Thursday, May 8, 2014

The Maleficent Side Of Value Investing

Maleficent vs Value Investing
I am sure you know that Maleficent is the villain figure in one of the most popular fairy tale, The Sleeping Beauty. It is also the movie title of the upcoming 3D blockbuster (to be exact, Maleficent will be released on 30th May 2014).
 
In the upcoming movie, the fairy tale retold from the angle of Maleficent, just to prove that everything happens has two sides of the story. For example, in Value Investing, we might be brought to believe (and it is true) that as long as we do our part in performing the necessary Fundamental Analysis, it is like a sure-win investment as long as we can hold the stock for long term (in say more than 5 or 10 years). But the Maleficent (read "evil") side of it is that you need to suffice the following parameters before the returns make sense :
 
1. Committing size able capital for such a long period of time;
2. Able to withstand the market noises, mentally;
3. Potential opportunities costs in holding for such a long time;
 
I guess that's the reason why not many people can be Mr Warren Buffett and frankly, it is not easy to be one without his level of leverage and commitment.
 
Cheers! 

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