How is it possible that an issue with the splendid records of Tonopah Mining should sell at less than the company’s cash assets alone? Three explanations of this strange situation may be given. The company’s rich mines at Tonopah are known to be virtually exhausted. At the same time the strenuous efforts of the Exploration Department to develop new properties have met with but indifferent success. Finally, the drop in the price of silver last year has provided another bearish argument. It is this combination of unfavorable factors which has carried the price down from $7 1/8 in 1917 to its present low of $1 3/8 in 1923.
Granting that the operating outlook is uncertain, one must still marvel at the triumph of pessimism which refused to value the issue at even the amount of its cash and marketable investments; particularly since there is every reason to believe that the company’s holdings in the Tonopah and Goldfield railroad, are themselves intrinsically worth the present selling price. (Ben Graham on Investing)
Marty Whitman criticizes Graham and Net Nets (3 minutes Must see!)
Marty Whitman: They Just Don’t Get it. (23 minutes) Marty says many analysts on Wall Street do not understand credit analysis. We will explore later in this course whether the quality of credit provides a better assessment of the true cost of capital for a firm rather than “beta.”
One investor’s experience investing in Net/Nets (3 minutes)
Net/nets as value traps (5 minutes)
Good advice on behavioral investing (3.5 minutes)
Prof. Greenwald on UGLY and Cheap or Graham’s Search Strategy (8 minutes)
Greenwald on the Balance Sheet (risk of financials) (10 minutes)
Why do the typical MBA classes teach Beta, Capital Asset Pricing Theory, Value at Risk? Do those terms and theories have anything to do with REAL investing? What would Graham say about the typical MBA finance class? We will delve into those terms in another reading (Discussed in Montier’s book, Value Investing–which was emailed to YOU.)
If you wish to take MBA-level finance courses for free go here: http://pages.stern.nyu.edu/~adamodar/
The next link contains an offensive video about picking-up women (please, those of sensitive dispositions ignore/delete). However, there is a lesson here for deep value investors–a hint of where to look for value. In places where other investors are experiencing anguish. Video: Deep Value Search Strategy
Tomorrow/Saturday I will post the lecture notes for Lesson 1. Then we will view a Deep Value Activist in action.
You may enjoy reading an interview of Deep Value’s author
Deep Value Author, Tobias Carlisle-interview-with-harvest-and-its-community
Deep-Value-at-authorsgoogle/ An excellent video of Deep Value Investing.
www.greenbackd.com is worth scrolling though and viewing past videos.
There was a turkey vulture
and a chicken hawk
sitting in a tree looking down on a chicken coop. Chicken hawk turns to the his right and says to the ole turkey vulture, “I am hungry today, let’s gets us some chickens. What you say?” The turkey vulture turned his head all the way round, looked down at the chicken hawk and said, “The Lord will provide!”
The chicken hawk flapped his wings once and then said, “Yes, but dems chickens are just waitin’ to be ate. Let’s go, let’s go.” The turkey vulture just looked down again at the chicken hawk, turned his head all the way round and said, “The Lord will provide.”
“You jes set on dis branch, ole turkey vulture, but I’m going to get dems chickens,” squawked the chicken hawk. The turkey vulture turned his head all the way round and said, “The Lord will provide.”
The chicken hawk flew right from the branch and snatched up a little chickadee and then…….BLAM! That farmer’s shotgun blew the chicken hawk all to Hell. Feathers and guts all over.
The turkey vulture turned his head all the way round, looked down at the dead chicken hawk and then turned up at the sky, “Thank the Lord!”
A Good blog: http://pakiyafunds.wordpress.com/