Owner: Value Investing URL:http://buyvalue.blogspot.com/ Join Date: Sun, 23 Nov 2008 18:37:19 -0600 Rating:0 Site Description: Benjamin Graham, Warren Buffett Joel Greenblatt and David Dreman are among of the most popular contrarian value investors in the world. In this blog I will endeavor to talk about investments I make, or don't make, on stocks and bonds using the principals Site statistics:Click here
Buy on the Cheap (Price/Earnings) 2008-11-23 14:30:51 To follow up our Graham intro we will investigate Graham’s first insurance technique of buying on the cheap. Graham used a number of ratios to determine if a company is cheap. The first ratio we need to look at is the Price/Earnings
ratio.What is it?Market Price per ShareEPS otherwise known as (Total Earnings / Number of shares outstanding)What does it tell us?Price to earnings is a ratio that s Read more:Cheap
No Senate Bailout for Auto Industry 2008-11-20 01:20:03 Ok, at risk of tainting my own poll a friend asked me my thoughts on this question today so here we go....For the bailout plan to pass it must go though the senate first. Here are a few facts:The US is an extremely polarized country with Republicans and Democrats standing on either side of many issues. When it comes to the issue of bail outs Republicans do not fundamentally support it- it is reall Read more:Senate
TIN - Temple-Inland 2008-11-17 23:31:34 What I paid for it: Still looking thanks!What I like about it:I love to see recent insider buying. People sell stock for all sorts of reasons, but only buy stock for one reason:Low, low, low P/E 0.42, industry at 7.42 (did I read that right... yup ya did).Price to book 0.61, industry at 1.4.Current Ratio 2.19, industry at 0.92.Annual EPS growth at 77, industry at 4.16. 5 yr Dividend Growth Read more:Inland
, Temple
PSD- Puget Power 2008-11-17 23:26:53 What I paid for it: $18.00What I like about it:Fair insulation from credit problems, and recession.Good dividend yield at 4.1% (distribution Dec 1).Company due to be purchased at $30 pending one final approval (this is the big one).What I don't like about it:P/E higher than industry, sector, and S&P.Price to Sales higher than industry, sector, and S&P.Doesn't really meet any of my traditio
My history- as it relates to Investing 2008-11-17 16:18:19 After graduating from university several years ago I played with day trading as a get rich quick scheme (like so many others). I had limited success in this avenue- mostly due to the lack of funds I had as newly graduated computer sciences student. In the past few years though I have gotten married, and settled into a nice career- as such my financial situation has improved to some degree and I am Read more:Investing
Presidents and the Market 2008-12-30 09:05:45 I was flipping through some books in the book store over Christmas I saw something similar to this in the Investor's Almanac. So I borrowed the idea for this post (thanks Investor's Almanac).With President Elect Obama's swearing in ceremony coming up in about 25 days it is somewhat interesting to have a look at what the first year in office typically looks like for new U.S. presidents. President B Read more:Market
, Presidents
The Right Investment Tools For the Job 2008-12-24 17:25:25 “Give us the tools and we will finish the job.”Winston ChurchillThe evaluation of companies was once a very laborious exercise. Information about historic earnings and historic pricing information involved significant research and compilation. Today that effort is significantly reduced, thankfully there are numerous sources one can access to retrieve sets of desired information. Choosing just Read more:Right
, Tools
Graham vs. Greenblatt (Session 2) Buy America & Buy Big 2008-12-24 13:03:49 Joel Greenblatt is a modern value investor, his approach as we outlined in our previous post was to find value companies like Graham
, but he also wanted a company that has potential for the future. The first set of criteria looks very similar to Graham.What is it?Establish a minimum market capitalization (greater than $50 million is recommended).Exclude utility and financial stocks and any foreign Read more:America
Graham vs. Greenblatt (Session 3) Return on Capital 2008-12-24 12:56:19 Greenblatt in his book The Little Book that Beats the Market advocated a simple method for attaining substantial stock returns. In this series we are looking at the particulars of this investing theory to both understand why he advocated the elements of this theory and what Benjamin Graham
would have thought of the approach that Greenblatt was advocating. The next part in this series looks at Retu Read more:Return
Graham vs. Greenblatt (Session 5) Bringing it all Together 2008-12-24 12:44:46 We made it to the final installment of our Graham
vs. Greenblatt series. Throughout the series we examined each of the ratios that Greenblatt recommended in his book The Little Book that Beats the Market. The final posting will look at how Greenblatt draws the ratios together and bring this all back around, so lets get into it.What is it?Greenblatt says:“It then assigns a rank to those companies
Graham vs. Greenblatt (Session 4) Buy some cheap earnings 2008-12-21 15:39:43 In our last post we looked at Greenblatt's use of Return on Capital as a means of identifying quality companies that know how to turn a small investment into a substantial return. In this posting we will look at his next criteria earnings yield.What is it?EBITenterprise valueWhat does it tell us?EBIT is defined as Earning before Interest and Tax, as we discussed in the last posting that works out Read more:Graham
Building a Simplified Graham Value Stock Screener 2008-12-16 23:51:40 I did a search and could not for the life of me find a link to a prebuilt Google screener for Graham
's value investing system. So lets quickly build one:Through the Graham series we said we would only consider companies that:Had a P/E of less than or equal to 15.A book value of greater than or equal to 0.01.A price to book value of less than or equal to 1.5.A current ratio of more than or equal to Read more:Building
, Screener
, Stock
, Value
Graham vs. Greenblatt (Session 1) 2008-12-15 19:26:31 Graham passed away in September 21, 1976 well before Joel Greenblatt graduated from Wharton in 1979 but a linkage between the two men's investment theories is not difficult to find. Greenblatt during his time at Wharton went to great lengths to study the value approach that Graham had devised (there are stories that Greenblatt entered vast amounts of stock data by hand into a mainframe and then ra Read more:Graham
The truth about money 2008-12-14 12:12:13 I watched this series a number of years ago and found it very enlightening. After you watch the first in the series be sure to seek out the other parts on you tube.
