Value Investing vs Value Trading?

[KopiKat]

Err...confusing to me..

maybe i'll just stick to "Buy Low, Sell High"!

That's a Trader's Battle Cry...

For Value Investors,

Buy When It's Under-Valued, Sell When It's Over-Valued

The Time Frame is also an important factor for comparing different investments based on Opportunity Cost.

In my case,

Buy When There's Value, Sell When There's No Value or Switch When There's Better Value (in another stock)

[CityFarmer]

Err...confusing to me..

maybe i'll just stick to "Buy Low, Sell High"!

That's a Trader's Battle Cry...

For Value Investors,

Buy When It's Under-Valued, Sell When It's Over-Valued

The Time Frame is also an important factor for comparing different investments based on Opportunity Cost.

In my case,

Buy When There's Value, Sell When There's No Value or Switch When There's Better Value (in another stock)

Well said...

[Temperament]

does value investment have to be long term in nature?

What if all of sudden, market recognizes the full potential of an undervalued company and makes it overvalued? Will you not sell because of concern of short term?

It does not make any sense that value investment implies long term.

to me value investment only means that I am investing into something undervalued by market, the investment timeframe has nothing to do with whether undervalued or not.

Absolutely! As long as you think you have made enough for this counter, sell. (Aka- You think now is almost peaked value who really cares how long.)

[a74henry]

Each investor has a time frame and an exit price (based on over valuation of say, PE = 200x).
The important key is not to lose money or not to lose more than you win.

[Retired@52]

Dear Salty,

I did not come across this term “Value Trading” when I studied for a Diploma in Investment.

In “Value Investing” we invest in a company that is underpriced to its value and sell it when it is overpriced then look for another company which is still under priced. You can call this “Switching”

In “Growth Investing” we invest in a company that has potential for growth and sell it when it reaches its potential and look for another company which still has potential for growth. You can also call this switching.

In retirement, we usually do more in Value Investing then Growth Investing because we need income.

I retired at age 52 and have not been working for the last few years. I do only Value Investment and not in Growth Investment & I do not trade. In this manner I do not need to look at the stock market all the time. I play golf twice or thrice a week and not concern much about the market movement.

[paullow]

good evening guys,

let me try.

value investing is like what many pointed out ie buying stocks which are undervalued by the market. I shall not discuss it more.

value trading is complex and most might at "unknowingly" do so at some point in time.

say two imaginary companies A and B.
at date T1, share A 70cents is trading at pb0.7 yield 5-6% pe 8-10. and share B is trading at pb1 $1 yield 5-6% pe8-10. Share A's vital signs appear more attractive.

at a later date T2, say share A $1.10 becomes pb1.1, yield 5-6% pe 8-10. and share B 80cents now trading at pb0.8 yield 5-6% pe8-10. Share B vital signs now appear more attractive.

=> so at date T1, a person buys 100lots of share A at $70k,
at date T2, share A is worth $110k and he uses all of it to buy 137lots of share B.

In simple terms, the trader would have a capital gain of $40k as well as a share gain of 37lots.

Thus, one is increasing his shares ie "soldiers" as well as his investment.

But this is RISKY and involves delicate analysis and comparison of two similar companies. Success would mean both capital gain and shares gains(compare it with pure value investing when one only gets capital gain)

Failure would mean getting stuck in either or both companies.

[Musicwhiz]

To me, "Value Trading" sounds like an oxymoron. But of course other forumers here may share their views and I will respect them, but for me the term "Value Investing" itself seems redundant; why not just call it "Investing"? Perhaps there is too much hype about so-called Value Investing such that people use it as marketing for courses and the media hypes it up incessantly.

Essentially, the philosophy for investing should always be a constant lookout for value. Value as measured by an objective assessment of the intrinsic value of a business, and ensuring there is a margin of safety should things go wrong.

[NTL]

good evening guys,

let me try.

value investing is like what many pointed out ie buying stocks which are undervalued by the market. I shall not discuss it more.

value trading is complex and most might at "unknowingly" do so at some point in time.

say two imaginary companies A and B.
at date T1, share A 70cents is trading at pb0.7 yield 5-6% pe 8-10. and share B is trading at pb1 $1 yield 5-6% pe8-10. Share A's vital signs appear more attractive.

at a later date T2, say share A $1.10 becomes pb1.1, yield 5-6% pe 8-10. and share B 80cents now trading at pb0.8 yield 5-6% pe8-10. Share B vital signs now appear more attractive.

=> so at date T1, a person buys 100lots of share A at $70k,
at date T2, share A is worth $110k and he uses all of it to buy 137lots of share B.

In simple terms, the trader would have a capital gain of $40k as well as a share gain of 37lots.

Thus, one is increasing his shares ie "soldiers" as well as his investment.

But this is RISKY and involves delicate analysis and comparison of two similar companies. Success would mean both capital gain and shares gains(compare it with pure value investing when one only gets capital gain)

Failure would mean getting stuck in either or both companies.

I am actually doing this! Mainly looking at the dividend returns vs current share price as the indication as I going for yields.