I think we have become leaders in the value investment industry for buying companies where intangibles have become their largest asset and you can’t see from a price to earnings or price to book how cheap the company is
The way things are, the only numbers of use to an investor from a Balance Sheet relate to debt. The expensing of investments in intangibles of lasting value creates a distortion that completely undermines the use of the Income Statement. Reported earnings are not only useless for investors but also misleading for the unwary.
A high ratio of price to book value, a high price-earnings ratio, and a low dividend yield – are in no way inconsistent with a ‘value’ purchase.
They must avoid the temptation to say that lady luck owes them one and take outsized risks
Distill the secrets of sound investment into three words
We think the very term ‘value investing’ is redundant. What is ‘investing’ if it is not the act of seeking value at least sufficient to justify the amount paid?
Buffett analyzed companies more subjectively than Graham, and he found intrinsic value in companies, such as See’s Candies, that Graham would not have touched.
Using trailing twelve months earnings that are impacted by a recession is a mistake
Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio’s market value.
What is ‘investing’ if it is not the act of seeking value at least sufficient to justify the amount paid?
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