I was going through the Blog Watch column by James Altucher, where he talks about ModernGraham's list of 15 favorite value stocks trading at low P/E ratios. Now here are the 15 stocks.
SPF, PHM, KBH, MDC, LUK, RYL, ASH, CFC, DHI, LEN, TOL, ORI, FNF, RS, CB
So why are they loading up on home builders, while bears are telling you to short them. Because they understand how market works and have confidence in their methodology. They believe based on future earning potential, these stocks at these price present compelling value.
I am not a value investor, but I have studied the methods of value investors in great detail and understand what they do and why they do it. I have great respect for their methodology and way of thinking. Also I understand from my study of mutual funds that vast sums of money is devoted to value strategy. Now that kind of understanding gives you a different perspective on the market.
Many years ago in one of the University talks Warren Buffet was asked what is his daily routine and he replied, something to the effect " I look at the 52 week low list in New York Times, pick up a Cherry Coke and start researching those companies further."