cobafdek

I would amplify this by saying all of the capex should not be subtracted. Capex is made up of maintenance capex + growth capex. Only maintenance capex should be deducted, and this is frequently approximated by D&A expense. The hard part is estimating how much of total capex is really growth capex, and most companies do not explicitly break this down for us.

Mauboussin's first book: http://www.amazon.com/Expectations-Investing-Reading-Prices-Returns/dp/159139127X/ref=sr_1_1?ie=UTF8&qid=1408633868&sr=8-1&keywords=expectations+investing It was an interesting read, and educational for me at the time, but I don't use it. I do keep the book on my shelf, and pull it out once in a while, just to look at the blurb on the back cover by Jeffrey Skilling, as a cautionary reminder.

Dave Ramsey is good, but conventional. Mr. Money Mustache is better. http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-hero-in-one-blog-post/ Monitoring liquid net worth is important, but MMM recommends giving equal, if not more, attention to your expenses. Once your savings reach about 25X your expenses, you can retire from your day job (in other words, 4% annual withdrawal rate from your savings to maintain your lifestyle). Therefore, the smaller your expenses, the quicker you'll be able to retire. So consider being an unconventional saver by radically cutting your household expenses, and I wouldn't be surprised to see you retired by age 35-40. This goal would be possible if you were only index investing. You're already unconventional enough to subscribe in value investing. Best wishes.

[amazonsearch]Rock Breaks Scissors: A Practical Guide to Outguessing and Outwitting Almost Everybody[/amazonsearch] Especially for Fortune's Formula fans. I browsed this at the bookstore, focusing mainly on the last chapter, which dealt with the stock market. Basic but decent discussion of Schiller's PE, with a sensible strategy of employing it for index fund investors. I wonder how many such average investors will employ it, let alone stick to index investing. Not much here for value investing aficionados, other than maybe adding a plank or two to your latticework of mental models. Might be useful in other areas of life. Haven't decided yet to buy it. I'll probably borrow it from the library. In the spirit of this book, any wagers on whether Munger will tout this book at the upcoming Daily Journal meeting, or next year's BRK annual?

I recently read "The Wisdom of Insecurity" by Alan Watts. Perhaps it will hit the spot. http://www.amazon.com/Wisdom-Insecurity-Message-Anxiety-Vintage/dp/0307741206/ref=sr_1_1_ha?s=books&ie=UTF8&qid=1408168744&sr=1-1&keywords=the+wisdom+of+insecurity

I would ask why you would NOT want value investing principles to spillover everywhere. It all depends on how broad is the concept of value. If your wife wants that expensive dress and shoes, you buy it for her because that dollar figure pales in comparison to the value of your relationship with her (what it says about her is another matter - let's not go there!) It's another form of value investing: you're getting value for value. This message board is a big tent. We're all value investors here, from those who buy the scuzziest third-world net-net to those who buy Amazon and Resverlogix. Might as well expand that to include your wife's clothes, shoes, and Boxster. As Epictetus says, "It is impossible for a man to think that a thing is advantageous to him, and not choose it."

I've been patiently monitoring this thread like a Mike Godwin, fascinated by its length despite it being off-topic. But my faith is restored: Godwin's Law is fulfilled. You missed the source, though: http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/drugs-and-prostitution/msg183926/#msg183926 Corrected. Must have fallen asleep. Taking no sides in this thread. Just having fun.

I've been patiently monitoring this thread like a Mike Godwin, fascinated by its length despite it being off-topic. But my faith is restored: Godwin's Law is fulfilled.

To me this sounds like the $1,000 is what financial planners call an emergency fund, in which case this should stay in 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. If it's not emergency cash, I think you'll find the starting amount of $1,000 is a major limiting factor. I use TDAmeritrade ($9.99/trade), E-trade ($9.99/trade), and Fidelity ($7.99/trade). You can open an account with the first two with any amount, but Fidelity has a minimum opening amount of $2,500. They all have a selection of commission-free ETFs, but only TDAmeritrade has some of the Vanguard ETFs which are known for their low (0.10% or so) expense ratios. TimEriksen and beer baron make an excellent point about focusing on capital appreciation. Theoretically, if you really needed the dividends, you could sell off 5% of your funds and generate your own "dividend income," assuming your capital has appreciated more than 5% in a year. You could do this with commission-free index ETFs. I wouldn't get too hung up about differences in discount brokerage commissions, e.g., $2.50 vs $9.99. There are some arcane back office practices at these discounters that are largely hidden from the public. They can make up the difference by steering your orders to trading platforms that execute your orders at non-advantageous prices to you, and then send a rebate to the discount broker. These "fees" are embedded in their reported executed price, thus undisclosed to you the customer. http://www.usatoday.com/story/money/markets/2014/06/17/senate-high-frequency-trading-hearing/10624737/ So at your $1,000 capital level, I would avoid individual stock trades and stick with commission-free index ETFs with one of the larger discount brokers.

This point is key, and hits a very subtle nail right on the head. I doubt that even that famous value investor in AMZN, Bill Miller, would argue like some of the above. He would probably cite his colleague Mauboussin's paper http://www.michaelmauboussin.com/excerpts/MTYKexcerpt.pdf

5% dividend is unrealistic, even for all-bond funds. Maybe consider a brokerage account with TDAmeritrade, which has some commission-free ETFs, including some Vanguard ETFs. VIG might be a fairly good choice, about 2% yield, and low-fee of 0.10%.

That's funny - I've spent only a little time on this last week, bought a few, only to see prices for my picks go down with me. Must be some curse on us value investors (short-term only, I hope). Sorry for the cold comfort. The gods are laughing at us right now.

