He wants people to go back to work and he isn’t actually selling all of his possessions nor does he actually think the the boutique is too high. While I understand that focus, I think that you should consider incorporating pricing triggers into your value mission for two reasons. If market triggers can operate as catalysts, incorporating them into your investment process can unlock the value mistake that you have found. Since the latter is often out of your control, I believe that one of the keys to being a good value investor is finding catalysts that can cause the price correction. The 2009 flu season will probably go down in history as being one that caused great anxiety for parents. I am a value investor, albeit one with perhaps a broader definition of what comprises value than some old time value investors, but I do look at pricing triggers, especially with small cap, lightly followed and emerging market companies. I own shares in Apple and I don’t own any (right now) in Amazon, and I have explained why in prior posts on both companies.
With convertible bonds and preferred shares, the conversion price can become a trigger for a change in value, if it results in a significant increase in shares outstanding and in debt ratios. To the extent that these companies are being mispriced, the attention leading from hitting a trigger can lead to a reassessment of the company and perhaps a closing of the gap. MacWorld is being cancelled starting in 2010 and Steve Jobs will not be making his keynote speech in the 2009 MacWorld. It makes sense most companies that split once will probably keep heading up and keep splitting again and again in the future. If you are a value investor: As someone focused on value, your first instinct may be to ignore market triggers, viewing them as a distraction from your central mission of valuing companies based upon their fundamentals, and then buying undervalued stocks and selling overvalued ones.