Our goals in this course are to learn about investing, especially deep value investing through the book, DEEP VALUE by Toby Carlisle and supplemented by Quantitative Value by Toby Carlisle. Also, many original source readings will be provided to clarify and deepen our understanding of the primary readings. Also, we wish to be skeptical, independent thinkers who prove to ourselves what works and makes sense. We will be open to disconfirming evidence. We will question and help each other learn.
Below are the links in chronological order. The REQUIRED readings are in BOLD. Everything else is supplementary, but I hope you dig even deeper into the concepts and ideas.
- Toby Carlisle talk on DEEP VALUE Investing at Google (This was a preview/introduction to the course)
- Introduction to the course and book DEEP VALUE
- Lesson 1 Read PREFACE in Deep Value, Margin of Safety chapter in Intelligent Investor, Mr. Market and Behavioral Investing The first REQUIRED readings (Preface in Deep Value book (required), then supplemented by the other three readings.
- Lesson 1 Emergency Crash Landing The purpose of this post was to show the element of character, temperament, and training to maintain a process in the face of extreme stress. Investing is more about discipline and character to stay with the right process than IQ.
- Announcement that Margin of Safety by Klarman was emailed to participants
- Announcement that Value Investing by Montier was sent out as a supplement reading
- Rodney Dangerfield Video about Questioning Traditional Concepts, Deep Value Author Lectures
- Review of readings, a video of a deep value and activist investor valuing a company and an activist in action from Other People’s Money Munsingwear Case Study provided to test students’ ability to approach a business problem.
- An example of paying a huge premium for net asset value or What NOT to do as an investor
- Major Reading Assignments, Chapter 2 in DEEP VALUE book, Graham and Net/nets, liquidation value The institutional imperative was introduced. As deep value investors we feast on the errors of others due to cognitive biases or the institutional imperative (We can’t hold this poor performing stock because what would the client think?) I emailed out the books Security Analysis and Intelligent Investor to all in the course.
- Hannibal Lecter lecture on how to do the readings-Simplicity Try to focus on the main points and how you can apply them. Humor
- How to join Deep-Value group at Google I ask enrollees to join to make communication easier.
- Videos on search and Net/Net Investing. This post supplements your reading in Chapter 2, DEEP VALUE
- Munsingwear Case Study Analysis See #8 above.
- Supplementary Original Source Documents for Chapter 2 DEEP VALUE See #10 above. Net/Net research and Graham’s testimony to Congress, Liquidation of American Businesses in 1932—Are Companies Worth More Dead Than Alive by Graham.
- httpAnalysis of Liquidation Valuation from Klarman’s Margin of Safety book in Chapter 8 (Valuation) Supplement to Chapter 2 in DEEP VALUE
- Supplementary Readings: Buffett Partnership Letters and King Icahn emailed. Next reading assignment will be Chapter 3 in Deep Value book.
OK, so after the chaos of postings and all the videos, you SHOULD have read:
The Preface and Chapter 2 in Deep Value by Tobias Carlisle (primarily supplemented by Chapters 1 & 2 in Quantitative Value). That’s it! All the other material is simply if you wish to go further or want greater understanding and reinforcement. For example, a student asked me what cost of capital would I use to discount the royalty earnings in the Munsingwear case study. If you dug into Margin of Safety by Seth Klarman, he would say to use your required rate of return. Try to find the answers from the investing greats and then determine if it makes sense to you. You should answer for yourself whether the returns to net/nets are due to higher risk or behavioral biases of other investors. Pose questions in the comment section of the blog if you have thoughts or other ideas.
You should after those readings have an understanding of why net/net investing generates superior performance. The returns are generated by the behavioral flaws of other investors. We should understand the concepts of Mr. Market and Margin of Safety. Investing is simple but not easy. Often temperament trumps IQ.
Next to read will be Chapter 3 in Deep Value.
There will be a review of the readings in another post. Our goal is to move DEEPLY and slowly through the readings. If you will notice all the other supplementary readings like Seth Klarman’s Margin of Safety, the Intelligent Investor, the SSRN research are from the footnotes of DEEP VALUE or Quantitative Value.
At the end of the week I will send out a zipped folder containing the books and materials collected for this course. Relax and don’t panic if you don’t have a book. I will email the folder to everyone in the Deep-Value group at Google.
I am sorry for the confusion, and I will strive to clarify.