Michael Price (Trades, Portfolio), manager of MFP Investors, likes to buy his stocks from companies that are sailing on rough waters. He does not go for the nice and comfortable stocks that are a guaranteed win – well, as guaranteed as you can get in the market; we all know nothing is promised when it comes to investing – instead, he looks at companies that are selling their shares 30-40% below their estimated intrinsic value.
"We know it's easy to get swept away in a growth market. But I've been in this business more than 25 years, and I've watched investors figure out a way to justify incredible multiples, only to see valuations collapse back to the underlying worth of the company. We are value investors, and, at these prices, we aren't going to buy names like Microsoft," he said. Continue Reading »