Wednesday, August 13, 2008

Is Value Investing relevant? Part II

Those of you believe you should hang on to shares with single digit PE with hope of margin of safety will be dissapointed. Goldman Sachs sells 4.7 million of SAAG shares when it has single digit PE.

(The Star) KUALA LUMPUR: Goldman Sachs International disposed of 4.76 million shares of SAAG Consolidated from July 29-31, when the share price was trading near five-month highs.

A filing to Bursa Malaysia showed that it disposed of two million shares on July 29 and 2.16 million shares the next day. It sold 600,000 shares on July 31.

At the current share price of 46 sen, it was trading at price to earnings of 8.14 times.

I believe value investing is still relevant but we can't pretend we are all right when the value of our investment goes down ridiculously. The important areas will be position sizing and timing which I need to spend time reflecting.

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