DaveinHackensack

@VIC: A Radically Different Context for Value Was Going On Outside

"So, at what point do we find "value"?"

One idea that comes to mind from reading Vitaliy Katsenelson's thesis about secular range-bound/bear markets: instead of considering a stock a value because it trades at a discount to market-average P/E multiples, look at what the market average P/E multiples were at the end of previous range-bound/bear markets. For example, after the range bound market ended in about 1950, the one year trailing P/E ratio on the S&P was 7x. So, theoretically, if you could find a stock trading at 7x today, and you thought that company's earnings were sustainable (a key point), that might be a value.

Buying Berkshire

Imagine what Berkshire would be trading at today had Buffett dumped all of his housing and financial stocks before the burst of the credit/real estate bubble. Judging from the posts on GuruFocus over the last couple of years, it seems like a fair number of individual investors got burned buying those stocks simply because they were trading for less than what Buffett paid for them.

Perhaps I'm alone in this opinion, but I think Berkshire would be better off if Buffett stopped investing in publicly traded stocks. Since he has constraints on his stock investing due to Berkshire's size, and since he himself has acknowledged that Berkshire will probably generate higher returns from its wholly owned companies going forward, why not just focus on those and special situations?

That said, I still own a few of the b-shares, and am fairly bullish on them. I think we'll see an upturn after hurricane season is over.

Six Positions I'm Bullish On

I bought BPT last year too. I've been reinvesting the big dividends in an IRA. No complaints.

Have you looked at this oil stock: EGY?