Wednesday, March 2, 2016

A guru's loss

Ackman’s loss is our lessons.

·         They have been preached in this book such as diversification.

·         Even with the best evaluation, sometimes we still lose.

·         Use mental stop loss.

·         Do not follow any guru blindly.

·         “Buy Low and Sell High” is better than “Buy High and Sell Higher”.

·         Do we want to buy VRX today at $65.45? As of 3/1/2016, P/E is less than 5 and P/FCF is less than 11. It seems to be a good buy but the Debt/Equity is about 5 times.

·         The insider sold almost 1 billion worth of the stock in June, 2015 – not a good sign for sure.

Do more research such as from Seeking Alpha and many other sources. When they resolve the problem, it could be a buy.

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