing skills to be an 'authority' in a particular field. For example, I know of a person who retired early after investing big in SSDs, this person spent his entire career in the tech industry and worked for a fortune 500 company for many years. So its not surprising that he knew that industry better than anyone else and bet big when opportunity came.
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