“To my mind, the stock price is the least useful information you can track, and it's the most widely tracked"
“If you can follow only one bit of data, follow the earnings"
“Lynch promises that if you ignore the ups and downs of the market and the endless speculation about interest rates, in the long term (anywhere from five to fifteen years) your portfolio will reward you.”
Excerpt From: Lynch, Peter. “One Up on Wall Street.”
Having all said by great investors it is very difficult to practise when it comes to real world. It requires very brave heart to see the stock diving and yet to hold onto it.
The key to a rational stock price is rational shareholders, both current and prospective.
Even if our partially-owned businesses continue to perform well in an economic sense, there will be years when they perform poorly in the market. At such times our net worth could shrink significantly. We will not be distressed by such a shrinkage; if the businesses continue to look attractive and we have cash available, we simply will add to our holdings at even more favorable prices.
Though we all know these quotes its difficult to follow and Allsec is a good case. I am not saying that Allsec is a business which will be preferred by such legendary investors. I am also not saying that decision to buy will be the correct decision. It may fall further from here. But if fundamentals are good we should not focus on price. Again,
All I am trying to Say is that value investing is not so easy in practice.