Classic value investors avoid financial firms such as Fairpoint Group (LSE: FRP) for the very plain and simple reason of an exceptionally weak balance sheet. Quite apart from Fairpoint being listed on AIM here at Shares and Stock Market financial firms have a special risk category that makes them a no-go area due to the historical instances of cavalier boards of financial … [Read more...] about Fairpoint Group: Why I Avoid Financial Stocks
it is the most aggressive and risky purchase within the portfolio and success or failure rests with the board and their ability to drive the business forward whilst maintaining the integrity of the balance sheet. This is what I had to say about it St Ives the last time I bought a position and today St Ives announced a property sale to the tune of £5.7 million which they will … [Read more...] about St Ives (LSE: SIV) Reduces Net Debt But There Is Still More To Do
The price to book ratio has always been a default metric with which many value investors start to get a sense of the intrinsic valuation of a business before engaging in more in-depth research. Benjamin Graham and his seminal work The Intelligent Investor has been the go-to book for individuals who are serious about learning the art of value investing and will remain so for … [Read more...] about How To Invest In Stocks Like Benjamin Graham
Warning: some of the material below you may find offensive Well my first so called Twitter beef has finally arrived with a delightful opening gambit which I'll share below but I'm loathed to write a post like this because it diverts attention away from reading financial statements: @djthomas You're such an ill-informed wanker, i'm not even in KIBO but would like to point … [Read more...] about I’ve Been Issued A Declaration Of War… On Twitter
I remember we owned stock in Schenley back in 1960 or so when it was selling below working capital. I went to talk to their treasurer. At that time, their stock was selling at $20 and they had $33 of working capital, including a huge inventory. I was asking how good their inventory was. In the course of our conversation, he said, "We've spent $100 per share on … [Read more...] about Walter Schloss On Book Value
When I last covered Kibo Mining (LSE: KIBO) in April, one of the issues raised was the massive amount of intangibles: The intangibles make up the vast majority of assets and frankly they are not worth the paper they are written on: what good is an asset if it leads to operational losses, technically that makes it a liability. 20 April, David Thomas Yesterday's annual … [Read more...] about More Balance Sheet Baloney From Kibo Mining
I think the gold markets have bottomed. I think they bottomed last summer So says Rick Rule, the best-known natural resource investor in the world last month. There is some room on the individual balance sheets after four years of deleveraging, which means that we are seeing a bit of pick up in consumer spending. But what we aren't seeing is a pick up in individual income, … [Read more...] about I Think The Gold Markets Have Bottomed. I Think They Bottomed Last Summer.
There is a raging discussion going on in one of the Linkedin groups I'm a member of that has taken many twists and turns and highlights why Graham and Dodd are relevant today. The current discussion is on whether or not Apple Inc (NASDAQ: AAPL) represents a Graham and Dodd stock at today's prices. The only way to answer this question is to: Identify the criteria that … [Read more...] about Why Graham And Dodd Is Still Relevant Today
A balance sheet also sometimes referred to as a statement of financial position is a document prepared by an accountant that shows you what a company owns and what it owes. Companies are required by law to publish their accounts including the balance sheet every year at a minimum but may also publish their accounts every 3 months (US) or 6 months (UK). This is what Bruce … [Read more...] about What Is A Balance Sheet?
When my students are stuck for ideas on how to conceptualise what they've learnt, I tell them straight: "puke out all of your ideas onto the page, no matter how far fetched or 'weird' you think your thoughts are. Just write it all down until you can't think of anything else." Almost immediately, students begin to think about organising their own ideas into a coherent format so … [Read more...] about How To Research Undervalued Stocks
If you are new to value investing and are not sure that you are doing the right thing, this post is for you. It has 3 basic things you need to know about value investing to help you get up to speed. Be sure to click on the links that appear throughout this article to deepen your understanding. Must Read Posts Take a quick look at How To Value A Company; The Lazy Investors … [Read more...] about 3 Basic Things You Need To Know About Value Investing