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Author: ZenvestorB Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 441  
Subject: Re: value method causing paranoia Date: 7/22/2001 2:29 PM
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Hi Howard,

I wish I only had a couple of instances (instead of the very many) where all indications said buy but I failed to make the purchase. And typically, these missed opportunities have done well.

But my impression is that because the value buyer is usually buying at a time when things are relatively bleak, these last minute doubts are going to be very natural and they do serve a purpose for rechecking the facts.

One thing that I do to minimize the "doubt" effect is to be very flexible in the proportions allocated to a purchase. For instance, I may plan on buying in at least a couple of lots. So I may initially start off with the intent of 50% first lot and 50% second lot but if I have some reservations, but the numbers still seem to work out well, I might go 40%/60% or even 30%/30%/40% for each lot purchase.

I guess other than that, I resign myself that occasionally these things are going to happen and unless the number becomes significant I let it go.

This portion from the book, "The Money Masters", by John Train has been helpful in that regard:

"John Neff became head of research for the bank's Trust Department. However, as a Graham and Dodd disciple he believed the best investments were the least understood by the market, and thus often found himself at odds with the Trust Committee, which preferred big-name stocks that would reassure the customers, even if they didn't make them money. His mentor, Art Boanas, was a dyed-in-the-wool fundamentalist, who insisted that the key to investment success was simply digging deeper than the next fellow, and constantly testing your figures. When you make up your mind, he said, stick to your conclusions; and above all, be patient. This style of investing became Neff's own and has served him well."

ZB
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