value investing

Was reading an interesting review this morning on forbes.com, a book called "The Guru Investor - How to beat the market using history's best investment strategies." By John Reese, (John Wiley & Sons 2009).

The discussion concerns Value Investing as practised by the likes of Warren Buffet, Peter Lynch and Benjamin Graham. Graham was an economist and professional investor who began teaching Value Investing at Columbia University in 1928. Buffet describes Graham as the most influential man in his life beside his father.

A couple of quotes seem to sum up where we are right now, especially with Unilife.

"Therein lies the guru's greatness. It's not that they've developed complicated theories that are unintelligible to lay people, or that they have some other-wordly ability to predict where the market will head. It's that they possess the discipline to withstand the assault the market makes on our emotions from day to day, and to focus on what they know is best for the long term."

As Peter Lynch once said, "Stomach is the key organ here, not the brain."

Or as Warren Buffet also said, "As far as I am concerned the stock market does not exist. It is only there as a reference to see if anybody is offering to do anything foolish."

Like those who sold Unilife yesterday at 23 cents because their emotions had over-ruled their reason.

(TDA, I think you posted a while ago that Warren Buffet holds Sanofi. He initiated holdings in November 06 and still holds.) Hmmm.

Obviously pure Value Investing relates to established companies that are undersold. But as the Motley Fool article said about Rule Breakers, it can also apply to emerging companies like Unilife, especially when they are backed by high quality blue chips like sanofi. And further out, when those recurring revenues start to flow, Unilife will transition from an emerging Rule Breaker play to a Pure Value Investment play.

All in all, I think we're very well placed, and in the very, very short term, (micro term, this week, next week, the week after?) we are going to find out just how well placed we are. My advice, (for what it's worth), learn from the gurus and keep those emotions under a tight rein....now is not the time to panic....