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The Equitymaster Research Digest

The Virtue of Boring Businesses, Selling ValuePro Stocks, and More...
Mar 16, 2016

Nobody wants to be called 'boring' in real life. Indeed, in today's society, dullness is nearly a vice. It's all about looking for different experiences, doing something new and creative... In short, it's all about wanting some excitement. That's a good thing.

But not so in investing. What if I were to tell you that in investing, the exact opposite is true. Indeed, not only is good investing boring, but dull businesses actually make for good investments.

Find that hard to believe? I don't blame you. There are so many fads and themes discussed in today's financial papers and TV channels, that you would be right to believe it a crime to not follow the trend.

So you tend to focus on stocks whose growth potential is expected to be huge, or those with an exciting back story.

That's not all. While managing equity portfolios too, there is this itch to continuously churn the portfolio because of the misguided perception that you have to keep doing something.

But I believe that the good thing about value investing is that it's boring. It is all about finding quality businesses at the right price. So you might have come up with a list of such quality businesses. But that does not mean that you should immediately act on them. The timing may not be right. Simply because the valuations are too expensive.

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