Value investing seminar in London

This video clip is 3 hours long and is conducted by Professor Bruce Greenwald from columbia University on behalf of Gabelli Asset Management. Fantastic Seminar! Enjoy!

http://gabelli.savvislive.com/ValueInvestingSeminar/


Better and better,
Lucas

Speech By Professor Sanjay

Fantastic article with a great deal of information. Have fun reading people!



http://www.capitalideasonline.com/articles/index.php?id=694



Better and better,
Lucas

Value Investing 101

http://www.fool.com/investing/general/2004/08/09/value-investing-101.aspx

Have fun reading people!

Cheers,
Lucas

Return on equity- an important metric

The return on equity is a very important metric. Why? It can be decomposed into a formula equating to = sales/assets x net income/sales x assets/equity

Sales/Assets is the asset turnover. It is the sales generated with a fixed amount of asset base. You would want this figure to be higher than industry average as you would expect the company to maximise its assets that it has. The best case scenario in this case is high sales over low asset base. An example of such a company i would presume is a company such as See's candies. It has a low asset base and relies heavily on its intangibles to deliver a high ratio. Warren Buffet would like his companies to have strong brands for the value of a brand is priceless. Therefore, in actual fact, See's candies has a low asset base and and relatively larger portion of intangible assets which cannot be accounted for in this ratio.

The 2nd component of return on equity is the profit margins. You would want the profit margins to be higher than industry average. This would show that the company has a certain moat to it.


The case is that high profit margins and high sales turnover would magnify your return on equity. The other reason why an investor should focus on this number is that if you did invest in equity of the company, this is the metric that will tell you your returns as an investor. The higher the number, the better without an increment in debt. Beware though for all a company has to do to boost this number is take on loads of debt for that will reduce the equity base and cause the return on equity to be higher than normal. Hence, it would thus make sense to me to look at the return on equity historically for at least the past 5 years.

Cheers,
Lucas

Standing on the shoulders of greats!

Dear people,

for those who are newbies to investing or rather value investing in particular, one should contemplate 'standing on the shoulders of giants' in Albert Einstein's own words. In effect, it applies not just to science but to also investing. In fact, there is a system or a way or method to follow the great investors of our time.

The next question that one may ask is even if we did follow these investor greats, wouldn`t we be late to the party? My answer to that is "No". Value investing in fact entails an investor holding undervalued stocks with an outlook of 2 to 5 years for the undervalued price and intrinsic value to narrow. Value investors are also not market timers. Even if one was indeed late to the party, one could still get the undervalued security at a price better than what the Investing geniuses got. For example, Warren Buffet did did buy into Anheuser Busch at around $46 - $48. From there we could concur that at such a price range , Anheuser Busch was indeed undervalued. Hence, one can keep a close lookout for the stock from there after it is reported in the filings. In actual fact, the stock did fall to $44. So there you go! If you had scooped the stocks up at $44, you would have gotten it at a better price than Warren Buffet the genius himself. Today, Anheuser Busch sells for $52.14 half a year later, a decent return of 18.5%.

Now, where shall we get such information one may ask. One can simply get it from a website filings called www.gurufocus.com or from the SEC filings of these Investor greats.

Please bear in mind that coatailing in fact is just the starting point of narrowing down your selection of stocks. From looking at what the greats buy, one can select a portfolio of 8-10 stocks that he/she is comfortable with and that can beat the market.

The list of gurus that investors could aim to coatail are:


Warren Buffett
Wallace Weitz
Tweedy Browne
Tom Gayner
Seth Klarman
Ruane Cunniff
Ronald Muhlenkamp
Ron Baron
Robert Rodriguez
Robert Olstein
Richard Aster Jr
Michael Price
Mason Hawkins
Martin Whitman
John Keeley
Joel Greenblatt
Ian Cumming
Glenn Greenberg
George Soros
Edward Owens
Edward Lampert
Dodge & Cox
David Swensen
David Dreman
Charles de Vaulx
Charles Brandes
Bruce Sherman
Bruce Berkowitz
Brian Rogers
Bill Nygren
Bill Miller
Arnold Van Den Berg