It is very difficult nowadays following traditional ways of value investing. Cheap things are cheap for a reason. If they are really cheap for no reasons, it will be bid up in a second. Millions of people are screening the market using the most advanced technological tools, and the results would be the same on each screen. Everyone is reading things everyone else is reading. Even the books, which are "must read", are read by everybody. How can you get an edge from that?
Do not get me wrong. It is really hard to get true bargains nowadays, but it is not impossible. I started investing in the market in 2002 and my method is simple, going through every single stock on the Yahoo Finance list. And once in a while, depending on how hard you work, you'd find an interesting company with certain characteristics. For example, companies grew 10+ years at 15% and traded at 8x PE after cash. No options, big dividends. However, nowadays those bargains are long gone. Stocks are not cheap.
So now to solve the question, I have only one option: going into the small-cap swamps. But for a concentrated investor, sometimes with over 50% of money in a single position, small-caps can be annoying. My experience with small-caps, especially those with bad economics, are not pleasant. Very seldom will you find a company where you have a high degree of confidence and put the money to work for a long time. Things can just go wrong, in ways you cannot even imagine.
After many years of mixed results(slightly positive in the last 8 years), I decided to go back to the basics. From the process of going through every public company in a certain country, many extraordinary companies were found. They are world-class businesses but for some reasons, have not been recognized by the public. The valuations may not be cheap, but sticking to the measure of PE is not something that bothers me. Intrinsic value is what really matters.
Also along the way I will introduce some companies with not so awesome economics and market positions, but have much lower valuation. You would not see those companies anywhere else, like SeekingAlpha or VIC.
Those ideas will be original and fresh, just for you.
Fan
