How To Value Float, Book Recommendation, And An Update On What I Have Been Doing Including Info About The Potential Investment Firm I Plan To Open

More Float Info and a Book Recommendation

While I was beginning to write my UNAM article I realized that of all the learning I had done about float, I had not learned how to value it.  Below are some more sites that I learned from while I was putting my article together on how to evaluate and value a company’s float.  Some of the information and valuations made it into my UNAM article and a lot of the other stuff made it into my written notes.

• The Brooklyn Investor: So What Is Berkshire Really Worth (Part 1)
• The Brooklyn Investor: So What Is Berkshire Really Worth (Part 2)
• The Brooklyn Investor: So What Is Berkshire Really Worth (Part 3)
• The Brooklyn Investor: So What Is Berkshire Really Worth (Part 4)
• Shookrun.com: Buffett On Insurance.
• Losch Management: Insurance Float.
• Bronstein Report: Estimating Berkshire Hathaway’s Intrinsic Value.

Personally I would put these links on about on par with some of the other information on float I have learned about and posted on the blog from the Fundoo Professor and others, and I hope you learn something from them as well.

I cannot recommend The Davis Dynasty highly enough.  I wish I would have known about this book and read it when I had first started learning about investing and would put in on the same level as The Intelligent Investor, Security Analysis, Margin of Safety, and You Can Be a Stock Market Genius as some of my favorite investment books.

The Davis Dynasty is a book about the Davis family starting with the older Shelby Davis who started with $50,000 in investment funds almost at the age of 40 and turned it into approximately $900 million by the time he died.  His son and grandsons are now continuing his investment legacy and have continued to compound portions of that money still to this day, or at least when the book was published.  The book goes over the general family and investment philosophies and how they made so much money.  The older Shelby Davis made his money mostly with insurance stocks.  The younger Shelby Davis made most of his money with a mixture of financial, insurance, and other stocks.  The grandsons have continued the overall philosophy but have expanded out from the so called boring insurance stocks.

Again, I cannot recommend this book highly enough.

I have started to read The Farmer From Merna about how State Farm Insurance was started to continue gaining knowledge about the insurance industry.  After I finish this up I plan to look for another company to research.

Some Other Things I Have Been Up To

• I am still learning Mandarin and at this point I have learned probably somewhere north of 2000 words or close to that.  Still amazing and I think this will definitely help me at some point down the road.
• Nate (Oddball Stocks) and I were having a conversation a while back about how he read French value investing blogs to help him learn French faster so I decided to try to find some investing blogs that are in Mandarin to help me learn faster.  However, up to this point I have had only minimal luck so I have instead turned my latest article on UNAM into completely Mandarin text and thought I would try this out to see how this works.
• I got some pretty good news from my lawyer friend about opening up the potential investment firm that I mentioned almost a month ago.  So far no concrete updates and I still have some more calls to make and digging to do, but at this point it looks like nothing should prohibit me from opening up a small investment firm.
• I have started some work on an investor’s presentation so that when I do figure out things for sure I am ready to start contacting friends, family, and local wealthy people to see if they would like to invest.
• I have been trying to get myself out there more still in the hopes of getting some kind of job offer, even if it is just someone who wants to pay me for my investment ideas until I open up the investment firm, so I have reapplied to the Value Investors Club.  Last time I applied I had to wait a few weeks to see my rejection letter.  Applied to SumZero and have already gotten an email back from them saying that because I do not have hedge fund/investment firm experience that I cannot join their site.  Started putting my articles on Guru Focus and my Brazil Fast Food article, the first article I have posted to GF, was named an Editor’s Pick.  So far nothing in the way of job offers but people generally say that they like my work a lot and that I do a really good job of laying out my analysis. I have a couple ideas that I may share in the coming weeks about some other ideas I have in this area as well.

Right now I am going to be finishing up The Farmer From Merna, then find another company to research, and keep doing the stuff above.  I will also probably post some more links here shortly.

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What I have been doing, my portfolio, Coaching, Selling, Facebook valuation, Michael Mauboussin, and Winners and Losers

Update on what I have been up to

Recently I have been catching up on some reading; investing books, websites, blogs, etc, which is why I have been posting a lot of sites that I think we could all learn something from.  I hope to finish up the book I have been reading in the next few days, and then it is back to searching for some more companies.

I have been struggling in trying to find the proper balance between learning new things and researching companies.  It seems like I always wish I had more time for both.  If any of you have any tips on how you strike a balance between the two it would be very much appreciated if you could share them.

My Portfolio

Another reason I have not been researching new companies lately is because I have been thinking about my portfolio and what I need to do to free up some cash.  I missed out on Dole because I was fully invested and could not get any cash into my account in time which led me to thus far miss out on the almost 40% uptick in the stock price since I originally wrote about them.  I am glad that there was cash in a couple of accounts that I manage and that I was able to buy it for them, but it made me realize that I need to become more concentrated in my own portfolio, get rid of some of the older companies I bought when I was doing very minimal research, and free up some cash.

In the next few days I will be talking about some of the decisions I have come to.

Some more links for you

Coaching a Surgeron is an article from The New Yorker that asks questions like “If professional athletes have coaches why don’t we all?” It is an incredibly valuable article that any person who wants to become better at any walk of life should read.  It is quite a lengthy read but well worth the lessons that it contains.

How to Think When Selling Stocks is a write-up from Jae Jun over at oldschoolvalue.com.  I wrote a post about a week or so ago about how I was struggling with some of my sell decisions and this is one of the things that actually helped me come to some decisions about my own portfolio.

Ten Reasons Winners Keep Winning, Aside From Skill is an article from the Harvard Business Review blog.  Most of the reasoning is talked about in several other books and websites, but it never hurts to review them and think about them again.

Share Repurchases From All Angles is a write-up from Michael Mauboussin and Legg Mason Capital Management that discusses share repurchases from different perspectives, how management thinks about them, the pros and cons of share buybacks vs dividends, and how they affect the company and shareholders.

This is the Short Call on Facebook, Targeting a $4 Share Price is a mini valuation and analysis of Facebook from SumZero.  The author explains why he thinks Facebook is still overvalued and why he is shorting the stock at this time.