Monday, October 20, 2008

Value Investing?

I read from CNN (sorry forgot the exact date and article) about advice given by warren buffet that the time has come to buy stocks as the stock price is cheap or under value.

I really fancy this guy, since my ex MBA lecture Associate Prof. Dr. Rokiah mention his name and investment style in the class. I adore him and even buy his value investing approach. What is value investing? to wrap it up , this strategy is about looking at the undervalue stocks i.e. the real price is much more lower than the market price. To determine real price, Warren will do assessment base on fundamental analyses approach with a medium to long term view. Once the decision has made, he won't sell it regardless of market condition as he sees market as the place of people spreading rumours (lies?) and manipulate the market. Fundamental is what more important then the temporary / short period price volatility. For me, this is in line with Islamic investment approach. You should not gambling but should invest. Sometime (frequently ) people act irrationally and influence by the panic scenario rather then looking at the fundamental of the company. Yeah market change and we have to act quickly. But are we act base on fundamental basis or sentiment?
Back to Warren Buffet advice , that it's a time to buy. Sorry sir, I respect you and adore you, but I don't think now is the right time to buy. Why? Only very few people who really assess fundamental. Majority , even academician behave base on market sentiment. Don't you forget sir, what is technical analyses is base upon? Dow theory..... all factors will be discount on the price movement .... .

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