Tag Archives: Clear Investment Thesis

Case Study #4 of a Clear Investment Thesis: Cash Bargain

It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.  –Charles Munger.

This is an example of a cash bargain–no discussion of growth or competitive advantage. You are playing a statistical game of reversion to the mean–how many puffs of the cigar will you get? Time is not on your side so you should size the position if you decide to invest. http://www.youtube.com/watch?v=XzcWwmwChVE

Case Study here: http://www.scribd.com/doc/75684107/Case-Study-4-Clear-Investment-Thesis-Winmill-cash-Bargain


Case Study #2 of an Excellent Investment Thesis: SGDE

The professor already handed out Case 1 (NVR) which was posted here:http://csinvesting.org/2011/12/10/case-study-1-of-an-excellent-investment-thesis-nvr/

Now for Case 2 (SGDE): http://www.scribd.com/doc/75498797/SGDE-Example-of-a-Clear-Investment-Thesis

Links to the annual report and 10-Q are at the end of the document. You may wish to read and value the company BEFORE reading the write-up to test your valuation skills.  Again Charlie479 presents a clear and compelling investment thesis.

To brush up on reading a 10-K go here: How to read a 10-K by the SEC http://www.sec.gov/investor/pubs/reada10k.pdf

I like to simply follow this guy’s advice:http://www.youtube.com/watch?v=BJS_zTnUiBc&feature=related


  1. Is this a good business by ROIC, ROE, ROA?
  2. What is it? Sales, profits, cash flows growing, slowing, declining, volatile?
  3. Debt? How much and what terms?
  4. How is management compensated and do they have skin in the game?
  5. Do I have a hope of understanding this business?