HAVE A GOOD WEEKEND!
So that is the thinking behind my style of deep value investing: swimming against the earnings obsessives to pluck out liquid-asset-rich companies with nimble service-focused business models. Then buying them when no one else will, and selling them when everyone else wants them. –Jeroen Bos
Deep Value Investing – Jeroen Bos A great series of case studies of balance-sheet investing
Deep_Value_Investing_Appendix The financials to supplement the book of cases above.
valuewalk-article1_1 His deep value approach has severely LAGGED the small-cap index AS YOU WOULD EXPECT in the latter stages of a bull market.
At a minimum you will learn more about how to analyze balance sheets.
Back in two weeks!
But don’t stop learnin’. Check out:
10 Value Investing Blogs
So you want to be the next Warren Buffett?
The man himself famously started out by reading all the books in the Omaha Public Library with “finance” in the title. Over the years, Buffett took that knowledge and turned it into investing tips that have helped countless investors. The Motley Fool has even taken the best of Warren Buffett’s wisdom and packaged it in a new special report that you can get free just byclicking here now.
Today, we also have blogs that can make the learning process quicker. But with so many blogs out there on the subject of value investing, the quality of content varies widely. So here, in my opinion, are the 10 best value investing blogs for you to follow and what you can learn from them.
Philosophy: “I invest, I educate, I write, and I could not dream of doing anything else.”
Sample post title: “Why Investors Hate Apple — and Are Dead Wrong”
Philosophy: “Many academics claim investing is a random walk. We believe this to be partially true, but believe that value investing can outperform the market.”
Sample post title: “Follow Up On Technical Analysis And Why To Avoid It”
Philosophy: “Random Thoughts on Investing and Investment Ideas.”
Sample post title: “Alleghany Corp Investor Day”
Philosophy: “To fight for what is right in money management, and encourage readers to pursue strategies that reduce risk and enhance returns.”
Sample post title: “If Investing Were Free, How Would It Change What You Do?”
Philosophy: “I think the most valuable ‘skill’ any investor can wish for is a little dose of humility.”
Sample post title: “The Great Irish Share Valuation Project”
Philosophy: “Deep value, contrarian, and Grahamite investing.”
Sample post title: “A Market of Stocks? Distribution of S&P 500 P/E Multiples Tightest In 25 Years”
Philosophy: “Promoting the multidisciplinary approach to investing.”
Sample post title: “Marcus Aurelius quote”
Philosophy: “I am generally a long-term value investor and try to use as many of Ben Graham’s principles as possible.”
Sample post title: “Has Your Portfolio Suffered an ACL Tear?”
Philosophy: “Provide practical and actionable value investing tools, tutorials and educational material to help empower the individual investor.”
Sample post title: “Stock Analysis Lesson with CommVault Systems”
Philosophy: “Value Investing for the Long Term.”
Notice that www.csinvesting.org is off the radar. Good.
Gold making history as October and December contracts tip into backwardation
Bruce Murison* contacted me (Toby Carlisle of www.Greenbackd.com) at the start of June with an interesting proposition: He would open a dedicated account to trade the Acquirer’s Multiple All Investable Stocks Screen and post his strategy and results on the site. He thought knowing there was a public eye keeping him on the straight and narrow might assist with his discipline (the same reason I launched Greenbackd in 2008). He wondered if a real time, real money account tracking the acquirer’s multiple’s performance would be interesting to readers of the site. I of course leapt at the opportunity. Bruce hopes that his project might encourage outside the box thinking and maybe lead to others posting their strategies and ideas that could become an interactive community of users. Here begins Bruce’s first post in what I hope will be a long series:
I am dedicating a $25,000 real money account to trade stocks ranked favorably according to The Acquirers Multiple (TAM). Every stock will be chosen and traded according to these rules:
Click here if you’d like to see a current list of deeply undervalued takeover and activist targets using The Acquirer’s Multiple® (it’s free!), subscribe to The Acquirer’s Multiple® or connect with me on Twitter, LinkedIn or Facebook.
Thanks to the GREAT Toby Carlisle whose books, videos and dark sense of humour are an inspiration to all.
QUESTION to all:
Will screening out the companies that may or could go bankrupt (the ones with the worst financial metrics) but are the cheapest hurt performance. Why are money losing net/nets generate better returns AS A GROUP than money making net/nets. Example: Energold (EGDFF).
How to become a better investor: https://youtu.be/eFsF0Z9EKDg
Do you agree/disagree? Why?
