《Value Investing from graham to buffett and beyond》

Date:08/2008
Talker: ZivYim

I.What is Value investing?
-Mr. Market
-Base economic value
-Use less price to buy higher asset
1.process:
1.choice
2.calculate
3.safety of magin
4.The no. to buy
5.When to sell
II.What is not value investing?(for the classic one)
-Technology
-Marco
-Micro
1.not safety of margin
III.Searching for value:
-find the loser
-Anomaly of value
1.risk vs return
2.Bias
1.investor
1.winner/loser
2.institution
1.industry
2.scale
3.Fund manager
4.Psychology
1.Remember the short-term
2.Hate the risk and lose.
Other chase
1.small company
2.loser company
3.temporary change in institution /company
IV.Three source of value
-Criticism of DCF
-Value of asset -Value of no competitive advantage
-Value of Earning power -Value of recent competitive advantage
1.EPV=Adjusted earning x 1/R (R is the current cost of capital)
2.replacement cost
3.growth does not mean value adding
4.it reflect the franchise if EPV> replacement cost
-Value of Growth -Value of growth within franchise in the future
V.From bk value to Reproduction costs
1.Values in liquidation
2.Cost in entering a industry
3.hidden value

VI.Constructing the portfolio: Risk, Diversification, and Default strategies
-the confidence zone
-safety of margin
-confirmation:
1.insider buyback
2.famous investor hold it
3.restrict money on each idea
-Do not short sell
-what will we do if idea < money?
1.Cash
2.Mr. market
VII.Different mode of value investing
-Classic -Diversified portfolio
1.Tangible asset
2.Roughly research
3.Not good-looking
4.The hurt duck
5.In the shadow
-Mixed -Replacement value
1.enough research
2.Private market value
3.Catalyst
4.Relative value
5.Polite looking
6.mediocre result
-Contemporary -concentrated portfolio
1.deep research
2.value of franchise
3.attractive but not enticement
4.Own the company
5.The hurt eagle
6.Hiding in common place
VIII.Famous investor
-Warren Buffett: Investing is allocating capital -Contemporay
1.investment candidate:
1.Can be understood
2.Have good longtime outlook
3.Managed by honest and skillful people
4.Can be bought in a attractive price
2.Keep a margin of safety
3.Roughly right is better than precisely wrong
4.Way to find risk:
1.The reliable on long time economic characteristic of company
2.The reliable on manager,including their ability on finding out potential of company and usage on cash flow.
3.The reliable on transferring the earning to shareholder instead of company itself.
4.The buying price.
5.The degree of future taxation, inflation, as it determine the erosion of future buying power.
5.Discover of institution imperative
-Mario Gabeli: Discovering and unlocked the private market value
1.private = the value an informal industrialist would pay to purchase assets with similar characteristics.
1.Intrinsic value + controlling cost
2.Hidden value on asset which is valuable on specific industry.
3.Recognize some catalyst (event,people, concept)
1.specific (e.g. some critical man leave)
2.environment(e.g. Government)
4.EBITDA- capex for franchise
-Glenn Greenberg: Investigate, concentrate, and – watch that basket -Contemporay
1.concentrate
2.buy good company
1.two-oligopoly
2.low price
3.pricing:
1.FCF
2.Break it down
3.Scenario test
4.Common sense
5.View Index as a stock to test the distortion degree
4.Up to date information
-Robert H. Heilbrunn: Investing in investors -Classic
1.Confidence zone
-Seth Klarman: Distressed Sellers, Absent Buyers
1.Safety of margin
1.Don't loss money
2.Don't forget the first one
2.Klarman rule:
1.Assess risk
2.Distressed Sellers
1.drop out from index
2.Replace asset with stock
3.bankruptcy
4.Distressed real estate
3.Absent Buyers
1.experience with develop buyers
2.out of the public interested
3.Down top analysis
-Michael Price: Discipline, Patience, Focus and Power -Mixed
1.lower risk higher return
2.Portfolio that meet target( e.g. 2/3 on cheap stock , 1/3 on bankruptcy)
3.Pricing
1.Use up to date acquisition information
2.See the stock in the view of an acquirer
4.Find the cheap stock
1.Break down
2.discount 40% from intrinsic value
5.Bankruptcy:
1.before bankruptcy
2.being bankruptcy
3.Recombination
4.New company form
6.Characteristic:
1.rule : don't far from standard
2.Patience: don't chase the stock immediate after calculated
3.Focus: don't distract with marco forecast
4.Do your homework
5.If opportunity come , catch it quickly
-Walter and Edwin Schloss: Keep it simple, and cheap
1.focus on cheap stock
2.Portfolio flexible
-Paul D. Sonkin: Small is beautiful, Especially when It's Ugly -Class
1.Buy at the bottom:
1.The drop down after IPO
2.Opportunity of small company
1.Lesser analyst
2.Easier understand
3.Arbitrage
1.微型資產
2.清算
3.讓產易股和重組