Let me present a few of my impressions associated with the downside of being a value buyer. Personally, I don’t consider myself a value buyer but am heavily affected by it; I consider myself a contrarian with a value tilt. Now, this is of a value investor varies but one common feature I find in value investors is their avoidance of macroeconomics. This is actually the reason behind the major downside to value investing. Pure value traders do not pay much attention to macroeconomics because you can’t ever forecast the future–which is precisely what the majority of macroeconomics deals with. Who really understands if things are going to be much worse now than before?
We are just pretending to be soothsayers, are we not? The macro picture still gets into the investment decision of value investors but usually with a lesser emphasis. Warren Buffett, for example, doesn’t care, and attention what the Federal Reserve will or what the future expectation of GDP development in China is, but he reads a great deal of industry publications (supposedly). So, he gets a feel for the macro-picture from industry styles actually. The downside of ignoring the macro-picture (or at least not putting much weight into it) is that you’ll invest in seemingly questionable assets than can inflate. In addition, value investors have a tendency to miss “macro developments” which can produce hugely profitable investments.
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- Verify an example of trust creditor amounts back to customer files
- 2018 $6,443.00 2.4% $1,285.00 3.2%