HAVE A GREAT WEEKEND. I will be on the road until Monday.
I have been too busy to do another lesson but be ready next week! For those attending the Berkshire Hathaway Meeting in Omaha enjoy the experience. Flash your Deep-Value Group card for up to 95% discounts.
HAVE A GREAT WEEKEND!
I hooked up my accelerator pedal in my car to my brake lights. I hit the gas, people behind me stop, and I’m gone. Steven Wright
The Endless Search for Value
I know we have lessons to complete in Quantitative Value, but I also use this blog as a poster board to refer back to when assessing events, thoughts, and ideas.
After spending four hours groping through the Value Line’s 2,000 companies, I don’t find much of interest besides the uglies of Russian and Brazilian stocks, coal, uranium, silver and gold miners. Most readers here are too refined even to think of investing in such cyclical companies. What would your Momma say?
I find the relentless buying by insiders in small mining stocks to be interesting while corporate insiders in other companies want cash now and not stock. For example, https://www.canadianinsider.com/node/7?ticker=LYD
Here is a company just pulled at random from Value-Line:
We don’t know when the movie ends, just that it will end badly.
Wow, well said and rare. Doubt if control grid mainstream media will be having this white hat on the air. Orioles Executive Vice President John Angelos, son of majority owner Peter Angelos:
“Speaking only for myself, I agree with your point that the principle of peaceful, non-violent protest and the observance of the rule of law is of utmost importance in any society. MLK, Gandhi, Mandela, and all great opposition leaders throughout history have always preached this precept. Further, it is critical that in any democracy investigation must be completed and due process must be honored before any government or police members are judged responsible.
That said, my greater source of personal concern, outrage and sympathy beyond this particular case is focused neither upon one night’s property damage nor upon the acts, but is focused rather upon the past four-decade period during which an American political elite have shipped middle class and working class jobs away from Baltimore and cities and towns around the U.S. to third-world dictatorships like China and others.
The outcome plunged tens of millions of good hard-working Americans into economic devastation. Then they followed that action by diminishing every American’s civil rights protections in order to control an unfairly impoverished population living under an ever-declining standard of living and suffering at the butt end of an ever-more militarized and aggressive surveillance state.
The innocent working families of all backgrounds whose lives and dreams have been cut short by excessive violence, surveillance, and other abuses of the Bill of Rights by government pay the true price, an ultimate price, and one that far exceeds the importance of any kids’ game played tonight, or ever, at Camden Yards.
We need to keep in mind people are suffering and dying around the U.S., and while we are thankful no one was injured at Camden Yards, there is a far bigger picture for poor Americans in Baltimore and everywhere who don’t have jobs and are losing economic civil and legal rights, and this makes inconvenience at a ball game irrelevant in light of the needless suffering government is inflicting upon ordinary Americans.”
We will be looking at accounting metrics to screen out value traps, so I thought some may wish to read: Can-the-piotroski-f-score-also-improve-your-investment-strategy
As an example, if you want to invest with more (RELATIVE) safety in the cyclical oil service business, you would want a company like this: RPC Inc (RES)
Note balance sheet and good operating metrics. It doesn’t mean that RPC, Inc. can’t go materially lower in price, just that the company has a high probability of surviving through this down cycle compared to competitors.
Silver-to-$60 (video during 2011 Silver Mania)
Dollar to Euro Parity (video during 2015 Dollar Mania/Panic)
Beware of “experts.”
We were unable to discover any ‘magic’ qualities associated with stocks selling below liquidation value. — Joel Greenblatt (How the Small Investor Can Beat the Market)
Enterprise Multiple = Earnings before interest, taxes, and depreciation & amortization, (“EBITDA”) divided by Enterprise Value (“EV”).
We need to understand the use of EBITDA, Why we must use EV, and the requirement to use pre-tax owner’s earnings or EBITDA – maintenance capex (“MCX”).
Placing EBITDA into Perspective (from the prior post) Suggested reading
EV The Price of a Business Understanding and calculating EV. Suggested reading
Beginning lesson on Enterprise Value for beginners (Video, Khan Academy)
Pop Quiz: Why do you include minority interests with EV?
Why you use Enterprise Value (Review)
Minority Interests (Review)
Chapter 9 EV Multiples Only if you dare. Heavy reading. Voluntary.
Let’s tackle really grasping the use of EV, EBITDA, and EBITDA – MCX
I will also send out the Little Book via email as supplementary reading for this chapter.