oddballstocks

Ha! If there were another 50 companies that met my criteria I'd buy them too. It's becoming more of a capital problem than an idea problem.

In no order, tracker positions and cash removed: ANCPA ANACOMP INC IND NEW CL A GAV:CH CARLO GAVAZZI HOLDING AG CHF15.00 (BR) B 9476:JP CHUOKEIZAI-SHA INC NPV CDU:PT CONDURIL-ENGENHARIA SA EUR5 7591:JP EXCEL CO LTD NPV FAVS FIRST AVIATION SVCS INC CL A NEW ALGEV:FR GEVELOT EUR35 GWOX GOODHEART WILLCOX INC STAL:FR INSTALLUX SA EUR16 KRK:NZ KIRKALDIE & STAINS NPV MA MASTERCARD INC CL A ALNEX:FR NEXEYA EUR0.50 6149:JP ODAWARA ENGINEERING CO NPV PREC:FR PRECIA NPV RBRG RANDALL BEARINGS INC REOP REO PLASTICS CORP SVIN SCHEID VINEYARDS INC CL A SHFK SCHUFF INTERNATIONAL INC 9932:JP SUGIMOTO & CO NPV TTHG TITANIUM HLDGS GROUP INC 3331:JP ZAKKAYA BULLDOG CO LTD NPV 6947:JP ZUKEN INC NPV BWLA BOWL AMER INC CL A HNFSB HANOVER FOODS CORP CDT CL B IVWIX IVA WORLDWIDE FUND CL I MPAD MICROPAC INDUSTRIES INC OPST OPT SCIENCES CORP COM PDRX PD-RX PHARMACEUTICAL INC RSKIA RISK GEORGE INDS INC CDT CL A SODI SOLITRON DEVICES INC COM PAR $0.01 SSY SUNLINK HEALTH SYS INC WEBK WELLESLEY BANCORP INC COM WEIN WEST END IND BANCSHARES INC FIRT FIRST BANCTRUST CORP NEW COM FRMO FRMO CORP COM NEW KOGL KOPP GLASS INC SPCO STEPHAN CO (FL) 53994158 AVALON CORRECTIONAL SVCS INC COM TENDERED FROM CUSIP 0534361 CNRD CONRAD INDUSTRIES INC FSBW FS BANCORP INC COM NSBC NORTH ST BANCORP SVCTF SENVEST CAPITAL INC COM NPV ISIN #CA81731L1094 SEDOL #279629 SFBC SOUND FINL BANCORP INC COM UCBA UNITED CMNTY BANCORP IND COM BOTJ BANK OF THE JAMES FINL GRP INC CZWI CITIZENS COMMUNITY BANCORP INC PBCP POLONIA BANCORP INC MD WBB WESTBURY BANCORP INC WVFC WVS FINANCIAL CORP

What's your book? If you don't want to disclose publicly feel free to send a PM.

I used a Bloomberg terminal which is a little $$$ for most investors. Also, even Bloomberg isn't perfect when it comes to very small stocks - particularly in Canada. Do you have a study that shows F-Score works for Net Nets? If -ve earnings helps (still trying to get my head around this one) then F-Score might hurt. Oh, if you've links to Net-Net studies, please share :) Btw, I've been following Graham's Simple Way for years. It is a high volatility method. So high, I'm not sure many would be able to follow it. Oh, and the value premium seems to persist for ~5 years at least but I've not seen a study on it for Net Nets. I'd also opt for an equal weighting method (at least approximately). Ideally, lots of small bets. NormR, In terms of F-Score, this was the move valuable item in Quantative Value. I seem to remember they had a study in there where if you took all the stocks below 1x book value and divided them in half based on F-Score, shorted the low F-score stocks, and purchased the high F-Score stocks that strategy would outperform the market by 22% a year, that number is incredible. The problem is having the capital to do such a strategy, I don't know how much it would take, but it would certainly seem worth it. I have the Oppenheimer study, as well as a more recent study (from 1974-2008) on net-nets, shoot me an email at oddballstocks at gmail dot com and I'll send it your way. The study is fascinating in that it shows a solid outperformance, the problem is at times the portfolio is small. The paper studied buying strickly at 2/3 NCAV and selling at 1x NCAV. The outperformance was giant, but in the mid-1980s a portfolio would consist of one or two stocks.

