Re: Buy Good Value and/or What Other People will Like?
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Can you clarify this?
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I know you weren't asking me, but I'm hoping DC will chime in also so I'll go ahead and sound off briefly....
Like you believe strongly in Monsanto, I believe strongly that Progressive will continue to take market share over the next couple of decades. So I might be more willing to buy this stock at only a, say, 10% margin of safety, whereas I might require a 30-40% margin of safety on (a low-margin, low-growth business like) Fresh Del Monte, which won't have as high a growth rate. For PGR, I'd buy in expecting to hold on for many, many years and try not to take any capital gains, whereas I'd be aiming to exit FDP as its stock price approaches intrinsic value and go ahead and pay the taxes. Paraphrasing Mr. Buffett, it's better to buy a great business at a good price than a good business at a great price.
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I feel like you're calling growth of the business (like revenue growth) growth in intrinsic value. The intrinsic value should account for revenue growth already. Basically what I'm saying is that barring any material changes to the business the intrinsic value should not change.
Are we just using different terms here or do you disagree with that?
Also, your quote at the end is a Munger quote and "good" is supposed to be "fair". [img]/images/graemlins/grin.gif[/img]
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