WolfOfMainStreet

This is great. He presents the information with limited commentary, I subscribed. I'm looking for something exactly like this for the rest. Patmo thanks for yours too.

I'm not exposed to enough accounting and (somewhat unbiased) economic news as I'd like. Inevitably, the way we record financial information and general economic trends affect our rough estimate of intrinsic value for most companies. This board has several great discussions about some of these topics but I'm looking for a news source that comes out periodically. I read Bloomberg Businessweek on a weekly basis but it doesn't cover those topics as much as I'd like. So sum up here's what I'm looking for: Accounting -What new standards and rules are coming out? -What rules/standards are being proposed and how far long are they in the process? -Are there any major shifts in recording data under the current rules? For example, are lots of companies in industry "x" going from LIFO to FIFO? Economics/Broad Finance -Reader's digest version of BLS, Fed, and ECB releases. -What's going on in banking that matters? New rules, regulations, structural shifts, etc. -What's going on with LBOs, M&As, VC firms, bankruptcies and other financial transactions? Are they moving to larger or smaller companies? Are they moving into specific industries? I know that some of these points are pretty broad. I'm not looking for just two periodical information sources. I want things that will hit on these main points but won't be 500+ pages of reading per week. Right now I'm finding bits of pieces of information on these from various major sources (WSJ, Businessweek, Economist, FT, etc.) but I have no stable news sources that repeatedly hit on these points. Thank you!

Evidence is anecdotal. But a lot of these activities are centered around the idea of synergy, aka job cuts. The hope is capital created this way may find its way into creating more productive activity. Nobody really tabulates statistics in this fashion, but the creative destruction process works in mysterious ways. On the margin, he could be correct. So to sum up and to add a bit on: Here's what I think about when he says "borrowing from the future" in regards to these activities. As interest rates remain low for a prolonged period these synergy activities will trickle down to smaller firms, e.g. 1435 announced M&A deals below $100m for 2015. Some of these bankers/managers are not the best capital allocators. Usually these firms are too small to move the needle. However, in the aggregate and over a longer time period they'll get too irresponsible with the capital/job cuts enough to move the needle. To compound their troubles, a raise in interest rates will raise the payments on the floating rate portion of their debt. I'm using size here as a proxy for capital irresponsibility but there's probably a better metric. Sound about right? MA_Trends_From_SP_Capital_IQ_Global_Markets_Intelligence_-__3-31-2015.pdf

Does anyone have any data that supports his claim that lots of debt is used for job destructive LBOs/M&As? I was just talking about this with a friend of mine. If these financial moves cut jobs significantly on average then aggregate demand will go down and the LBO/M&A return would be affected as well. Kind of like a double edged sword beyond some threshold.

The more things change, the more they stay the same. Thought you guys might appreciate this: https://docs.google.com/viewer?url=http://64.62.200.70/PERIODICAL/PDF/Munseys-1920feb/45-55/

This is awesome

Allan Mecham is now in IBKR: http://whalewisdom.com/filer/arlington-value-capital-llc

Gio and cubs thanks this is exactly what I was looking for! Any other input is greatly appreciated.

Hey all, A good friend of mine is looking to open a business but he has no knowledge of finance/accounting. I convinced him to take the time to read a few books to at least get a basic working knowledge of business before any money leaves his pocket. Does anybody know a good book for beginning business owners that has lots of practical accounting and financial knowledge? Looking for something that's not too long written in plain simple to understand English. The book doesn't have to be elaborate, just very practical. I will fill in any of the gaps if he has specific questions but I don't want to teach him everything from assets to managing cash flows. Thanks

I think with a 1000$ you should aim to have one or two positions so that frictions costs are tolerable. I would suggest 50% index fund (S&P 500) and another stock. Aim to keep the S&P500 long term (10Y) and the stock medium term (3-5Y). The good news is that a 1000$ any major mistakes will be offset by your new savings. As your nest egg gets bigger you increase the amount of positions to your desired level (10 maybe?). As for the broker choice, take a broker that does not charge monthly fees. With that amount the fees would eat into your savings quite fast. One thing that is important is to no be trigger happy, friction fees will be running in the 1-2% for each transaction which will kill any outperformance. Forget dividends, and focus on capital appreciation, do you really care about those 30$ in dividends? It's not like you need it to live on right. Ah yes, don't forget that your risk tolerance is whatever does not make you lose sleep at night! BeerBaron Thanks! Sounds like a good idea. Just curious, what broker do you use? Anyone have specific cheap ones that they've used for a while?

