What This Value Investor Is Doing Now

It’s fun reading in value investing books about how stocks were trading at significant discounts to intrinsic value, but until one actually experiences it, we have no true sense of how the world looked at the time. The best way to explain it is to imagine a boy in North Carolina wanting to be a race car driver.  While he might dream of racing against Jimmy Johnson, “Junior” and the rest of the NASCAR crews, its not until he turns 18 and actually starts driving around at a speed of 200 MPH, that he will actually get that adrenaline rush.

What I have been doing?

In terms of the stock market, not much. Most of my time and cash are stuck with school and a business im starting up. I continue to read the WSJ before heading out to work or school and log in throughout the day.

Don’t lie!!!

Actually, I have been investing, but not at the rate as before.  You see, I have pretty much created a system where my portfolio is semi-automatic. First, I screen for stocks through the magic formula website. What I do is simple but effective.  First, I want to know which stocks are moving in and out of the screen ( You did not believe I post the details for no reason but to take up space, right?). From there, I use a 30 second- 3 step approach to separate the good from the bad. This will usually give me a list of 2-3 stocks to research over the weekend. Do some security analysis and decide to buy or do nothing.  Lately, I have been doing a lot less buying and more doing nothing. Whenever I do buy, the positions are very small and almost irrelevant.

How have my picks been performing?

Great!!! I will go into more detail at the end of the first quarter. To summarize, my magic formula stocks have been rockin’ while my financial stocks have been droppin.

A lot more interest in the stock market/economy

With the constant media attention, it seems everyone is talking about the economy. At school, students are very interested in the stock market and are scared to invest. As much as I try to tell them that right now might be the best time to get started, they are still hesitant. And that’s the very reason I am starting my business. It uses the magic formula to educate individuals about the market. Will it produce the next Warren Buffett? Who knows, but I do know (at least I hope) that it will be better than most things out in the market. But overall, it amazes me how many individuals have no idea how the market works but still give their retirement money to individuals just because they have “some knowledge” or a title. Shoot, if I’m going to take my car to a mechanic, I want to know what is he/she going to do, why is their going to do it, what warranty I’m I getting, can I expect this problem in the future? etc.. can’t answer my questions? I’m taking my business to a mechanic who will. There are ways to avoid getting ripped off (or scammed), “get educated”.