Thanks, all. This approach accords with my experience with English language 10Ks as well! I'll revisit the question I brought up in a related thread, which is when to sell. Assuming I will have only these essential metrics in the future, with no plans of acting like a faux owner/operator, I will sell in 3-5 years if the stock is dead-in-the water, or when it reaches NCAV, whichever comes first. West had an interesting approach, loosely based on the magicformula yearly-turnover tactic (see the Car Mate thread). But in general, I'm with writser, and will procrastinate when it comes to the actual time of sell-decision. Any other approaches would be welcome to hear.

The Japanese equivalent of the SEC filings page is EDINET: http://disclosure.edinet-fsa.go.jp/EKW0EZ1001.html . If you run a search query you can view the resulting documents online or download them either as PDF or XBRL. Download the XBRL version (it's a zipfile), unzip it somewhere and you can open the HTML-files it contains with Chrome. How are your Google Translates working with Japanese? My past experience has resulted in some bizarre translations, possibly related largely to different syntax (Japanese and Korean syntax is heavily dependent on declension/conjugations, kind of like Latin, whereas English and modern European languages and even Chinese rely more on word order in sentences).

Great list. Thanks for it. I just did a quick glance of the summary stats for these. Many seem to have poor-to-middling quality of earnings, at least when merely eyeballing 5-yr net income compared to cash flow (I'll need to look more closely). Is your approach to give heaviest weight to discount-to-NCAV or discount-to-BV, and lesser weight to other considerations (such as earnings quality)? Also, are you avoiding any industries, such as retailers, specialty retailers, shipbuilding, etc.?

For what it's worth, Munger mentioned this book positively at one of the Wesco annual meetings I went to.

Well-written blog post, but still not persuasive to me because I would summarize it as "support/resistance levels work, until they don't." Nevertheless, there are successful practitioners of TA, but I would attribute those successes to TA somehow being a weird proxy for value investing. Or maybe value investing is a proxy for TA. In fact, the mechanical application of quantitative value investing methods (such as the blind selection of stocks from a screen and nothing more) will probably be no more successful than a blind and mindless application of TA methods. Some of the best legendary value investors say their on-base percentage is about 60%, so that a TA practitioner could argue that value investing doesn't work all the time either. I found Jack Schwager's interviews in his Market Wizards books very interesting and insightful (except when the top traders delve into the specific technicalities of how they use TA). Their philosophical/psychological insights and perspectives sound very much like the best value investors discussing decision-making principles. I think both camps bring something more to their stock-picking work than his own preferred dogma.

Are you then given the foreign depository receipt (the ones with ticker symbols ending in -F), or is it the actual foreign security with the foreign ticker symbol? Thanks.

Eager to hear your review if you get to read it when it comes out in a month. (Decided to post a reply since this thread looked a little lonely - no replies for a whole month - outrageous! It's as if this board thinks Kraven, with his quantitative tendencies, has morphed into HarryLong.)

Thanks for this! I had never known of this book. Years back, I read Carret's The Art of Speculation. Have you read The Art of Speculation? If so, how does A Money Mind at 90 compare?

As I said, Ben Graham would be glad to know of the Latin nerds on this message board. But my quotation quiz is a bit of a trick question. It's the epigraph Graham used prefacing The Intelligent Investor, although he used an English translation. From my 4th edition 1973 (i.e., pre-Zweig) hardback. I don't know if it was in the 1949 1st edition. Perhaps someone knows whether he was translating Greek and Latin at that stage in his career.

"Sorry for derailing the thread but I was really curious " (Since I started the thread, perhaps I have a right to derail it further!) Two appearances of Latin in this thread! Ben Graham would be pleased. Anyone know this one?: Per varios casus, per tot discrimina rerum tendimus. Someone quickly get this thread back on track. I love hearing more of these Buffett autograph-hound stories!

I am an MD. None of my non-engineer patients do what the engineers and retired engineers do: come to each office visit with spreadsheets of all their past medical vital signs, lab test results, etc. Most also bring a neatly typed brief summary of personal medical events since their last visit with me. Their medical "specifications," as they say. My office charts are a mess, but these spreadsheets and notes could virtually tidy them up and even replace them, such that there would be no need for electronic medical records (they are all junk anyway). Because of this, the engineers as a class are my favorite patients. Moreover, they are rational and therefore easiest to talk to and explain things to, and they are not given over to anxiety (which makes all illness, whether perceived or real, worse than what they are). If only all my patients could be engineers or retired engineers!

"1. Was I being a mere sucker-acolyte to buy something for a multi-billionaire, just to get his autograph? 2. Or, on the contrary, was the $15 a good value investment on my part?" These are just tongue-in-cheek questions ( I was in a whimsical mood.) I could have used these to start a poll, but thought better about it. Alas, I don't think I affected WEB's diet one whit. He has, however, gone another 10 years. Post hoc ergo propter hoc.

This year marks the tenth anniversary of my receiving a personal reply from WEB, on Berkshire stationary over his original signature. The story: That year I thought I had solved the Berkshire succession problem (or at least postpone it for a good 45 years), as well as the task of getting his autograph. I entered WEB's name and address into my gifting list at amazon.com and sent him this: http://www.amazon.com/Beyond-120-Year-Diet-Double/dp/1568581572/ref=sr_1_1?ie=UTF8&qid=1403241420&sr=8-1&keywords=beyond+the+120+year+diet+how+to+double+your+vital+years Total cost to me (book price + shipping/handling): $15.19. A week later, I got his terse reply: "Methuselah has thrown in the towel. Thanks." I think I'll frame this for posterity. 1. Was I being a mere sucker-acolyte to buy something for a multi-billionaire, just to get his autograph? 2. Or, on the contrary, was the $15 a good value investment on my part?