I am willing to tolerate risk if the price is right. These $1,000 are the bulk of my savings which I want to worry the least about. I have a couple of hundred that I will definitely invest on different ideas of mine to get more experience with capital appreciation. I'm cool with losing the couple of hundred but I still need the bulk of the $1,000 in case I need cash. Also, what's the absolute cheapest online broker you guys know of? If the trading fees are low enough I might consider using some of the $1,000 on my own ideas as well because otherwise the brokerage fees are too much. I'm not cool with paying $10 to buy and another $10 to sell a $100 position. My capital needs to appreciate by 20% just to break even.

Hello all, Looking to finally throw my savings into the market. I'm looking for a no-load no minimum amount investment fund. Looking for something adequately diversified (stocks, bonds, international) that has a long track record for stable returns. I want to be able to beat out inflation after taxes so the fund needs to have at least a 5% annual dividend. Also, I am looking for the cheapest online broker that will do this for me. I have only $1,000 to invest so trading fees need to be pretty low. Anyone have some great funds out there? Looking for input from long time share holders. Thanks :)

McKinsey's Valuation interests me... I've read a few reviews on Amazon, but I'd love to get your opinion (or anyone else here who has read it) on why you think it's good and useful, and the kind of stuff that it does well. Is the thinking in the book directly compatible with value investing, or is it more general tools that you can then try to transpose to a different approach? Has anyone read Investment Valuation by Damodaran? Seems like another interesting one. McKinsey's book changed the way I thought about business performance. The book clearly articulated the rationale for ROIC, and, more importantly, understanding invested capital from both a financing and operating perspective. Further, the book clearly articulated the link between ROIC and FCF generation. It has the flaws of any academic finance book (building capital costs using the accepted methodologies), but if I had to recommend one book, and one book only, it'd probably be this one. Now that I've just written this, I realized I gave my copy to a colleague/friend, but I don't recall who. This is a problem. Thanks, sounds like all the stuff I was looking for. When you said it's flawed in the sense of building capital costs using the accepted methodologies do you mean CAPM and WACC? What would you say gets over these flaws? Also I found it here: http://upload.studwork.org/order/9056/Valuation__Measuring_and_Managing_the_Value_of_Companies__5th_Edition__University_Edition_.pdf

Happy birthday and a happy Fourth of July! Thanks for your work with this fantastic forum

What are your opinions on McKinsey vs. Damodaran (general differences)? If you had to pick one starting out which would you go with and why? Just by glancing over the contents I am getting a feeling that Damodaran lays out the different valuation models and where to use what. It also looks like McKinsey builds on the idea of value and then branches off from there. Did I get that about right? Also, what models do you use more often? Thanks in advance, trying to build a good reading list for my weekends during the semester. I go nuts if I don't read a couple hundred pages of something every week :) P.S. McKinsey's latest version is 2010 and Damodaran is 2012, I know the meat of the text probably hasn't changed much but maybe some of the post recession examples have. Has anyone read the most recent editions of each? Any notable differences?

So I've been reading "The Intelligent Investor" with commentary by Jason Zweig (about half done). Love the book, Graham's logic, and I enjoy the commentary. I have around 18 pages of written notes that I review from time to time. I noticed that roughly the first half of the book goes into the theory of being an Intelligent Investor and the second half goes into the more technical details. Graham refers to "Security Analysis" and "The Interpretation of Financial Statements" to answer the reader's more technical questions about financial analysis or to give a basic introduction to financial reporting. Both of these books were written in the 1930s and accounting methods and laws have changed. After describing the financial statement shenanigans that accountants can do Zweig suggests the following books: Martin Fridson and Fernando Alvarez’s "Financial Statement Analysis" Charles Mulford and Eugene Comiskey’s "The Financial Numbers Game" Howard Schilit’s "Financial Shenanigans" Before I even touch a single stock I promised myself that I would finish at least a couple of books with the caliber of "The Intelligent Investor" and that I would get a firm grip on understanding financial reporting. I've already taken a financial accounting course so I understand things like LIFO/FIFO, depreciation, capex/expenditures, basic ratios (ROA/ROE/PE/EPS), PS/CS/options/dilution, etc. at least on a basic level. Is there a good book out there on understanding financial reporting through the eyes of an intelligent investor? I don't want something like "Accounting for Dummies", more of a "Looking at financial statements through the eyes of Buffett" type of book. Also, has anyone read any of the texts Zweig suggested? Are they any good?

