MFG Fair Value, page-55

yes totally correct.
I a make plenty of mistakes, that's why I don't run concentrated portfolio's, and instead 'spray everywhere'.

Some will pay off, some won't. But overall my investment style has worked for me for over 20 years (lol I have outperformed the market). So why change??

I have no hesitation in cutting positions I hold, but that is normally when I figure out that my future estimates of company earnings are wrong. Otherwise I sit tight, or better yet dollar average downwards if Mr Market gives me the opportunity .(unless another better opportunity comes along, in which case I might reduce a position, to take a position in the other opportunity).

I am fluid, and non-emotional.

I just care about my bank balance, and my anticipated future dividends (Rockefeller: “Do you know the only thing that gives me pleasure? It's to see my dividends coming in.”)

I am an absolute investor, not a relative investor: so I don't really give two hoots about what the market is paying for a stock (as reflected in the share price). I just care about the price I buy a share for (relative to the absolute value of the underlying company) and the price I sell a share for (relative to the absolute value of the underlying company).

But most importantly relative to MFG:

Think about it for a moment:
All that has happened to MFG: shouldn't Mr Market have been factoring in these risks when the share price was much higher!!!
* Risk of FUM exiting
*Risk of FUM under performing
*Risk of MFG reducing its management fees

All these risks where always there. Its just when MFG was in an uptrend, nobody, including Mr Market focused on the risks. Everyone was captured by FOMO.

And then stage 2:
As the share price dropped from $60, people remembered that $60. They equated that $60 as being fair value, so when the share price dropped, they thought they were getting a bargain. There is a curious psychological trait amongst human beings that they take their cue of value from the historical share pricing past, rather than analyzing the underlying company value.

Just because a share was $60 and then drops to $40 does not mean the share is value at $40. It could have just been very overvalued and at $40 is just overvalued.


So now we are stage 3:
True fear and doubt.

The market is questioning everything.

And so now you see me

Price is what you pay, value is what you get.