Trading Post June 8, 2026

Buying a Long-Term Compounder on a Simple Rule

Some stocks are backed by businesses so good that the time to buy is defined by a simple, recurring rule.

Samsung Electronics is the belle of the ball these days. Just last year, however, it traded extensively at tangible book value.

When Samsung Electronics stock hits tangible book value per share, buy it. Period. No more analysis needed.

Fine, do the analysis once. Then, just buy it at tangible book value the rest of one’s life.

I did, in early 2025. I made it a top 3 position in my fund at tangible book value.

I did this for a very good reason. It has always worked for anyone who has done so the last three decades. Below, a logarithmic chart of Samsung Electronics stock, with arrows pointing out every time the stock breached tangible book value per share.

Eight times in the last 30 years, Samsung Electronics has provided an opportunity to buy the common stock at tangible book value.

Now, when to sell? One option is never. From the bottom of the 1998 Asian Currency Crisis through to today, Samsung Electronics stock has returned about 24.6% annually, with the stock up 470 times.

Of course, Samsung repeatedly trades down to tangible book value because it is cyclical. Has always been. And always will be. Hint hint.

I should note that when Samsung recovered from the 1998 crisis, its stock rallied much like it has recently. It got ahead of itself, but the stock turned out to be a terrific long-term hold even after that rally, albeit providing a 15% annual compounding return.

Perhaps better would have been waiting for it to touch tangible book value per share again. From there, the annualized return jumps back up above 20% through to today.

It always makes sense to buy at the lull into tangible book value even if the plan is to hold it long-term.

Now, I have a stock here in America that is providing a similar opportunity.