CEO, CFO and CAO at the same time??? http://cdn.wegotthiscovered.com/wp-content/uploads/wolf-of-wall-street-02_0.jpg You can't just make this stuff up, man must be a legend. He's a doctor too apparently. http://www.quickmeme.com/img/75/75b36407ad5678b7a9150525902ca39b57a99b1b492a189d9e34ecc79c6aafdd.jpg

More laughs: "Mr. Marlon L. Sanchez is President, CEO, CFO, Secretary, Treasurer & CAO at Cynk Technology Corp. and Partner at Sanchez Medical Services" http://www.4-traders.com/business-leaders/Marlon-Sanchez-0D46SL-E/biography/ What do you say guys (and gals)? Seems like an honest Joe. I mean Facebook and LinkedIn are kind of getting boring, maybe he's got a good idea here? I mean he's like a CEO, CFO, and CAO looks like he knows his stuff.

People are being that stupid left and right in this market. Creates lots of opportunities for us haha Also: http://www.otcmarkets.com/financialReportViewer?symbol=CYNK&id=122455

Based on his portfolio, I think Mecham is more focused on earning power than book value. He might be willing to pay a significant premium for a company with high ROE and promising reinvestment opportunities (AKA "compounder"). So basically what you're saying is that he pays the premium and the bet is that management/moat will compound growth so that the firm will still trade at a premium in the future but he will have paid a lot less for that company since he bought and held. His is a more qualitative approach than quantitative. What if management dies/changes or there is no longer a moat due to some technological/other change? Graham wrote that paying such a premium automatically assumes risk since you are betting the company will keep growing. In the case of liquidation or downsizing a company will lose the premium and then some due to these events. Seems risky.

Just discovered Allan through this post. Amazing guy, I can't stop reading about him. It made me smile when he mentioned Dan Ariely's Predictably Irrational. I read it a few months ago and I loved it. Took a couple of pages of notes on the interview and some of what he is saying it straight out of Graham's Security Analysis. In the 2010 interview he mentions that he stress tests a company's staying power based on macroeconomic events such as changes in interest rates or employment. Can anyone give me a specific example as to where this would apply? I can see how an increase in interest rates might be good for an insurance company investing out the float into bonds but bad for a retail company that relies on borrowing to fund inventory. How about unemployment? Any other macro events that he may be referring to? Also, some of the stocks such as DFZ, CHRW, CPRT, and VPRT are trading at a significant premium to book value (excluding intangibles). For Mecham, does the staying power, Porter's Five Forces model, and management support buying at this premium? Or does he somehow look at the past relationships between P/BV and create some sort of range? I'm just trying to grasp his investment method. I understand that stock price fluctuates much more than BV but what justifies a company as being too cheap or too expensive when paying such a premium to BV?

Just came back. Honestly I was going in there with the mind set of taking anything available because I wanted to get my foot into the door to at least have somewhat of an opportunity to climb up. My homework paid off, I got offered an administrative assistant position and he hopes to make me a part time insurance broker soon. Still waiting for him the get back to me. They also deal with some money managing but they are very conservative. They do not touch any OTC stuff (sad face) but maybe I can still prove myself on the investing side. I can't stop myself from researching stocks even if I tried!

\ First off, thanks for the info and I really hope I do well. For this specific example would the reserves be "Reserves for policy holder benefits"? http://www.ar.guardianlife.com/2013_AnnualReport.pdf (2013 Report) http://www.guardianlife.com/glife11pp/groups/camp_internet/@stellent_camp_website_glife_corpcomm_edits/documents/document/2012guardianannualreport.pdf (2012 report) If that is it, it grew from about 28 bil to 32 bil. In 2013 there was only a 776 million dividend declared. Is that good or bad? Thanks

So after months of searching and asking around I finally landed an interview at a mid sized financial firm. They deal with a lot of life insurance and some securities trading. Tomorrow I will be interviewing in their headquarters. A couple of weeks ago I had the opportunity to attend their quarterly meeting and I liked the company atmosphere. I really don't know much about insurance but I do know a little (tiny) bit about value investing. Does anyone have some quick links that they can share or some basic information about the insurance business? They don't expect me to know anything walking through the door but I want to make sure to do my homework. The fun fact I know is that Buffett got into insurance because he could invest the float.

Wow awesome thanks for the link. Definitely food for thought. A lot of stuff in your first post makes sense to me. Thankfully I am getting this degree on the cheap. Looking at around 40k in total debt if I pay nothing until I'm done with my master's. I only have to start paying 6 months after I'm out and in the meantime the interest does not compound on itself, it only accrues on the principal. I'm probably going to pick up a few internships along the way and bring that number down. As for Oddball Stocks, it is my favorite stock blog. I feel like I learn more in one post than a semester's worth of class. In between studying I'll usually read a post. Keeps me sane during long hours of cramming. Appreciate all the feedback guys :)