I have been doing research on another company over the weekend and to my surprise I have found it to be undervalued by at least 30%, which is my required minimum margin of safety, and a hurdle that has been hard to clear this year.
The company is a micro cap with daily volume of around 2,000 shares being traded, it is profitable, has decent margins, and looks to have at least minor sustainable competitive advantages up to this point in my research. The company appears to be very promising thus far and I have been continuing my research by reading every annual report since 1999 and looking into its competitors. I hope to have an update as soon as possible and until then will be posting links.
How I learned A Language In 22 Hours. I have always wanted to learn a language and after reading this article I decided to try out Memrise. After only an hour or two, I can already recognize more than 100 Chinese words, committed them to my long term memory, and have been learning how to say them. I am enjoying this site immensely so far and would highly recommend the site to anyone looking to learn a language.
After yesterdays detour and the help from your comments in the comments section, I will now get back to posting links. A big thanks to all readers who helped out yesterday clarifying the situation, I really appreciate it.
The Red Corner Blog. For those of you who might not know, Red has been very helpful to me in the past on Whopper Investments blog, and more recently on this site as well. I recently found that he has his own blog where he analyzes and values companies. His work is exceptional and I highly recommend that everyone visit his site, especially if you need help with the more technical aspect of evaluating companies, which is an area where I currently struggle. He also answers a lot of questions from readers as well so make sure to read the comments on his writings as well.
Student of Value has come up with another great analysis piece, this time on National Western Life, as always highly recommended.
Stretching Yourself To Learn New Things is another great write up from Farnam Street.
Notes From Value Investor Mohnish Pabrai is from Perfect Research that contains Mr. Pabrai’s thoughts on a wide range of topics in investing.
I wanted to let everyone know who might be clicking on the CSinvesting links I have, that I got an email from John the other day after noticing that his site is down currently. He said that he is currently in the process of moving his blog to a self hosted site, while also recovering from surgery. Get well John, no need to rush back after major surgery.
I am still struggling to find another company to research and hope to find one soon. I suspect that I am not alone in finding it hard to find companies to research since the market has been going up quite a bit?
Chasing Warren Buffett’s Alpha is an article from the CFA Institute about Warren Buffett’s performance since 1976 to 2011 where they try to determine what has made Buffett’s performance over that time period so special. This article also contains the link to the original paper about the conclusions that the writers came to.
Yuri Gagarin ($4PX:BU) is another fantastic valuation and analysis article from Student of Value. Pay close attention to how he thinks about the company. As always the way he thinks about things and presents them is amazing to me.
Why Letting Yourself Make Mistakes Means Making Fewer of Them is an article from Psychology Today with lessons that I wish I would have learned in my teenage years instead of only recently. I used to be so afraid of failure that I never tried new things. Only over the past 4 years or so have I started to try a lot of new things. Trying new things, and making mistakes, has not only made me a vastly better investor, I think it has also made me a much better person as I have been able to improve in every aspect of my life.
Free Session on Global Value Investing click on the interview transcript link for the free download of the interview.
Next up will be my valuations and quick thoughts on the rest of my portfolio from before my transition to actual investing and what I am doing now.
I have found two companies that I am going to start researching after I finish up reading Martin Whitman’s Third Avenue Funds third quarter 2012 shareholder letter posted on http://blog.ttcapitalonline.com. I got this from following @ttcapitalmgmt on Twitter, who is someone else I would highly recommend following as I think his analysis of companies is fantastic.
Seeing A Show (Or A 10K) From a Different Perspective is from http://www.ragnarisapirate.blogspot.com which I found from his Twitter account @ragnarisapirate about how your mind can change how you remember things that happened in the past, and how it is good to reread 10K’s and your previous company analysis every once and a while.
How I Learnt The Power of Checklists is an article from the Financial Times which illustrates the power of checklists obviously. You might have to sign up for a free membership to gain access to this article. I am still working on fleshing out and writing out my checklist and hope to share it with you sometime soon.
Discounted Cash Flow Valuation of Wal-Mart 1968-2012 is another great write up from http://blog.dimitargenchev.com which is an excellent analysis and valuation of Wal-Mart from 1968 to the present.
The Paradox of Goal Setting is an article from Psych Central about why people do not realize their goals and how to combat those mistakes.
22 Things You Could Do, To Become a Better Investor is another fantastic article from http://simple-value-investing.com where he gives you tips that he believes will help everyone become a better investor.
I am going to keep the links coming over the next several days and I will update you if either of the two companies have turned out to be companies that I am going to do in-depth analysis and research on.
Before I get back into research and finishing up my checklist I wanted to give you some links that I thought held some kind of insight or knowledge that we all could learn from.
Warren Buffett on his Investment in See’s. See’s is one of his favorite all time investments and I think his reasons for investing should be studied by every investor. Article is from Valuewalk, @Valuewalk on Twitter.
The Secret’s of See’s Candies is an extensive profile of the business, why Buffett bought it, why it is such a good business, its new expansion plans, and how Buffett and Munger almost blew the investment.
Visiting Warren Buffett are notes from someone who visited Berkshire Hathaway on a trip from Columbia Business School in 2006. These notes are from an interview and speech that was given while on the trip where Buffett gives some very valuable lessons. The most fascinating thing to me was that Buffett was the following quotes from the article: Emphasis mine.
Question 12: What would you pay for a solid company that is growing earnings at 8-10%/year?
Not many companies will do that. You see a lot of garbage about EBITDA. Depreciation is the worst kind of expense in that it is prepaid. He looks at EBIT/EV. He’ll generally pay 7x for a decent business. For insurance companies, he looks at float and the cost of float.
Looks like that could be a very good starting point for valuations.
Masters of Compounding: Walmart ($WMT) 1968-2012 is an exceptional article from Student of Value on the history of Walmart and what has made it such a fantastic company over time. I would also recommend following @dgenchev on Twitter if you would like to see his future write ups as they have so far all been fantastic.
How an Average Business Can be a Great Investment by Oddball Stocks has some interesting thoughts about average businesses and their investment potential. There is some great back and forth in the comments section as well. I would also recommend reading his two write ups about Hanover Foods that he links to in the article as the analysis he presents is very detailed.
4 Mistakes When Valuing Companies With Large Cash Holdings, and How to Avoid Them is another fantastic write-up by Simple Value Investing. I would also highly recommend following him on Twitter @SimpleValue as all of his write ups thus far have also been fantastic. His write ups on Ibersol were very detailed and he laid out a very good investment case for them. Part 1 and Part 2.
I hope you enjoy the links over the next few days as I am now off to finish up my own investment checklist and to research some more companies.
I found this fantastic blog as it was recommended on Whopper Investment’s site. The way this person thinks is absolutely amazing, all three of the posts so far have been fantastic, and I highly recommend reading them all. This is a blog I will definitely be following closely.
KIRK article published
My article on KIRK got published on Seeking Alpha, here is the link for those who would like to follow the discussion in the comments section.