Stock valuation in an age of intangible assets
About forty years ago Buffett experienced a Damascene conversion
Part 7: Building and Managing a Portfolio
An all bank portfolio, ETFs and mistaken notions of diversification and balance
As the play, The Merchant of Venice, unfolds, all of Antonio’s ships sink, his business collapses and Shylock demands his pound of flesh.
Analysts’ reports and the estimate revision game
Even with overly optimistic earnings estimates companies regularly ‘beat’ the estimates. What gives?
The pitfalls of a sector rotation strategy
Investing based essentially on the business cycle outlook is a fools’ game.
Conservative investors win – conventional investors lose
Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally
How Warren Buffett goes about valuing companies
We are going to want to get a significantly higher return, obviously — in terms of cash produced relative to the amount we’re outlaying now — for a business than we are from a government bond. That has to be the yardstick at a base.
The dangers and benefits of using Discounted Cash Flow analysis reports
Opinions of fair value based on DCF calculations are necessarily inexact (rightly vague?). But, at least they at least ask the right question.
How to get the most out of analysts’ reports
Since analysts’ reports are so important in our work of identifying and studying companies to invest in, we need to look at the strengths and weaknesses of these reports.
What is the right price earnings ratio?
Price earnings ratios are a frail and shifting basis for determining fair value. They do not force investors to think through all the factors that go into a deep assessment of fair value.
The common misuse of charts
These charts tend to exaggerate recent prices and understate older prices. As the time period increases the distortions of the chart increase.