Value Investing Is in the Dumps but Not out altogether
By Saghir Aslam
Rawalpindi, Pakistan
(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live in security and dignity and fulfill their religious and moral obligations towards charitable activities)
Stocks such as Netflix and Amazon have upended a traditional approach to market.
I have been a value investor all my life. When you buy value stocks, you are really investing, not gambling like a dot- com days.
Even though currently, value investing is not that much in favor but do not disregard value investing because in value investing you do not end up losing large amount of money as people did in dot com days
When you are buying value stock it’s really investing. You must do the research on companies that you want to invest with and record what kind of dividend it pays. One thing is for sure, when you are investing with valuable companies you will not lose large part of your money. It may be slow growth one-year, next year, it might go up like crazy but your money is almost invested properly. However, when you are buying high flyers as people did in dot com days that’s not investing. I call that gambling, sure, some of the high flyers you end up making lots of money then on others you may end up losing big portion of your investment
Value investing is mired in one of its worst stretches on record, prompting concerns that the investment style favored by generations of fund managers is losing its effectiveness.
Value stocks, those that are cheaper than many peers relative to earnings or reported net worth and are typically purchased by fund managers anticipating long- term appreciation, have significantly lagged begin their growth stock counterparts so far this year, compounding a gap that has persisted since the end of the financial crisis.
Instead, investors have gravitated toward companies with fast earnings or price growth, such as Amazon.com Inch., Netflix Inc. and Tesla Inc., and the market’s price/earnings ratio has continued to rise-a trend that many value investors contend can’t continue forever.
Stocks that look cheap relative to traditional fundamental metrics such as profit or cash flow have fallen so far out of favor that Goldman Sachs in June questioned whether the markets are witnessing the death of value investments in Europe and Asia also struggling, value funds globally are on track to post their worst performance this year relative to growth funds since before the financial crisis.
The struggle for value stocks over such a prolonged period contradicts the popular investment approach coined by financial analyst Benjamin Graham, known as the father of value investing, and since popularized by Warren Buffett. The billionaire investor and Berkshire Hathaway Inc. chairman has attracted a legion of followers who remain confident that value investing will never go out of style.
From the Great Depression to the U.S. tech bubble to the global financial crisis, the notion that a new paradigm would replace value investing has repeatedly occurred. Those predictions have almost always ended poorly.
While value investing appears to have lost some luster now as the so-called FAANG stocks-Face book inc., Amazon, Apple Inc., Netflix and Google parent Alphabet Inch. -have surged in value. the most steadfast devotees to value style investing are often the ones that benefit most in market downturns.
The market’s attraction to highflying stocks punishes value investors in a similar fashion in the late 1990s during the dot-com bubble.
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale.)
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The Female Car Mechanic Driving Change in Patriarchal Pakistan
Multan: Since picking up a wrench as one of the first female car mechanics in Pakistan, Uzma Nawaz has faced two common reactions: shock and surprise. And then a bit of respect.
The 24-year-old spent years overcoming entrenched gender stereotypes and financial hurdles en route to earning a mechanical engineering degree and netting a job with an auto repairs garage in the eastern city of Multan.
“I took it up as a challenge against all odds and the meagre financial resources of my family,” Nawaz told AFP.
“When they see me doing this type of work they are really surprised.”
Hailing from the small, impoverished town of Dunyapur in eastern Pakistan’s Punjab province, Nawaz relied on scholarships and often skipped meals when she was broke while pursuing her degree.
Her achievements are rare. Women have long struggled for their rights in conservative patriarchal Pakistan, and especially in rural areas are often encouraged to marry young and devote themselves entirely to family over career.
“No hardship could break my will and motivation,” she says proudly.
The sacrifices cleared the way for steady work at a Toyota dealership in Multan following graduation, she adds.
Just a year into the job, and promoted to general repairs, Nawaz moves with the ease of a seasoned pro around the dealership’s garage, removing tires from raised vehicles, inspecting engines and handling a variety of tools–a sight that initially jolted some customers.
“I was shocked to see a young girl lifting heavy spare tyres and then putting them back on vehicles after repairs,” customer Arshad Ahmad told AFP.
But Nawaz’s drive and expertise has impressed colleagues, who say she can more than hold her own.
“Whatever task we give her she does it like a man with hard work and dedication,” said co-worker M Attaullah.
She has also convinced some of those who doubted her ability to make it in a male-dominated work environment, including members of her own family.
“There is no need in our society for girls to work at workshops, it doesn’t seem nice, but it is her passion,” said her father Muhammad Nawaz.
“She can now set up the machinery and can work properly. I too am very happy.” - AFP
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