24-06-2011, 12:46 AM
There're different styles of value investing. One is concentrating all the positions to just 5 positions like Buffett in 60s, or buying in the hope of 10+% growth and in which case, evaluating management would be pretty important. Another kind is buying 50 cheap things like Graham & Schloss, in which case they make no attempt to meet or understand management.
While written for the layman, it's still a shame that the original article did not go further to explain that low PE was not valid for their examples because they're contractors & developers with lumpy earnings.
While written for the layman, it's still a shame that the original article did not go further to explain that low PE was not valid for their examples because they're contractors & developers with lumpy earnings.