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I think what Mark Cuban is saying is that because of the way Wall Street operates now it is very dangerous to be the Warren Buffet type of value investor. More

by hristov 17y ago

I think what Mark Cuban is saying is that because of the way Wall Street operates now it is very dangerous to be the Warren Buffet type of value investor. More specifically, Wall Street's obsession with the big score makes stocks very dangerous and volatile which means that if you try investing based on a company's intrinsic value, the stock you buy can easily swing down for reasons that are completely unrelated to the company value but have to do with some traders or trading algorithms trying to outsmart each other. Now if you are Buffet you probably have enough cash reserves to ride out any such swings, but most people need to rely on the money in their stock holdings, so they cannot afford the new found volatility of Wall Street, so many people are just moving out of the market all together. Now I have to say that I am not sure if this argument is right, but that is his argument.

lotharbot 17y ago
> "it is very dangerous to be the Warren Buffet type of value investor." ... "most people need to rely on the money in their stock holdings" If you need to rely on the money from the sale of your stock holdings, you're not a Warren Buffet type of value investor. If you're looking for income from your holdings (dividends and such), the volatility of Wall Street's stock pricing algorithms is not an issue. For those who are nearing retirement and counting on the sale of stock holdings, make sure you have an appropriate stock-bond-short term reserve mix in your portfolio so that you can ride out market swings. Moving out of the market altogether is unnecessary. If you do move out of the market in desperation (like people did in March of last year, selling for whatever they could get), you're providing us value investors the "irrational bargains" I mentioned in my reply to davidw.
- yummyfajitas 17y ago
  Buying stock for dividends is usually not a great investment since dividend income is taxed at a much higher rate than capital gains.
cakesy 17y ago
You shouldn't be investing this way, if you need to get your money back in the short term. Only invest in companies if you can afford to leave that money there, for a reasonable period of time, possibly years.

by hristov 17y ago

lotharbot 17y ago

> "it is very dangerous to be the Warren Buffet type of value investor." ... "most people need to rely on the money in their stock holdings" If you need to rely on the money from the sale of your stock holdings, you're not a Warren Buffet type of value investor. If you're looking for income from your holdings (dividends and such), the volatility of Wall Street's stock pricing algorithms is not an issue. For those who are nearing retirement and counting on the sale of stock holdings, make sure you have an appropriate stock-bond-short term reserve mix in your portfolio so that you can ride out market swings. Moving out of the market altogether is unnecessary. If you do move out of the market in desperation (like people did in March of last year, selling for whatever they could get), you're providing us value investors the "irrational bargains" I mentioned in my reply to davidw.

yummyfajitas 17y ago
Buying stock for dividends is usually not a great investment since dividend income is taxed at a much higher rate than capital gains.

cakesy 17y ago

You shouldn't be investing this way, if you need to get your money back in the short term. Only invest in companies if you can afford to leave that money there, for a reasonable period of time, possibly years.