I have just finished reading this thread with much interest as the strategy I have been using this year in the share market is very similar to that used by Intrinsic Value's. It's an approach that I think works well in sideways/falling markets.
I start with my estimate of intrinsic value for what I consider to be the best quality stocks. I have been trading some of those stocks that have fallen in price and present a big margin of safety. I have been buying in times of high volatility and sell into market strength (low volatility).
It's been a good way for me to generate some additional capital and more importantly cash flow with the high dividend yields this strategy has been producing while preserving my capital. For me, it is all about minimising risk while creating some upside. I liked the analogy about being like an insurance company in that way.
For me, I think this strategy will come to an end sometime in the next few months as I am concerned about being caught on the wrong side of a market fall. If I am, at least it will be in a good quality stock/s bought with a large discount to my estimate of intrinsic value. At this point my strategy will change.
If/when the market falls, I won't consider my change in strategy as 'speculation' but more a pragmatic conviction of the situation.
I start with my estimate of intrinsic value for what I consider to be the best quality stocks. I have been trading some of those stocks that have fallen in price and present a big margin of safety. I have been buying in times of high volatility and sell into market strength (low volatility).
It's been a good way for me to generate some additional capital and more importantly cash flow with the high dividend yields this strategy has been producing while preserving my capital. For me, it is all about minimising risk while creating some upside. I liked the analogy about being like an insurance company in that way.
For me, I think this strategy will come to an end sometime in the next few months as I am concerned about being caught on the wrong side of a market fall. If I am, at least it will be in a good quality stock/s bought with a large discount to my estimate of intrinsic value. At this point my strategy will change.
If/when the market falls, I won't consider my change in strategy as 'speculation' but more a pragmatic conviction of the situation.