Long-term, Value Investing: What matters and What Doesn't

Long-term and value investing has nothing to do with…

• Whether or not how many times your stock is featured on biz channels.
• Weather of not how newspapers, pink papers give research report on it or not.
• Neither if your stock is recommended by brokerage houses or so-called star analysts.
• How frequently your company comes in lime-light for product launches, conferences, corporate actions and so on.
• The increase or decrease in volume of shares on stock exchanges.
• Weather FIIs are buying or selling and MF managers are adding or dumping it.
• Weather no one is giving a tip about it.
• Your neighbour or broker has never heard about the company. (Many never heard or know about P&G, Gillette, Wyeth etc.)
• How frequently it announces corporate actions such as bonuses, splits, etc.

…But yes it matters…

• That you have bought it at discounted valuation than what it is actually worth. It could be discount to assets, order book, cash-flow, EBIDTA etc.
• You have measure your margin of safety.
• That you have analyzed the 5 to 10 year financial results for the company.
• The management is reliable, competitive and corporate governance is robust.
• That you have determined to hold some piece of the company’s business (shares) for certain minimum longer duration.
• That you have set your minimum realistic annual compounded return target from this investment.
• That you have gone farther than checking merely EPS, PE and debt-equity ratio; and thought of Cash EPS, working capital per share, long term viability of the sector, economic moat of the company’s business.