Develop a Search Strategy 79effi cient than it was when Buffett was getting started. Occasionally
you have periods of extreme pessimism, where all rationality ceases
to exist. The 1974 market decline comes to mind, where tons of
great businesses were trading at low single - digit P/E ratios. As I
write these pages in the fall of 2008, the implosion of the credit cri-
sis, steep housing declines, and global economic recession are pro-
viding a similar 1974 - type market environment.
You can fi nd lists of stocks hitting new annual lows in various
places. The Yahoo! stock screener allows you to search for stocks
trading at new low prices. My favorite source is Barchart ( http://www.
barchart.com ). Each day it provides a comprehensive list of 52 - week
lows, highs, and everything in between. It ’ s a valuable list of stocks
and should be a part of any sound investment strategy.Value Investors Club
Value Investors Club ( http://www.valueinvestorsclub.com ) is a site created
by Joel Greenblatt. It ’ s a membership site; the only way you can
become a member is by submitting an investment idea so compel-
ling that it selected for the club. As a member, you have real - time
access to the ideas posted by other members. The membership is
capped at 500, so the emphasis is truly on the quality, not quantity
of ideas. Many of the members are widely known in the value invest-
ing community.
Fortunately, the heads at the Value Investors Club (VIC) gra-
ciously allow guest access to nonmembers to see ideas that are at
least 45 days old. You get the same information as members, except
that the ideas have already been up for 45 days. In many cases, a
45 - day - old idea is still very current, as many value investment ideas
take some time to play out. In any case, each investment idea is usu-
ally a two - to four - page write - up on why the investment is a compel-
ling one at the time. The neat concept behind VIC is that all ideas
are rated by the other members on a scale of 1 to 10, so you have aCH005.indd 79CH005.indd 79 9/2/09 11:08:06 AM9/2/09 11:08:06 AM