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The business of value investing – Six essential elements to buyingcompanies like Warren Buffett- Charlie Tian 2009
https://bbs.pinggu.org/thread-695143-1-1.html(Page 153-167)
Discipline is simple but rarely easy
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Indeed, in 1973, Buffettbegan buying shares in the Washington Post for Berkshire Hathaway. Based on ahistorical stock chart in The Warren Buffett Way by Robert Hagstrom, shares inthe Post declined after Buffett ’ s purchase, and it took more than a year forthe company ’ s stock price to surpass Buffett’s purchase price. Regardless,Buffett is just an example of the bigger picture for investors. All too often,the terms “luck” and “skill” are tossed around the investment fieldinaccurately. The truth is that investment skill will always lead to certainmoments of luck, but in the long term, luck simply cannot last long enough toproduce a consistent, profitable result. The Investor B of the world are oftenconsidered to be more skilful than the Investor A. That’s a misguided view. Inthis case, both classes of investors have skill. The point to understand isthat very few investors will ever buy at the bottom. Investor B, while a skilful,prudent investor, merely got lucky by purchasing a security at the bottom. Investor B realizes thisand understands that in the future, he will miss the bottom more often thannot. In both instances, he is investing based on intrinsic value assessments,not on market volatility.
Investor A also realizesthat she is no less skilful an investor because Mr. Market has suddenly decidedthat the business is “worth” half of what she paid. In fact, Investor Awelcomes the decline because it offers an evenbetter bargain investment. Again, she makes the investment solely on the basisof intrinsic value, not Mr. Market’s value. Just as having the discipline tosay no is crucial, it is equally important to know when not to split hairs. Ifa business is truly a good investment, it makes no difference whether youinvest at 32 or 33 or 34 a share. Your qualifications as an investor aren’t weakerif you deliver 15 percent returns while the other guy earns 18%. If you’relooking to buy a private company with strong earnings and growth power and youroffer is 500 million, you’re not going to walk away from it at 520 millionif you ’ re reasonably confident that the business will be earning more profitsseveral years into the future. You should apply a similar mind - set when buyingpartial ownership stakes in public companies via the stock market. Attemptingto bottom fish often produces the opposite result and ultimately leads toinvestors paying a higher price for the stock than they would otherwise have.As an investor decides for to wait for a 32 stock to reach 30 before buying,one of two mistakes may occur. The first is that the target price to investstarts to move. Once the stock reaches 30, the investor now decides to waituntil 29. As this train of thought continues, the approach no longer is aboutinvestment but about market timing. In some cases, investors can get lucky, butin taking on this unnecessary element of luck, they may miss out on a bargaininvestment. Or worse - and the source of the second mistake — the investor endsup paying more for the stock, and the future returns are no longer satisfactory.Being a disciplined investor cuts both ways. Anchoring is a common mistake ofmany investors. The concept relates to investors fixating on the price to payfor a share of stock. Price does matter but only in relation to the assessedintrinsic value of a company. Because value investors often seek investments sellingat significant discounts to intrinsic value, anchoring on a set price oftencauses more harm than good as it leads to many missed opportunities. Indeed,prices do matter. A 12% loss is much more severe than a 6% loss. But comparingthe expected gains if the security appreciates with the potential losses confirmsthat if an investment is made in a quality company with a comfortable margin ofsafety, price anchoring can do more harm than good. One final note: Thepercentage difference between paying 32 or 34 (6.2%) a share versus paying 9 or 11 (22.2%) can be very significant in determining overall investmentreturns. While all investments should be made with respect to price paid versusintrinsic value received, price differentials are meaningful with smaller numbers.Trying to bottom fish is difficult and may cause more damaging than potentialgain.
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A disciplinedapproach may be simple enough to follow, but it is not an easy thing to do. It’ssimple because you don’t need to have a high IQ or super - analytical skills tobe a disciplined investor, but it ’ s not easy because you are battling againstyour emotions and Mr. Market. When it comes to bull markets, no one wants to beoff the boat when it ’ s riding a rising tide. Emotions have a way of being one-sided when the mood is jubilant. People often forget about the long - termgoals of investing when everyone seems to be profiting in the short term.Writing in 1776, Adam Smith defined what he called “the trade of speculation.”According to Smith: The speculative merchant exercises no one regular,established, or well - known brand of business. He is a corn merchant this year,and a wine merchant the next, and a sugar, tobacco, or tea merchant the yearafter. He enters into every trade when he foresees that it is likely to be morethan commonly profitable, and he quits it when he foresees that its profits arelikely to return to the level of other trades. His profits and losses,therefore, can bear no regular proportion to those of any one established andwell - known branch of business. A bold adventurer may sometimes acquire aconsiderable fortune by two or three successful speculations; but is just aslikely to lose one by two or three unsuccessful ones. Smith concludes that suddenfortunes and sudden losses were the equally likely results. His definition ofspeculation agrees very closely with that of an “investor” who exercises nodiscipline in security selection. Investing should always be about capitalpreservation first and capital appreciation second. Having the discipline tosay no is a key part of successfully adhering to that approach. Value investorsare not bold adventurers; that is, not with respect to investment approach.

充实每一天 发表于 2019-3-4 05:11
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充实每一天 发表于 2019-3-4 05:11
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Fault tolerance and failure isolation
A system is said to be fault tolerant when it is capable of operating even if some of the pieces fail or malfunction. Typically, fault tolerance is a matter of degree: where the level of sub-component failure is either countered by other parts of the system or the degradation is gradual rather than an absolute shutdown. Faults can occur on many levels: software, hardware, or networking. A fault tolerant piece of software needs to continue to function in the face of a partial outage along any of these layers.
In a blockchain, fault tolerance on the individual hardware level is handled by the existence of multiple duplicate computers for every function—the miners in bitcoin or proof of work systems or the validators in PoS and related systems. If a computer has a hardware fault, then either it will not validly sign transactions in consensus with the network or it will simply cease to act as a network node—the others will take up the slack.

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