Lots of interesting thoughts in this thread. I am sort of labeled as a net-net investor, I write the blog that has the same name as my handle. I cover a lot of net-nets on the blog, but don't dedicate my portfolio to them. I like buying things cheap, some companies at extremely low earnings, asset bargains, two pillar stocks. I hold about 50 names, maybe 15 are net-nets. I have another 15-20 that were net-nets at one point that I'm still holding. As blaine mentioned it's key to know what you're buying. A stock mentioned on this board a few times has been George Risk. I purchased them back in 2010 for $4.25 a share, I believe NCAV was about $5.25, but they had a decent little business. If I would have sold at NCAV I would have missed the run to $7 where they're at now, they're still somewhat cheap. There are net-nets I would never purchase for issues mentioned in this thread. Sometimes management has incentives to enrich themselves at the benefit of shareholders, stay away unless you can buy at a spectacular bargain. I've purchased net-nets around the world. They seem to perform the same regardless of market. Right now I have about eight names in a Japan net-net strategy where I'm buying on a very limited criteria at 2/3 of NCAV and selling at 1x NCAV. It's done well, when I can read the annual reports I will continue to hold above NCAV is something changes. There are investor communities investing and discussing UK net-nets at ADVFN, French investors discussing "daubasses" etc. This is an area of the market without as many professionals. A little self education will go a long way. As for craigatk's suggestion about Japan companies, he's right, information is hard to come by. If you can program you have an advantage, all Japanese companies release statements in xbrl. If you can write an xbrl parser you can parse all Japanese statements and put them into an English language DB. Sounds complicated, but it's a lot easier than you'd think, the xml is in English as well. If you can do this email me, I have a parser in Perl written. Packer's comment about weighting is dead on, this is where gains are made. Know the market and know it well. I've sort of fallen into knowing the unlisted/pink market pretty well. When I see a company drop 30-40% on no news with a sudden spike in volume I'm usually buying with two hands. Days like this appear when a seller will just irrationally dump an illiquid stock forcing down the price. Buyers who know their companies are able to act quickly. Positions can become larger quickly, but big gains come from these buys. Likewise always be ready to sell when the chance happens. I know Gannon likes the 3 year holding or whatever, but be nimble. I've had net-nets that went from 50% of NCAV to above NCAV in three months, I sell. If my thesis is they're worth NCAV or slightly more why am I holding for an aribitrary period of time? These are cigar butts with a last puff for a reason, when volume materializes and someone is offering to buy high sell that instant. The opportunity might not come along again.

I agree with the other posters, innovation is exploding. Maybe there aren't the big public jump conditions that everyone talks about, but innovation is happening and it's real. I like to think that the first iPhone I had in 2008 had the exact same specs as the computer I had in 1999. In 1999 I had this massive tower that sat on the floor and was loud. In 2008 I had a tiny little phone with a better screen that was silent that was as powerful as the tower. I purchased an iPad in September, my iPad is more responsive and quicker than the Macbook I have from 2008. Think about safety innovations. Look up safety numbers for different industries from 25/50/100 years ago. Industries that use to have hundreds or thousands of deaths a year have none now. Another fact is jobs that used to take teams of people are now done by one person operating a computer in a safe area. Even simple innovation is important. I think about the trucks on the freeway that now have those plates under the trailer, the wider tires, and at times the hood thing on the back of the trailer. All of those things together reduce costs and save somewhere between 10-15% in fuel costs. For trucks that drive into the millions of miles 10-15% is large. Innovation usually takes small steps forward, it only looks like giant leaps when looking back.

Yup, when asked at the AGM what is BRK's long term competitive advantage, both Warren and Charlie answered enthusiastically that it was BRK's culture and stated policy of providing a secure home for businesses whose owners wouldn't want their prized horses sold to the highest bidder who might mistreat them and when there was nothing left to give, send them to the glue factory. Ask any executive what their competitive advantage is and 95% will respond "our culture" or "our people." While I agree that Buffett and Munger have established quite a team they are not unique in thinking what makes them unique.

Nice, I owned 1 share of Hartville in an attempt to get information on the company. I see my share is up 87% today, it's a shame I didn't get the financials in time to create a position out of this.

