Value investing still useful?

[beta93]

It looks like the method that makes the most sense, by looking at average p/e, p/b, RoA, rising eps, book value ps for the last 10 years.

 

[Shiny Things]

Unfortunately value investing hasn't worked for at least a decade (in the sense of outperforming the market, either in an absolute sense or a risk-adjusted sense), and it's an open question as to whether it will ever work again.

Value investing was an amazing trade back in the mid-1900s, when Ben Graham was doing his thing, the Chuck and Wozza Show was making a bunch of Omaha housewives into squillionaires, and Seth Klarman was writing extremely collectible books. But the reason it worked so well was that getting basic information about companies was hard - companies could bounce along with lots of net cash, low P/E or P/B ratios, etc etc etc. for years, and nobody would find out about them, so it was easy to find companies that were still "undiscovered gems".

Nowadays, every muppet with a brokerage account can fire up the Finviz stock screener, set up a "value stocks" screen, and play at being a value-stock investor. You can even buy an ETF that does it all for you. The problem is, the nature of the value factor is that as it becomes easier to invest in, it stops working: stocks that would hit a value screen get bought before they show up on that value screen, so the only stocks that show up on value-stock screens are value traps.

This doesn't apply everywhere, though. You could persuade me that there's a few long-term value-stock gems to be found in the lower reaches of the SGX, for example (as long as you're careful to filter out the trashcos that are trapped in a chokehold of related-party holdings), and value investing in Japan is definitely becoming a thing.

But the stocks that usually show up on value screens—financials and mining stocks especially—are usually there for a reason. And until something happens to make those two sectors move: either a steepening of the yield curve (not gonna happen) or a huge rally in commodity prices (probably not gonna happen), you're not going to get much joy out of being a value-stock investor.

 

[thelittlemonkeye]

In the words of Bill Ackman: We try to find companies we like, with management we like at a price that we like.

What in the heck does we like mean? Value can mean very different things for different people. Its not just pulling out a stock screener with a P/E P/B filter etc etc like Shiny said.

 

[AlyssaGoh]

Still valid but I think almost impossible to find undervalue companies.

 

[Keng see]

any reco on undervaled stocks to buyt nao?

 

[mikelee7900]

In the words of Bill Ackman: We try to find companies we like, with management we like at a price that we like.

What in the heck does we like mean? Value can mean very different things for different people. Its not just pulling out a stock screener with a P/E P/B filter etc etc like Shiny said.

Think you hit the nail on its head!
Can tell who are good investors from their comments!

 

[ctan84]

Think you hit the nail on its head!
Can tell who are good investors from their comments!

You first time hear ang mo talk? They talk like got alot of "zen", but actually its just a string of illogical sentences and words.

 

[sohguanh]

You first time hear ang mo talk? They talk like got alot of "zen", but actually its just a string of illogical sentences and words.

Not only ang mo if you work in IT line with those South Asian also same. Meeting talk until got dragon got tiger but come later to implementation hmmm. Then post implementation review another round of dragon and tiger. It is such a pity they did not become lawyer but major in IT line instead.

 

[ctan84]

Not only ang mo if you work in IT line with those South Asian also same. Meeting talk until got dragon got tiger but come later to implementation hmmm. Then post implementation review another round of dragon and tiger. It is such a pity they did not become lawyer but major in IT line instead.

Its precisely that they cannot become lawyer tat they went IT. In law if you want to talk until got dragon and tiger, you got to substantiate with evidence, if not the judge will throw your case out and you will kanna warning and possible punishment if you repeat your stunts. IT no need evidence to talk until tiger can fly what.

 

[Perisher]

value define by ownself. don't blame others when you lose $$, don't need to praise others when you made money either. It's all your own decision.

 

[iceblendedchoc]

Just buy the index and forget it

 

[theMKR]

Just buy the index and forget it

now index ath liao.....

 

[BBCWatcher]

now index ath liao.....

1. We should hope that the global stock index periodically reaches new all-time highs. That's rather the point. Do you want to invest in something that never makes new all-time highs?

Here's the same "logic"... "Oh darn, I can't buy a landed property on Oxley Road for anything less than S$120,000. So I guess that means I'll never buy a house anywhere...." Doesn't make sense, of course.

2. No, it isn't at an all-time high. (This information is easy to check!) Using IWRD, the Irish domiciled/London Stock Exchange listed exchange-traded fund, as a reasonable proxy, the MSCI World Index is currently about 6% below its all-time intraday high (in U.S. dollar terms) reached on January 4, 2022. It's currently about 6.5% below its all-time high in Singapore dollar terms. It's possible the current index value will go lower, and of course it's also possible it'll never go lower.

 

[junlove]

Have an adaptive portfolio bah, very hard to predict one. The recent shake in tech stocks is quite significant... and momentum seems to shift to value stocks since last yr, will this continue?

I dunno sia, still watching the space...

 

[d5dude]

value define by ownself. don't blame others when you lose $$, don't need to praise others when you made money either. It's all your own decision.

Best reply on this thread. Every investor has his/her own method of determining value, there is no universal truth on this so do your own homework if you want to do stock picking, never rely on others to tell you how to identify value.

 

[beta93]

Ok thanks for all your replies, it still seems to work

 

[beta93]

Its precisely that they cannot become lawyer tat they went IT. In law if you want to talk until got dragon and tiger, you got to substantiate with evidence, if not the judge will throw your case out and you will kanna warning and possible punishment if you repeat your stunts. IT no need evidence to talk until tiger can fly what.

I am not sure why you have such discrimination against us foreigners. However, it is true that college graduates from overseas do speak better English than local Singaporeans for the most part, one should also be able to walk the talk else the bosses will also evaluate them badly.