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Wasn't he offered the option to settle? If you are a billionaire and guilty of something why wouldn't you pay a few million to quietly settle the issue? innocent.

You overcome it by realizing the guys who own or are short the stock have read everything about the company including all the annuals/Q reports. You must assume they are several steps ahead of you and if you cut corners before making a concentrated bet you are the patsy and you will lose your money. Fear of losing your savings and respect for the market should motivate you.

I'll just refer back to what BG said about growth. Also, all things equal, I believe buying $1 you can see today is always better than buying $1 you won't see until tomorrow. On neg growth.. ignoring growth doesn't mean assuming flat revenue going forward. The lower end of your IV calculation should be based on a worst case scenario. Looking at the worse case scenario is my interpretation of what value investing is. You assume a worst case scenario, and if the price is still well below this value, that is when you buy. Because of this view by definition i have to ignore growth and assume negative revenue bc that will determine my intrinsic value estimate. But again a lot of how you view this depends on your style of investing.

You are taking that formula out of context BG promoted using logic, common sense and sound business practices for valuation, not an arbitrary formula or a future guess of growth. And i never said WB doesn't look at growth. The point is simply why look for a moat/growth when you can look for a company trading at .25 or .50 on the dollar and all you need as a catalyst is a reversion to mean back to normalized earnings. This is what value investing is, why make it more complicated or force the issue. If i add moats and growth to the thesis it brings an extra and significant element of risk that i do not want to deal with. I believe the way people invest has a lot to do with their personality, so we probably won't agree on this.

Interesting perspective. I think ignoring growth in value investing is a bad idea because growth often has a huge impact on the value, particularly long-term value. Buffett's perspective in his 1992 letter seems to match my perspective (his italics, not mine): Of course, since we're just talking about terminology, everyone's right--one can define "value investing" any way one likes. Your last statement pretty much sums it up, Buffett admitted he drifted away from BG and more towards Fisher and Munger. So his definition of value has changed. I'll go back to what BG said about buying growth: 1) wall street loves sweetheart growth companies and as a result growth is more likely to be priced in and 2) you have to be in before it is priced into the stock and you have to be right in your future projections. That is a double whammy hurdle. Extra links in the probability chain. It increases risk because it requires more guesswork and you are up against more competition. On top of that these billion $ hedge funds with tons of resources can't even guess growth right. Ignoring growth just makes sense to me..........unless the market goes up and no value is left then you BUY BUY BUY like 1999!

Ignore BV. Book value means nothing. Citigroup has been trading at less than TBV for how many years how. Look at their earnings. The most important thing for banks is their deposit base, and how sticky these deposits are (i.e. retail checking is the stickiest). That is where all the value comes from. At the end of the day the core business model for banks is to get cheap funding through deposits and make a spread from loans or buying bonds. If you want to calculate future earnings you have to look at the assets/liabilities and interest rate sensitivity (problem here predicting interest rates going forward good luck with that). Also banks use a lot of suspect accounting when booking provision for loan losses, mortgage servicing and interest amortization so you have smooth these out over time (i.e. in 2009 Wells fargo "took a bath" on the wachovia's loans - they over "expensed" it and eventually this expense was reversed and came back into income). Also i think most US banks are fairly valued at point. If you buy these you really need a very high conviction that rates are going much higher.

You guys sound like a bunch of nevada turkeys. Value investing and "growth" are not mutually exclusive. But a value investment is one where you buy based on a price that is below a value based on a conservative estimate of earnings that ignores "growth". Value investors buy cigar butts and ignore growth. Warren buffett drifted from this because he had to, when you get that big finding cigar butts becomes near impossible. Value investing is cyclical. 2008/2009 (everything), 2011 (banks), and 2016 (energy) all saw crashes in the market or a specific sector. That is where and when you make your money as a value investor. If you weren't buying during these crashes (or at least trying) you are not a value investor. You are merely a nevada turkey. Edit: My main point above is that value investing is not dead. It will never die because people are people and they will never change. Fear and greed and not straying from the crowd is so deeply embedded within us from our hairy tree climbing ancestors whose main objective in life was getting sex, not straying from the tribe and finding food (while trying not to become food). Value investing will never die. Benjamin Grossbaum < respect the name boy.

Sort of funny you say this considering one of the most vocal Chanos bear positions has been on China for the last 5 years. I agree that Chanos hasn't always been successful, running a short only book is just incredibly difficult and probably makes you stretch on deals, but I do think many of his calls (like Enron) have been damn impressive. I haven't done the work on LNG, although so far Chanos results have not been buffoon-ish (published short position in October / price around 47, now around 32). Don't know your entry point however. If you're looking for a cartoonish short, I think Left may be more promising... The china short is more of an insurance play and I never payed much attention to Chanos regarding China. I think we should probably agree to disagree on Chanos. He did make money on LNG and the stock can go much lower short term. But what he said about the company was misleading - I'd go as far as saying it was pure BS - the way i look at it is he made money by misleading other investors. That said i am not complaining bc that created a buying opportunity and i will buy the stock all the way down from these levels. Left we can both agree on.

The only thing I am considering going short on is anything China. You are short LNG!!!! I am VERY long LNG. Good luck though ;) Chanos is short too, but when he went public and explained why he was short it made no sense - anyways I always thought the guy was kind of a buffoon (he reminds me of a guy I know who is always the skeptic and sounds smart to people who don't know him but is really full of shit).......sorry to his fans on the board but I don't like the guy. I think Icahn agrees. http://www.cnbc.com/id/100727811

Cheniere is not a play on commodity prices, that might sound ridiculous considering it sells liquid natural gas, but the core theme behind the investment is not a rebound in commodities prices. Actually you could make a very good argument that low natural gas prices, and even low oil, will help Cheniere bc it is a low cost provider. The company gets paid a fixed fee from customers. Any rebound in international LNG prices is just additional upside.