Value Investing

What Dan Loeb has Learned as an Investor

by Glenn Busch March 28, 2012
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At the Columbia Investment Managers Association Conference hedge fund manager Dan Loeb layed out a few of the lessons he has learned as a professional investor and Market Folly was there to capture them. One of my favorites is Dan thoughts on value investing.

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Keep Your Party Hat ~ But Don’t Lose your Head

by Gabriel Wisdom March 19, 2012
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The market years 2007, 2002-2000, 1998, 1987, and 1973 have a common theme. These were years where skeptical and reluctant investors felt they could not longer sit on the sideline while everyone else made money. In each of these periods, late-comers to the party were comforted by a familiar pattern. With stocks trending higher for several years, it began to look easy, even fun to make money. Caution gave way to complacency, and within months prices reversed course.

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Dow 15,000? Let’s Hope So…

by Gabriel Wisdom February 22, 2012
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Be wary of predictions, both because they are everywhere, and because they are usually wrong. In today’s hyper-connected, information-driven world, we are bombarded with predictions of every color and stripe. They come at us from all angles, from sports to Oscar nominees and projections and polls on political races. The world of finance is no exception in this breathless dash to proclaim what is going to happen long before it actually occurs. I’ve made many market forecasts over the years, and I’m grateful when people recall only the good ones.

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The 16 Golden Rules of Investing

by Glenn Busch February 17, 2012
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Walter Schloss, Warren Buffett’s former officemate at the Graham-Newman partnership, is one of the lesser known heros of value investing. After leaving Benjamin Graham’s firm Mr. Schloss started his own hedge fund where he generated compounded annual returns of over 15% for more than five decades. Late in his investing career Walter typed out his 16 rules for investment success. Frank Voisin of Frankly Speaking has reposted Walter’s 16 rules.

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Big Picture Bets for 2012-2020

by Gabriel Wisdom January 31, 2012
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There are over 90 million of them. Their sheer size has made it difficult to find the jobs they want and need. Reminiscent of their parents in the 1960’s, they’re angry, disenchanted, and intend to “occupy” Wall Street, main street, and those other places they’ll eventually be running. The largest generation in U.S. history will be coming of age during this decade. To successfully play this big picture bet, you’ll want to own industries and service providers they will need to raise families, build a secure future, and “live the dream.”

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Value Investing and the Terrible, Horrible, No Good, Very Bad Year

by Glenn Busch January 11, 2012
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Last year, 2011, was not the best year for a variety of value investing strategies. Jae Jun at the Old School Value Blog released his 2011 performance numbers for a handful of value investing styles and screens and it wasn’t pretty.

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Asking the Right Questions

by Glenn Busch January 10, 2012
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One common error of investors is to make things too complicated. One embodiment of this is the complex financial models found in analysts’ spreadsheets. Without a grasp of the right questions and a good dollop of wisdom, these can often obfuscate as much as enlighten. There is a reason Buffett does not even use a calculator when valuing a company.

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Dare to be a Great Investor

by Gabriel Wisdom January 9, 2012
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Logic suggests following these three simple guidelines should lead us to the new 5 and 10 baggers of this decade. So what gets in the way? Why are so few people able to buy low when no one is interested, be patient, and then sell high when everyone is willing to over pay? Investors have trouble making rational decisions when real money is at stake. Psychological stress impairs logic, distorts our reasoning, and keeps us from buying true bargains.

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Sequoia Parting Ways with Warren Buffett

by Glenn Busch January 2, 2012
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Warren Buffett turned the world onto the Sequoia Fund. Then Warren Buffett’s Berskhire Hathaway (BRK.a, BRK.b) became a top holding in the fund and helped Sequoia provide marketing beating returns. Now Sequoia is turning away from both Warren Buffett and his company.

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An Opportunity to Short Circuit City Again

by Glenn Busch December 29, 2011
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In the US the debate is whether the country can support one or zero highly profitable big box chains. Best Buy – the bears argue – is the showroom for Amazon. In Australia as I said we still have two chains – its as if Circuit City were still around. Moreover because Harvey Norman has a balance sheet it can survive quite a long time and Gerry Harvey is prone to say it is the competitor that will go out of business. But Harvey Norman really is losing share to JB Hi Fi and ultimately both will lose share to the internet.

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