Friday, June 10, 2011

Value Investing

This blog almost entirely focuses on short term technical analysis. To provide a change of pace and a real treat, for the weekend I present a lecture by Whitney Tilson, a value-based hedge fund manager. The lecture beings during the second minute, and the first 55 minutes comprise the introduction to the principles and strategies behind value investing that I would like to share.

To quote a friend of mine, who is a value investor, but worked as a prop trader,"[Technical] ideas typically lack scalability, tax advantages, and require high commission or leverage costs. Compounding using the value approach is extremely scalable (e.g. Berkshire Hathaway), has tax advantages due to long-term capital gains rates, and requires much lower total commission costs."


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