What are you buying today?

[Palantir]

I have not purchased any stock besides Microsoft this past year and a half. If I had any desire to average UP, I would buy a lot more MSFT. However I really like the gains and feel like buying here isn't going to work in my favor!

MSFT was a good investment in the mid/high 20's and I look forward to the dividend increases. I treat it like BRK.B, its a money market account that just happens to kick ass

Yep...I wish I had bought more, there is so much potential in this company that is being unlocked. Maybe Steve Ballmer can do a monkey dance and create a buying opportunity.

[writser]

The idea of stop loss orders is imo ridiculous to begin with: why would you want to sell when something just became cheaper?

Visit the RIMM thread.

Intrinsic value is a moving target, like an ocean wave...

What is your point? If RIMM opens 30% lower you want to sell your long-term investment automatically?

[Palantir]

Rimm's "intrinsic value" is likely dropping....why would you buy more? People seem to assume that IV is fixed and certain while price is variable....but IV seems to be pretty variable when it comes to these tech stocks...also, what if you're simply wrong about your IV (sales projections revised, nobody likes BB10 etc)? Should you keep buying more? There is no feedback process...

[ERICOPOLY]

Rimm's "intrinsic value" is likely dropping....why would you buy more? People seem to assume that IV is fixed and certain while price is variable....but IV seems to be pretty variable when it comes to these tech stocks...

I disagree.  IV doesn't change.  Your perception of IV changes along the turbulent path of discovery.  You keep trying to predict the unpredictable, and blame it on the IV of the business rapidly changing.  No.

To get the IV prediction accurate with a higher batting average, and thus fewer investment mistakes, stick to businesses that are more predictable.  (that's a "Duh" comment).

I guess that by definition of the term "predictable business", you then realize that your IV number is a "prediction of the business"... well, more of the obvious.

[Hielko]

I'm going to disagree with both of you.

ERICOPOLY: If you throw a die in a completely dark room you don't know what side is up, but just one answer is right and someone with perfect knowledge about everything would be able to give you the right number. Investing in a company that is unpredictable can be similar: you don't know what the IV is, you see a possible range of outcomes, but just one of them is going to materialize.

But if you want to bet on what side is up on the die you can only treat it as a random number between one and six, and similarly for the company you should consider a full range of possible outcomes of IV. Now someone might feel one pip on one side of the die and shout it around in the dark room, and you can reduce the probability that number one (and six) are up and increase the probability for the other numbers. Did the IV of the die change? It still have the same side up, but the knowledge about the probabilities has changed. And for a company you might also discover that some possible outcomes should be removed from the probability distribution. The value of the bet has changed even though the (unknowable) true underlying value has stayed the same. It's not perception that is changing here, it's knowledge about the IV estimate.

Palantir: sure Rimm’s IV is likely dropping. But is it dropping faster than what the market price implies? Is it dropping slower than what the market price implies? I don’t know, and neither does someone who is using a stop loss order. But if you are long something you presumably think that the market is currently wrong about the value of the business, but then when it’s drops the market is suddenly right (or wrong in the other direction)? Doesn’t make sense.

[Palantir]

Rimm's "intrinsic value" is likely dropping....why would you buy more? People seem to assume that IV is fixed and certain while price is variable....but IV seems to be pretty variable when it comes to these tech stocks...

I disagree.  IV doesn't change.  Your perception of IV changes along the turbulent path of discovery.  You keep trying to predict the unpredictable, and blame it on the IV of the business rapidly changing.  No.

But isn't the concept of intrinsic value a "perception"? It is always an estimate, not a quantifiable, or verifiable property like say mass.

[ERICOPOLY]

Rimm's "intrinsic value" is likely dropping....why would you buy more? People seem to assume that IV is fixed and certain while price is variable....but IV seems to be pretty variable when it comes to these tech stocks...

I disagree.  IV doesn't change.  Your perception of IV changes along the turbulent path of discovery.  You keep trying to predict the unpredictable, and blame it on the IV of the business rapidly changing.  No.

But isn't the concept of intrinsic value a "perception"? It is always an estimate, not a quantifiable, or verifiable property like say mass.

There is only one intrinsic value.  Time will reveal it to us.

We have only prediction to rely on divining it's value.

[JBird]

"Anyone calculating intrinsic value necessarily comes up with a highly subjective figure. This figure will change both as estimates of future cash flows are revised and as interest rates move." - Buffett

Eric is right insofar as future cash flows, while having a huge range of possible outcomes, eventually materialize into 1 outcome. The IV change though comes when interest rates change.

[Palantir]

There is only one intrinsic value.  Time will reveal it to us.

We have only prediction to rely on divining it's value.

But when? And how will we know when we are at intrinsic value, and that our intrinsic value estimate is the "true" intrinsic value? 

[locatevalue]

Back to topic! Today, I bought some SHLD, OIBR and ALSK(thanks to Packer)..I see telecom is very cheap , though i dont like debt and high capex of these companies, Valuations are very compelling, Trying to compile a set of 5 telecom companies as a basket case of max 10% portoflio will make it larger if market dumps them more. So far couldn't find any great business at value prices like 2011 to make it big part. Still waiting !