Valuation is useless to traders because we only care about capital gains. When we buy, we buy because we expect price to go higher. As long as price keeps going up, the stock's fundamental value is irrelevant.
You can see that the trader's approach is different from Warren Buffett's investing philosophy. When Buffett buys, he expects to hold "FOREVER" (unless the business suffers a substantial change unexpectedly e.g. Moody's). This means he does not lock in any capital gains, he does not care one bit if price goes through multiple cycles.
This brings up an important question. How many people have a mentality like Buffett's? I don't know any.
I know many people think they are investing like Buffett, but the reality is they are not as good as Buffett, they do not have the same skill, nor the mentality, and it is no surprise that they do not get the same results. People should realise it is extremely difficult to imitate Warren Buffett.
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