Re: Four Ways To Use My Ideas
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he's not attempting to improve on buffet. he's attempting to exploit the same mispricings buffet looks for, but with a different method. he's not claiming that it's better than what buffet does.
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He claims it improves on what Buffett does (in the other thread), that Buffett would have higher returns if he incorporated David's approach. Let me make it clear I'm not convinced David is right or wrong yet, but I have biases that naturally make me skeptical of it.
I may write a letter to Warren Buffett just to see what he would say.
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He knows of me so I doubt he will dismiss my ideas out of hand. Here are a few specific contentions of mine that you should mention where I think he agrees with me and you are skeptical.
When he says he ignores the actual stock price, he means that as long as he considers it seriously out of whack, he has a good play. And he need not concern himself with the contention that in the long run, his profits will certainly be less substantial then they would be if his predictions, on average, were perfect. All he needs them to be is substantially different form the markets predictions and in the direction his predictions would indicate. He doesn't even have to be closer than the market's predictions in order to become a multi billionare. And in fact that is what actually has been the case.
(If he agrees with that, then he agrees that once he sees the price he must shade his prediction. Even if he doesn't realize it.)
2. The idea that pure analysis will get you a good estimate of the price of a stock regardless of the market price is only a reasonable idea for some major companies. The idea that it is important to try to figure out WHY the market is disagreeing with you is not just a good idea for "fulcrum" stocks. It is important for a whole slew of stocks. Any stock where there is any kind of a chance your analysis might have missed something. But IF you can figure out why the market is disagreeing with you, and you can EXPLAIN why it is misevaluating, you should be willing to invest even if the disrepancy between prices is smaller than usual.
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