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0 pointsdamoncali16y ago0 comments

Yes, I would. The definition of "mispriced", I would argue, is quite different. You could come up with all sorts of algorithms to trade in the midst of a bubble, and find "undervalued" companies on micro time scales. In the value investor's mind, the same companies are always overvalued. Value is relative in one case and absolute in the other.

Splitting hairs perhaps, but the fundamental approaches are different. I will give you that the hf mentality can certainly be applied over long time periods.

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arthurdent16y ago

define: mispriced = "value != market price"

Where you and i diverge is "Value is relative in one case and absolute in the other."

I think you're saying that HF Guy's definition of value is relative and Value Guy's definition of value is absolute.

If its even correct that any company has a single true value, I think this number is unknowable. Investors or traders make estimates of this value, and if their estimate deviates significantly from the market price, they transact with Mr. Market.

Nobody's estimate is more absolute or relative than any one else's.

edit: deleted a bunch of pointless words.

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