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James Li
James Li
Articles (325)  | Author's Website |

GuruFocus Announces October Forum Winner

We have our second forum winner

We are pleased to announce that GuruFocus user Norvas gets a free copy of “Invest Like a Guru” for producing the Forum’s top post in October.

This post addressed a key macroeconomic question that we may need to ask ourselves in the upcoming months:

Should we keep the business or close the shop during a recession?

Winner prefers investing in energy companies

Our winner said he has good knowledge of the renewable energy industry, which includes companies like First Solar Inc. (NASDAQ:FSLR), Brookfield Renewable Partners LP (NYSE:BEP), Brookfield Asset Management Inc. (NYSE:BAM), NRG Energy Inc. (NYSE:NRG) and Renewable Energy Group Inc. (NASDAQ:REGI). While most of the companies are within the utilities sector, some of these companies might be under the energy sector or the solar industry group.

Warren Buffett (Trades, Portfolio)’s market indicator reached 138% as of Nov. 7, setting a new 10-year high. The ratio of the Wilshire 5000 over the gross domestic product is only 10% below the all-time high of 148% during the 2000 dot-com bubble. Fortunately, some market sectors are relatively undervalued even though the entire U.S. market remains significantly overvalued.

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Yale professor Robert Shiller offered an alternative way to compute market valuations: the cyclically-adjusted price-earnings ratio. Several market sectors, including energy, industrials and utilities, have Shiller P/E ratios lower than that of the entire S&P 500.

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Buffett and Charlie Munger (Trades, Portfolio), the co-managers of Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B), developed an investing checklist to look for companies that have a good chance of “passing the test of the bad times.” The Undervalued Predictable and Buffett-Munger strategies have outperformed the S&P 500 benchmark in at least seven of the past eight years.

Suggestions for improvement

Our Forum winner suggested we add a few Forum categories, including one that discusses how our investments increase the profitability of specific market sectors. We can also continue the “question and answer” type posts, according to our previous Forum winner. Other top Forum posts for October included “How to research an industry” and “Stock with massive discount to NCAV.”

Please continue adding thoughtful insights to our Forum. You can access the Forum in several ways, including clicking the “Forum” button at the top of the webpage.

Disclosure: I do not have positions in the stocks mentioned.

About the author:

James Li
I am an editorial assistant and researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

Visit James Li's Website


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