Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality

Iraq Dinar/News is a popular topic among many topics this board offers.

See the footer of the board for our Facebook and My business pages.

Be sure and join our Dinar Only Newsletter Email list. It is located on the right. Your User Account Email when joining the board is for with in Neno's Place use of board information which you can control in your profile settings.


For "Advertising" with in my board to our Membership and Visitors see our "Sponsor Ad Info" in the Navbar. Neno's Place receives a low of 50,000 views a week to over 100,000 plus many times thru out the year.

I can be reached by phone or text 7am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.
Established in 2006 as a Community of Reality

Longest Dinar holding Community. Reach Admin by Private Message. Copyright © 2006-2017

Ad Space M-1

Board Rules

October 2016


Calendar Calendar

Ad Space M-2

Revv Worldwide

IQD/Oil/Commodities Charts


Ad Space M-3

Top posting users this week

Top posting users this month

Ad Space M-4

Is Value Investing a Safe Bet?



Posts : 16630
Thanked : 808
Join date : 2013-01-12

Is Value Investing a Safe Bet?

Post by Lobo on Wed 10 Aug 2016, 7:08 pm

QUESTION: What do you think of value investing?
ANSWER: As with everything, a cycle that you have to understand will unfold. Everything will move to extremes on both sides and you must understand the driving forces. Look at the PE Ratio. People write in and say I am wrong and the market must crash because of the PE Ratio. Everybody is wrong at some point in life. That is how we learn from our mistakes, which we call “experience.” If you assume such stagnant relationships are always fixed, well, you have a lot to learn.
Value investing works for the majority of the trend in general. However, that view typically looks just at earnings. As illustrated at the top, I used these charts during the 1980s and was blamed for creating the takeover boom. Why? Forget earnings. The book value of assets were ignored after the Great Depression so the low in the Dow Jones Industrial shares was 1977. You could buy a company, sell its assets, and triple your money. So looking just at earnings did not identify the takeover boom when the Dow rose from 1,000 to 6,000.

Now look at the PE Ratio. Here a second cyclical trend emerges. Note that the high in the PE Ratio exceeded 120:1 during the panic into 2009. Why? For the very same reason that interest rates are NEGATIVE on 10-year German bunds. People are uncertain about the future so they are willing to park money with ZERO return. This proves that “value investing” is just like everything else. Sometimes it works, and sometimes it does not. EVERYTHING is cyclical. There is a time to buy and a time to sell.
The trend where people hoard cash can be seen in the trading volume of the S&P 500 where the peak remains 1996. When confidence shifts and people wake up and say, “Oh shit!” you will see things go crazy like never before. There is no panacea for value investing based upon PE Ratios and “value,” for there comes a time when people are scared of the future and want to park.
Anyone suggesting differently is either fooling themselves or trying to fool you. Piling into the assets to preserve capital will become the name of the game.
This is not some wild theory that is isolated to a single event such as the German hyperinflation. This is a major shift in confidence that is historically consistent.

    Current date/time is Thu 27 Oct 2016, 1:48 pm