The_Value_Investor

5 Keys to Value Investing Profits

Great write-up! Both comments above have nothing to do with value investing!

Patience really is a virtue in investing, often times when you have people such as investors to answer to you can't hold things as long as you want due to many investors and managers short-term focus. I bought Walter Industries(WLT) in June of 2007 for $32/sh. Despite managements near term shaky outlook I held it as shares plummeted to $23 as Pirate Capital sold out of it. By exercising patience I was able to enjoy the upward ride when Cerberus bought in along with many other investors. I sold it in May of 2008 around $80, before the peak but still more than double my money in less than a year b/c of patience.

Rebalancing is a tricky question. I prefer bottom up analysis so I don't tend to rebalance as often as others by letting good buys determine my mix rather than the broader markets views.

I also am a huge believe in consistency. Throughout the 90's everyone hated value guys. They weren't getting the #'s that growth and tech guys were, but in the long run, value wins out, and managers that tried to let the markets dictate their style lose out. Stick to what you know, don't back down.

And do make sure you know what cheap is.