Saturday February 13, 2010
As editor and publisher of Hidden Values Alert, Charles Mizrahi is an expert at uncovering value stocks that consistently beat the market. Drawing on more than 25 years of experience as a floor trader, money manager, investor and businessman, he has established a successful track record of picking stocks that are ready to soar.
Using his 5-Point Value Approach, Mizrahi focuses his efforts on seeking out value stocks with market caps below $5 billion.
In addition to being the editor of the Hidden Values Alert newsletter, Charles Mizrahi is also the managing partner of CGM Partners Fund, LP. He is widely quoted in the financial media and his latest book is Getting Started in Value Investing (Wiley 2007).
Charles also a member of Toastmasters International, for which he founded a club and served as president and area governor. He currently holds the rank of Advanced Toastmaster-Silver. He is an avid reader of history and biographies. Charles enjoys reading annual reports, 10-K's and anything by Warren Buffett, Charles Munger or Benjamin Graham.
Charles focuses his efforts on seeking out companies with market caps between $500 million and $5 billion that are selling below their intrinsic value. His ultimate goal? To deliver a market beating return to his subscribers over the long haul.
The 3 Greatest Value Investing Lesson according to Charles Mizrahi ...
Great value investors over the past 70 years followed the lessons of Benjamin Graham, Warren Buffett’s teacher. When searching for hidden values keep these 3 things in mind:
It's not a blip or a wiggle: Many buyers of stocks forget that what they are buying is an ownership interest in an actual business, which had an underlying value. Investors confuse a rising stock price with a healthy and vibrant business.
By forgetting that stocks are actually pieces of a real business, intelligent people turned the stock market into a casino by buying what was rising and selling what was falling. Value investors buy undervalued assets and sell them when they become overvalued.
Mr. Market is mental: Graham created a metaphor for the daily ups and downs of the stock market and named it “Mr. Market”. Mr. Market is a manic-depressive and is not a very good appraiser of businesses.
When stocks rise, Mr. Market gladly pays more than their value, and when stocks fall he will unload stocks for much less than their worth. When Graham was asked what holds most investors back from achieving success in the stock market, he said, “The primary cause of failure is that they pay too much attention to what the stock market is doing currently.” Take your eye off the stock market and keep your eye on the company.
Price is the biggest factor: Graham warned that, “Really dreadful losses always occur after the buyer forgets to ask, ‘How much?’” A great company can be a lousy investment if you pay too much for its stock. Buying a great company is no guarantee of high returns; you need to pay the right price too.
Who are you?
Who makes money over the long term in the stock market? There are two classes of investors in the stock market: speculators and owners. The majority of stock investors are speculators. They base their investment decision on emotion, buy stocks that are rising and sell stocks that falling, buy dozens of stocks hoping to make a killing and pay high prices and get very little value.
Owners make up a tiny minority of investors. They base their decisions on logic and rational, pay bargain prices for quality companies, buy as prices fall and sell when prices rise and hold a concentrated group of stocks that, like fine wine, get better over time.
Which class do you think creates long term wealth? Owners, far and away are the investors that see their brokerage accounts go up over time.
What Has Worked In Investing
A study was done by an old line investment firm on what has worked in investing. They did 44 studies over several decades of data and came to one conclsion: value stocks provided the best returns over long periods of time. Over the past forty years value stocks have outperformed growth stocks by almost double!
Come and join me and stop buying stocks like your lottery tickets, hoping to make a big score. Become a subscriber to Hidden Values Alert and start using the stock market to build wealth. Start thinking like a value investor and increase your account with less stress. Your journey to becoming a value investor begins today...with a subscription to Hidden Value Alert.