Is Value Investing The Same As Market Timing?

Warren Buffett has been touted as the world’s foremost ‘Buy and Hold’ Investor. He’s been quoted as saying he likes to hold stocks “forever”.

He’s also a value investor. So most people could draw the conclusion that value investing means buying for the long term. I disagree strongly. Buying when something is undervalued and selling when its overvalued is essentially market timing. You time your entry and exit points based on the fundamental underlying value of the asset. So Buffett really is a market timer!

Warren Buffett recently sold his Laguna Hills house because “it was overvalued”. Its not like he needed any extra money or couldn’t make his mortgage payments!!!

I feel sorry for all those people who are still buying real estate in Southern California because “its a lifestyle choice and people always want to live here”, or “in the long run, it will always go up”, or “its currently a buyers market so now is the time to buy” or some stupid excuse that ignores the underlying value of the property.

When a property rents out for $1450/mo and your mortgage is $2300 on an interst-only loan 3 year ARM, its way overpriced!!! Which is why I sold my condo and pocketed the cash!

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