There’s a lot of discussion on which is the better investing strategy, bottom-up investing or top-down investing. The definitive guide can be found in Chapter 7 of Seth Klarman’s book, Margin of Safety. Here’s an excerpt from that book: There is no margin of safety in top-down investing. Topdown investors are … Read More
Mohnish Pabrai – How To Calculate Intrinsic Value
I’ve just been re-reading one of my favorite investing books of all time, The Dhando Investor, written by Mohnish Pabrai. In Chapter 7, Dhandho 102: Invest in Simple Businesses, Pabrai provides a very simple example of how to calculate intrinsic value using the real life example of Bed Bath & Beyond Inc … Read More
The Acquirer’s Multiple® Canada All TSX Stock Screen Backtest
Chart 1. Returns from January 2, 1999 to June 16, 2017 (Log.) We backtested the returns to a theoretical portfolio of stocks selected by The Acquirer’s Multiple® from the Canada All TSX stock screen. The backtest assumed the screen bought and held for a year 30 stocks selected from the All TSX universe … Read More
Howard Marks – Anticipate – And Avoid – Pitfalls That Others Will Rue After The Fact
With the stock market reaching all time highs, maybe it’s a good time to revisit Howard Marks’ memo of 2005 in which he discusses market trends being taken to excess – and the painful consequences that become clear in hindsight. Here’s an except from that memo: “The farther backward you … Read More
So Value Investing Is Not Dead According To Goldmans
I had to smile when I read this article on Bloomberg titled, Goldman Sachs Mulls the Death of Value Investing. The article states: There isn’t much value in value investing these days. The value-factor strategy of buying stocks with the lowest valuations and selling those with the highest, pioneered by Eugene … Read More
Bill Nygren – How To Apply A Private-Equity Approach To Public-Equity Investing
Great interview with Bill Nygren and Win Murray from Oakmark Capital in last month’s Value Investor Insight Newsletter. On the subject of passive vs active investing Nygren says, “I think it’s ironic that an increase in the number of dollars invested without thought as to where value is and isn’t would make … Read More
A Very Simple Formula For Figuring Out How Many Stocks To Hold
Here at the Acquirer’s Multiple we believe your equally weighted portfolio should consist of 20-30 stocks generated from our Deep Value Stock Screens. In general terms, holding more stocks leads to greater diversification, and lower volatility, but is harder to manage and requires more purchases. Fewer stocks reduces the number … Read More
Athanassakos Rebukes Another Bogus Study That ‘Proves’ Value Investing Doesn’t Work
George Athaassakos recently wrote a great article that illustrates why most studies that ‘prove’ value investing doesn’t work, are not entirely accurate. Here’s an excerpt from that article: A new study from Arizona State University, titled Do Stocks Outperform Treasury Bills?, is turning heads and gives ammunition to those who … Read More
Alio Gold Jumps 19% Last 5 Days – TAM Deep Value Stock Screener
One of the cheapest stocks in our All Investable Deep Value Stock Screener is Alio Gold Inc (NYSEMKT:ALO). Alio Gold Inc (Alio), formerly Timmins Gold Corp, is a Canada-based gold producer engaged in the operation, development, exploration and acquisition of resource properties in Mexico through its subsidiaries, Timmins Goldcorp Mexico, S.A. de … Read More
The Investment Strategy Pioneered By Warren Buffett Is In Crisis (CNBC)
CNBC reports that Warren Buffett’s value investing long/short strategy generated a 15 percent cumulative loss in the past decade and negative returns in 6 out of the last 10 years, according to Goldman Sachs. Before that, the value strategy had a successful run of more than 70 years. Here’s an … Read More
Jim Rogers Warns The Biggest Crash In Our Lifetime Is Coming
According to Business Insider, Jim Rogers says the biggest crash in out lifetime is on its way. Rogers said: It’s going to be the biggest in my lifetime and I’m older than you. No, it’s going to be serious stuff. We’ve had financial problems in America — let’s use America — … Read More
If You Own A Great Stock, But The Price Isn’t Going Up, Hang On!
Great article from Ian Cassel at MicroCapClub who discusses the age old problem of owning a stock that just won’t go up even though you know it’s a great business. Here’s an excerpt from that article: If you knew a stock you owned today wasn’t going to go up for … Read More
Aswath Damodaran – What’s Next? A Sharp Surge In Stock Prices Or A Sharp Correction?
Great article and video by Aswath Damodaran called A Tale of Two Markets: Politics and Investing! Damodaran says, “Seldom has there been such a divide between those who believe that we are on the verge of a massive correction and those who equally vehemently feel that this is the cusp of a … Read More
Joel Greenblatt Says Todays Investors Can Win By Zigging When The Market’s Zagging
In a recent article at Bloomberg, Joel Greenblatt said, “Passive investing suits some, but isn’t discerning”, and “Investors can win by zigging when markets zag”. Here’s an excerpt from that article: The shift to passive strategies that hug stock market indexes is likely to continue, but that’s not all bad for … Read More
Latest Interview: Mohnish Pabrai Says Look For Businesses With Very High Uncertainty
Here’s a recent interview with Mohnish Pabrai on the Steve Pomeranz Hour in which he discusses his value investing strategy and how he finds great opportunities. Here’s an excerpt from that interview: Mohnish Pabrai: The key trait of an investment that is likely to do well exhibits low risk coupled … Read More
What Could Investors Do With 1000 Years Of Data? – Abnormal Returns
Great article by Tadas Viskanta at Abnormal Returns, where he asked an esteemed group of independent finance bloggers; If we had a 1,000 years of market data what kinds of things would get validated? The group included Tobias Carlisle from The Acquirer’s Multiple who said: We get the same answers we … Read More
Cash-Rich Companies Are King In The Stock Market Right Now
One of the things we like to focus on when selecting stocks for our deep value stock screens here at The Acquirer’s Multiple are companies with strong balance sheets. In a recent article Business Insider reports that cash-rich companies are king in the stock market right now. The article states that shares … Read More
George Athanassakos – Let’s Stop Bashing Active Management
Great article by George Athanassakos, a Professor of Finance and the Ben Graham Chair in Value Investing at Ivey Business School, in which he answers two difficult questions regarding active management: Why is it almost impossible for reported numbers to show that active managers beat benchmarks? But beyond that, what may make it … Read More
Steven Romick – Avoiding The Worst Performing Stocks Can Lead To Outperformance – Here’s How
Steven Romick at FPA has just put out a great paper called, Two Decades of Winning by Not Losing. It’s a great illustration of how you can outperform in the stock market by avoiding the worst performing stocks. Here’s an excerpt from that paper: Thanks to the accelerated increase of passive investing … Read More
Rob Arnott – Links Between U.S. Stock Returns And U.S. Presidents Are Bogus
A new report released by Rob Arnott and the team at Research Affiliates shows that investors should exercise extreme caution when interpreting historical investment data as it relates to politics. Here’s an except from that report: Our results underscore the importance of exercising caution when interpreting historical investment data, including … Read More