Subject: Re: Reversion to .....mean? S&P?
I've met Clapham and took a mini-course he taught in Omaha last year. It was good information on techniques for assessing little stuff in the public financial information that can signal bigger adverse stuff happening within a company.

Buying the dip recklessly without study has never been advisable, yes? The period since 2009 has rewarded more broadly the buy the dip strategy without much deep stock analysis in part because the US stock market has been favorably bolstered by the net positive funds coming into the market day-after-day. It has been a long time since the financial conveyor has operated in reverse (more monies going out than coming into the market). Many sharp minds are voicing thoughts about the financial conveyors signaling a reversing. There are also scientific minds saying the North and South Poles are close to a reversing, too. Who knows what adverse complications the reversing of the Poles will create. We are to adapt to our conditions be they physical or fiscal. This is why we read each other's comments on this board to find ways to adapt. Additional information: some scientists today say Darwin's comments about "survival of the fittest" was meant to convey "survival of the best adapted".

The 1970s to early 1980s (1982 end point) were simply horrible in terms of overall market valuation growth amid an inflationary period (you could make the case stocks went down considerably more than the historical record shows when discounting for inflation's effect on the dollar). Still, there were numerous investors who made great valuation gains in their portfolios via buying quality companies at cheap prices, harvesting dividends and holding on until valuations returned to normal. We have seen more recent periods where the market languishes and yet sharp investors have bought quality companies when they were cheap and benefited over the long haul. If one has studied a company, its market, its competitors, its management, its products/services, its internal growth in people and products and the like and feels it is a worthy long-term buy and hold, then buying on the dip is warranted.

Is that not the philosophy of most of the participants on this forum board to identify quality companies at fair prices and then to hold onto those companies until a future day when the investment will be sold for retirement funding or given away to family members or charities (and a portion to our silent partners: Federal and State tax authorities)? I say we have fun and make some long term money by studying companies, finding those worthy of our investment when they meet our Margin of Safety threshold aspects and loading up when Mr. Market has a bad day or group of days.

Uwharrie