Automotive Bailout 2008-12-13 23:08:12 A little bit of fun one today after so many serious articles. I was talking to my good friend the other day who works at a newspaper he was telling me how shocked he was that the bailout did not pass in its current form. Apparently he did not read my post in November :)This is a perfect example of Mr. Market in action. In this modern era newsrooms don't do investigative journalism, they don't have Read more:Automotive
New Design 2008-12-12 01:20:10 I was reviewing my web stats and less than 1% of viewers have a 800 x 600 resolution. So I started playing with the design a bit tonight at 800 x 600 I have made sure the text is all still very visible the sidebar goes off the screen a little. Please let me know if you like, or don't like it.
Are all insider traders created equal? 2008-12-10 14:56:06 Insider trading is the practice of purchasing shares in your own company. In accordance with the Security and Exchange Commission the purchaser must file within a few days of the transaction. Filings can be found on the SEC's edgar page.Insider trading is an important tool for value based investors. Insiders have a better understanding of their company, if nothing else they have seen the faces of Read more:traders
Buffet on the Economy 2008-12-10 14:53:34 I enjoyed this so much I thought I would share it. Clipped from a Fortune Magazine Blog earlier:Warren Buffet
t emailed this note to the directors of his company, Berkshire Hathaway (BRK.B), Tuesday after he heard that the U.S. Treasury sold $32 billion in 4-week bills at a yield of 0%: “This should be bullish for Berkshire. With great foresight, I long ago entered the mattress business in a big
Buy a Company with a Future (Based on its past) (Session 6) 2008-12-09 00:56:48 The ratios we have looked at so far tend to be a snapshot of the current condition of the company and don’t really explore a company’s history. Graham didn’t believe in investing in the next hot company, he was about buying companies with history and tangible revenues; companies where the paint on the sign out front is dry- basically boring companies. Graham also wanted a company that had Read more:Future
Buy a Company with a Future (Current Ratio) (Session 5) 2008-12-09 00:56:25 Current ratio is an important one; it shows us how the company will survive in the short term. As I mentioned earlier there are reasons why the company is currently cheap our job is to figure out why and also to build in a safety margin to make sure they are going to survive the reason they are so cheap.What is it?Current assetsCurrent liabilitiesWhat does it tell us?We are familiar working with a Read more:Current
, Future
, Ratio
Buy on the Cheap (Price/Book Ratio) (Session 4) 2008-12-09 00:56:03 If you made it through price to earnings ratio, price to book ratio will be a piece of cake.What is it?Market Price per ShareBPS otherwise known as (Book Value / Total number of Shares outstanding)What does it tell us?We looked at Price to Earnings in the previous section. Price to earnings showed us what we were paying for as it relates to money coming in the front door, but what about the stuff Read more:Cheap
, Ratio
Buy a Company with a Future (Book Value) (Session 3) 2008-12-09 00:55:44 Book Value
is a pretty easy one as compared to Price to Earnings. So let’s get into it we will need it for other calculations.What is it? (Total Assets – Intangible Assets (Goodwill) – Total Liabilities)What does it tell us?As with price to earnings ratio imagine if you will that you are buying a company but instead of running the company you are closing it out and selling off all the equipm Read more:Future
Insider Trading December Report 2008-12-09 00:35:39 Every day I pull a list of the insider traders then I shorten the list to be only buys done by roles that have a proven track record (see my previous post for a little on this). Finally I run an evaluation of the companies based on some of the ratios that Graham used to find companies that are cheap (See my earlier series on this).This is just the start for me though after a company reaches this l Read more:December
, Insider
, Trading
Insider Traders Get Hungry 2008-12-07 14:16:50 There is on old phrase, people sell stock for all sorts of reasons, but only buy them for one reason.I am a follower of insider trading, there is just too many companies to look at out there, insider trading can help raise a company onto my radar. I thought I would put up this chart I put together. Fore color are the number of transactions made by insiders (according to SEC data) back color is the Read more:Hungry
, Insider
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