I owned one Italian firm that I later found out was a mob related firm. I have an Italian co-worker and he tells me everything is mob related there, who knows. I sold the stock and moved on, no sense in dealing with the mob.. I love the little French firms, lots of cheap stuff there right now, I currently hold four cheap French names in the portfolio, Nexeya, Gevelot, Installux and Precia Molen. I've debated endlessly whether to buy the Credit Agricole regional banks, I think there was even a thread on the board over these things. A few other names worth investigation, Poujoulat, Tonnellerie Frere Paris. There are a few French investors on the board would could give better insight than I can.

Here's another data point, I've had a few net-nets I invested in this year that have risen to NCAV or above in less than six months. These are all 50%+ gains on stocks left for dead. These same companies with checkered pasts are reporting record profits, not a red flag but yellow for sure. I'm about 30% cash overall.

Don't be a jerk, you know very well what he means. Scott, it's actually an interesting point worth considering. Outside of a few hotels that have been operating in Japan for close to 1000 years most businesses don't last more than 40 years. They eventually go out of business or are merged away into something else. Granted 40 years is a long holding period, but still worth consideration.

I am buying lot of little companies, selected using mechanical investing. But probably most people here will find more interesting to peruse the holdings of the Bestinver funds, who are classical, Buffett-style investors. Their top euro holdings (>5%) are Exor, Wolters Kluwer, BMW, Thales. Their top iberian holdings (>5%) are Semapa, Sonae, Portugal Telecom, Corporación Financiera Alba, Acerinox. There is a small contingent on the board interested in the non-Buffett companies that you're buying in Europe. I have a lot of EUR and GBP burning holes in my pocket waiting to be invested in some tiny no name go nowhere company at a ridiculous valuation.

Not as common as demutual investors think. The demutuals have been on an absolute tear recently. Is there a way to screen for demutualizations? I think plenty of investors (like Klarman and Einhorn) made a bundle on demutualizations in the 1990s. The way they explained it, it seems like free money. It is like free money, but there are no screens for it. Mutuals file to demutualize, there are various news services that report this.

Not as common as demutual investors think. The demutuals have been on an absolute tear recently.

This is an interesting idea, a good idea for a startup. A site that allows hedge funds to post for the types of ideas they looking for and a price they'd pay for a good idea. Then users submit ideas, the fund picks their favorite and pay the outsourced analyst. The site gets a cut of the transaction. The site is simple, it could be written in a weekend or less. Issues I see are funds putting out an ad, getting ideas then never paying. There would need to be an agreement that the fund wouldn't buy any idea presented to them except ones they pay for, then some connection with their compliance officer to enforce it. Not sure why someone like SumZero isn't doing this. A bonus for submitters is the site could audit ideas, so submit, get cash and build an audited track record. I'm half tempted to build this myself if I wasn't already consumed trying to launch something. Maybe down the road..

We get our Internet from Verizon FIOS, not TV required for the connection.

Thanks, just ended up spending the last 20m watching Rush videos on YouTube, not exactly what I expected to do this morning..but enjoyable

Cut it eight years ago. Made a deal with my wife at the time that if we absolutely couldn't stand it we'd sign up for cable, no cable in sight. We have Netflix which has any kids show we'd want, and enough to keep us entertained. We're not big TV watchers so Netflix works. As for sports, since the Steelers are never blacked out we can always watch them OTA. For hockey and baseball fans there are apps that allow all the games to be streamed. One other point on games, if it's not on that's a great excuse to go to a bar and hang out with other fans to watch the game. Bars always have the games and it's a lot more fun to watch with a bunch of fans verse at home (unless you're throwing a party). Our cable bill was creeping towards $100 a month at the time. Just thinking about the savings from not having cable for that time means we're $9600 richer. Granted this is a bit of a strawman because the same could be said about any expense. If you can afford it I don't see the problem.

