Comments on: You don’t need to know if a person weights 250 or 400 pounds to see that they are fat.-Warren Buffett

By: Weekly Links: Carnivals & Articles - December 28, 2008 | Dividends Value

Fri, 06 Feb 2009 19:57:02 +0000

[...] presents You don’t need to know if a person weights 250 or 400 pounds to see that they are fat.-Warren Buff… posted at Contrarian Value [...]

By: palpen

palpen — Mon, 12 Jan 2009 00:44:35 +0000

It show just how much influence Graham had on Buffett. That saying was a variation of what Graham said in Security Analysis.

“To use a homely simile, it is quite possible to decide by inspection that a woman is old enough to vote without knowing her age or a an is heavier than he should be without knowing his exact weight”

By: Victor Chen

Victor Chen — Thu, 08 Jan 2009 04:52:59 +0000

Very insightful points…I also agree that DCF and value stock analysis has its traps. I discovered that in this depressed economy that lots of stocks are cheap by price ratios, but many are companies that have their current assets overvalued. For example, commodities companies that have inventory that is no longer worth as much as when their book value was calculated in the past. Another wrinkle in the equation is when earning estimates are too high, and were not appropriately decreased, thus giving the illusion of a low P/E ratio. Essentially, it does not matter how much a company’s assets are worth, if because of the down economy, there is no demand for their products.

By: Recommended Reading - Dec 18,2008 | Old School Value

Recommended Reading - Dec 18,2008 | Old School Value — Fri, 19 Dec 2008 08:20:09 +0000

[...] You can tell a 200lb or 450lb man is fat presented by Contrarian Value Investing [...]

By: Jae Jun

Jae Jun — Mon, 15 Dec 2008 04:19:13 +0000

Very true. I can also boast that I’ve made some pretty stupid decisions with companies that appeared cheap but were really value traps.

Conversely, the companies that were truly truly cheap, I missed out because I was thinking it wasn’t cheap enough.

It’s also funny how the companies that are not cheap with my DCF calculations are actually the ones that are the cheapest and with the best prospects.