Value Investing

So far in October the U.S. Stock market indexes has risen about 14%, a good month. Remember my statements about 1,000 points lower on the Dow Jones Industrial Average, that now was a great to time to buy a mutual fund that invests in U.S. Stock. At the time, many people thought that I was a little crazy. The people who continued to contribute to their retirement account have been rewarded for their persistence. This is an example of value investing. First is the weekly recap from Vanguard. Lastly, are some quotes for your enjoyment.

Vanguard

Signs of progress on Europe's sovereign debt crisis and solid, but unspectacular, GDP growth in the United States sounded hopeful notes in a week of otherwise mixed signals. The S&P 500 Index rose 3.8% to 1,285 (for a year-to-date total return—including price change plus dividends—of about 3.9%). The yield on the 10-year U.S. Treasury note increased 11 basis points to 2.34% (for a year-to-date decrease of 96 basis points).

Value Investing

Value investing is when an investor views a decline in an asset as a potential buying opportunity rather than a time to panic. Some research is needed to know if it is a buying opportunity or a change in climate. It is important to look at the situation from a few perspectives.

Perhaps the most difficult thing about being a value investor is to buy when your emotion says to sell and to sell when your emotion says to buy. The best time to buy an asset is when it is a good value and when experts in the news media are saying how bad things are and that things are going to get worse. Conversely, the best time to sell an asset is when experts in the news media are saying how good things are and that things are going to get even better.

Interesting Quotes

An American went to Scotland and played golf with a newly acquainted Scottish golfer.
After a bad tee shot, he played a "Mulligan" which was an extremely good one.
He then asked the Scottish fellow, "What do you call a Mulligan in Scotland?"
"We call it 3."

A 2:00 am Police Stop: An elderly man was s stopped by the Knoxville, TN police around 2 a.m. and the officer asked him where he was going at that time of night. The man replied, "I am on my way to a lecture about alcohol abuse and the effects it has on the human body, as well as smoking and staying out late." The officer then asked, "Really? Who is giving that lecture at this time of night?" The man replied, "That would be my wife!"

"It’s not important who starts the game but who finishes it."-- John Wooden

“It is not sufficiently considered in the hour of exultation, that all human excellence is comparative – that no person performs much but in proportion to what others accom-plish, or to the time and opportunities which have been allowed them.” Samuel Johnson

“Life’s like a play – it’s not the length, but the excellence of the acting that matters.” Seneca

“The way to achieve success is first to have a definite, clear, practical ideal – a goal, an objective. Second have the ne-cessary means to achieve your ends – wisdom, money, mate-rials and methods. Third, enlist all your means to that end.” Aristotle

“Do not spoil what you now have by desiring what you have not – but remember that what you now have was once among the things you only hoped for.” Epicurus

“A great part of courage is the courage of having done the thing before.” Emerson

“If you’re strong enough, there are no precedents.” George Bernard Shaw