It depends! I have a lot of experience working from offices and home, neither is better than the other but there are big differences. The first is you need to have enough actual work to keep someone busy. This seems obvious, but if you're in an office with co-workers it might be hard to know exactly what this is. My experience is that some percentage of office time is completed wasted talking to others in the lunch room, by the water cooler, at the desk etc. These might all start as work related conversations that diverge into something about kids or sports. This is a part of normal office life, no one is a robot who works 8 straight hours. My experience with home is that I'm much more productive, I don't have to deal with a commute or many distractions that I have at the office. Therefore what might take six hours at the office might only take three or four at home. The question is what to do with the rest of the time? Also keep in mind that the person at home isn't a robot who works head down. Figure out communication before you start this. Phone and IM usually work best. Have realistic expectations, don't expect a person to ALWAYS pick up their phone on the first ring just because they're at home. People at home have lunch, go to the bathroom, take walks too just like an office. No one gets up in arms when someone's away from their desk, yet if that person is at home and doesn't answer the phone instantly some managers go crazy. Even if someone is at home they need to go "home". This is tough when at home the temptation is to always be on at work, just walking into the office and checking work email at night or looking into an issue. I know everyone claims they work 100 hours, but few actually do, and those who do constantly burn out. People need to have some sort of dividing line and a way to step away from the job, if they don't there could be unintended health consequences from the stress and fatigue.

Sleuth investor is great. Here are a few easy scuttlebutt techniques: 1) Call and get a sales quote, pretend you're a customer, see how they serve you. 2) Order the product, if they sell little parts order a few and look at the build construction 3) Search out customers, talk to them about their experience 4) Look on LinkedIn and contact former employees, send them an email saying you're doing research and want their opinion. With this expect to get emails trashing the company, probably 50% or more, but remember these are people that are gone. What you're looking for is different, you want all positives or mostly, that's huge, or all negatives with similar stories. People love to give advice and talk. 5) Check out the facilities. I will alter my routes in Pittsburgh to drive past little public companies here, after seeing some of the headquarters I'd never invest. One was in a rough area of town in a falling down apartment building, address checked out.

I should note, the metric I've seen for banks is 11x post cost take out earnings. This was in a letter from a hedge fund that looked at all of the bank mergers in the past decade and concluded that almost all of them were almost exactly at that multiple. So that's the key metric for a bank's ultimate value. The fudge factor here is how much savings a banker thinks they can achieve. I like P/TBV and a multiple on PTPP, using those together is a short hand for getting to the 11x multiple.

I have a fair bit of experience in this area, not that it matters, but I do see where the costs are down to the individual claim level.. The problem isn't people with cancer or these high cost one off issues, it's the fact that we have an unhealthy nation and insurance companies are paying a lot for coverage of ongoing issues. For example, the top drugs aren't expensive ones, they're cheap ones used by a lot of participants. If you have a company with 30k workers and 10k of them are on high blood pressure medication that adds up much quicker than the 7 people on cancer drugs. As mentioned people using doctors more than they need. But doctors aren't faultless either. They're paid on a per-visit basis, it's in their paychecks interest to see as many people as possible. So patients are going for a ton of tiny reasons and doctors are more than willing to support it because that's how they're paid. They're not paid for outcomes, just for visits. Costs are all over the place, doctors and hospitals have no idea what they're charging people. A hospital could give care to two people from different employers with the same insurance carrier and the carrier pays two different amounts for the exact same care. The problem is we're going in a bad direction. Insurance companies are worried about being locked out of the process so they're buying up hospital systems. This is the industry trend, insurance players are going all in buying hospitals. Once they own the hospital they can direct care to their facilities, and it ensures they'll never be cut out of the loop. The issue is insurance companies are profitable, hospitals are not. Profitable insurances companies are not shackling themselves with marginally profitable or money losing hospitals. The last issue is an intangible but important. The entire health system is run by doctors, they are not business people. Business acumen is lacking or non-existant, no one watches costs. I proposed doing a cost benefit analysis for a project, was told it was pointless there is endless money to do anything the project requester wanted if it was reasonable or not.

Always the coy one :P There is a lot of money to be made in the inefficient news flow of unlisted and tiny companies. I'd hate to blast that stuff out on the public internet where anyone can find it through a Google search. I'm willing to divulge in a PM or an email. I have no problems sharing secrets, but some should be held tighter than others. I'll say that digging around for about an hour on OTCMarkets and anyone should be able to figure out some of the searches I do.

Just depends on where you want to fish… I go over OTCMarkets often, I'll check for news, and look for Tier changes. I have a few other tricks I use as well..

Schwab Global sucks, they only allow you to trade a pre-approved list of large caps that they have researched. Fidelity is a great option, I think they're up to 20 foreign markets now. The mechanics, you type in the ticker and click buy. At Fidelity you can enter orders any time but it's probably best to trade during market hours.