Thread by @shyamsek

In every market cycle, value investors don't make money during the blow out phase.

When markets correct thereafter, value investors lose some money.

Then, when do value investors make money? What gives them higher returns?
#investing #valueinvesting
#Compounding
1/7

Most followers actually don't know the answers. In fact, many possibly even question if value investors actually make decent money. They expect returns to always show up in a linear, visible mode.

But where value investors focus upon, this can never happen. #investing #nifty 2/7

When you keenly follow a value investor without understanding his mindset, timeline & investment style , what happens?
It could lead to your own behaviour & weakness impacting far more than merit of the borrowed ideas.His strengths are not going to work for you. 3/7 #investing

Corrections happen. Then followers quickly lose faith. They sell at any price. Exit. But, they do this without bothering what value investors are doing.

The value investors would be busy scouting. Working hard. Refining their ideas. Creating a new line up. #investing #nifty 4/7

The new line up will still be a mix of old and new ideas. The intent of a value investor would be to achieve the best possible portfolio in the emerging market context. So, some ideas which don’t fit will be exited. Newer,better ones will take their place. #investing #nifty 5/7

Back to whether value investors actually make #returns? They certainly make superior returns. But, returns have their own body clock. They are lumpy; happen at own pace.

The value investor has the patience to sit through market drama. It’s his patience that pays. #investing 6/7

Value investors are differentiated by how they exit when valuations go crazy. Their construct is to move to safety when market exuberance is high. But, most often, markets can get even more crazy after they sellout . Value investors cash out before the blow outs. #investing 7/7