One of Warren Buffetts famous investing sayings is be fearful when others are greedy and greedy only when others are fearful or, in other words, sell when others are buying and buy when theyre selling.
But we might expect Foolish investors to know that, and looking at what Fools have been buying recently might well provide us with some ideas for good investments.
So, in this series of articles, were going to look at what customers of The Motley Fool ShareDealing Service have been buying in the past week or so, and what might have made them decide to do so.
Tesco: Rising Like A Phoenix?
The FTSE 100s favoured scapegoat these last few months, Tesco (LSE: TSCO) has reversed its downwards trend in recent days, climbing by around 4% in Mondays trading after a wave of positive sentiment over the weekend (now when was the last time we could say that?).
One analyst Bruno Monteyne at Bernstein Research stated his belief that new chief executive Dave Lewiss price- and cost-cutting plans ought to plug many of the groups problematic areas and arrest leaking profits, upgrading Tesco to outperform. He also thought it was now less likely that the supermarket would need a rights issue to raise funds, with a cash call seemingly being priced in to the shares current valuation.
Elsewhere, rival Sainsburys lost an appeal against Tescos Price Promise scheme, further boosting the latters investment appeal (and in turn lessening the formers, sending Sainsburys shares lower on the day). The concern was that it is misleading to compare prices of own-brand and fresh food, as they may contain different ingredients and have different origins, or whether they were Fairtrade. As it stands, Tesco can boast that nine out of 10 of its Price Promise baskets are cheaper than Sainsburys.
Buffetts BareBasket
The tail end of last week brought news on just how much Buffett lost on his Tesco investment in the third quarter: a staggering 427.2m.
But if Buffets oft-quoted mantra about fearand greedis correct, with the marketsofearful, now couldbe the right time to buy. And thats exactly what a lot of customers of the Motley Fools ShareDealing service have been doing. They put Tesco firmlyin the number 1 spot in the latest Top Ten Buys list*, with almost three times as many investors buying the supermarkets shares as selling.
Of course, no matter what other people were doing last week, only you can decide if Tescoreally is a “buy” now.
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Sam Robson has no position in any shares mentioned. The Motley Fool UK owns shares of Tesco. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
*based on aggregate data from The Motley Fool ShareDealing Service.
*based on aggregate data from The Motley Fool ShareDealing Service.
*based on aggregate data from The Motley Fool ShareDealing Service.
*based on aggregate data from The Motley Fool ShareDealing Service.