If you've made good investments in good companies, this is really all you have to do. I wanted to take up a topic of frequent recent discussion on our Rule Breaker message board , which is where I increasingly go for some of the most intelligent and compelling exchanges in Fooldom. So I want to talk tonight about valuation . First off, this is a straw-man argument. Valuation always matters.
Valuation is a very significant factor in market pricing, in investor expectations, etc.
Valuation, in this regard, absolutely matters. My Rule Breaker philosophy on valuation, on the other hand, does not use it as a meaningful criterion for investment decision. If you're not already aware of our critical third principle of this portfolio's management, please read it here . In brief, we believe the market is a Huge Brain that factors in all viewpoints as it creates prices on which buyers and sellers are willing to shake hands minute by minute, day after day. With most of our best stocks, they almost always look overvalued all the way up, for years and years.