«The reason Graham and Buffet paid so much attention to valuation is because of the large amounts of cash being invested. There’s a big difference between investing hundreds of thousand of dollars at a time as opposed to $1,000 or $2,000 dollars at a time.
I invest in $1K lots for my son, a full position has been moved up from $4K to $6K. The goal is to eventually get to $100K for a full position.
So I ask you, what impact does valuation have today on a $1K investment in a position that you hope to see at $100K 30 years from now? It’s crazy thinking to think that today’s purchase is more critical than one made 5 years, 10 years, 20 years or more from now, especially when investing small amounts of money at a time. Am I to assume price will be lower for V 5, 10 or 20 years from now? I don’t think so, so why fret over today’s price?
In my son’s portfolio, the next man up is V. I don’t have a clue what the valuation for V is and I’m not even going to look it up. I won’t look at a chart either and certainly it’s yield doesn’t inspire excitement. I simply want him to own more V and I will purchase it next week regardless of price. When adding 4 or 5 shares at a time I am not going through the dramatics of pretending I’m the next Buffet. … Ha!
I just want more of it.
The hard part is simply keeping things in perspective, nothing more, nothing less.»