Questions tagged [value-investing]

Value investing generally involves buying securities that appear underpriced and selling securities that appear overpriced.

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3
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4answers
321 views

Why do value investors ignore technical analysis?

I have read a few articles about value investing, and a few biographies of value investors. I am under the impression that value investing does not involve chart reading or technical analysis at all. ...
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3answers
279 views

Learn fundamental Analysis (example)

I'm completely new to stocks. I've already read The Intelligent Investor, One Up On Wall Street and another book for beginners about long term investing. My problem is that I don't know at all how to ...
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0answers
38 views

Exercise on how to value a bond

I'm a computer science student and in the current semester I wanted to participate at a "Project and Enterprise" financing course. The problem is that due to corona, normal lectures are not possible ...
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2answers
71 views

Market Analysis Charts Using Gold as Currency (Y-Axis)? [closed]

I wish to analyze the historical value of individual assets in a wide range of asset groups; Commodities, Stocks, Bonds, Currencies, etc; in milligrams of Gold; using time as the x-axis and gold as ...
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3answers
215 views

How do billionaires keep their stakes in other companies safe during economic crises?

The world economy -- and therefore also the world of finance -- is currently facing yet another existential crisis. What solution do the best and most risk averse investors, like Warren Buffet, use to ...
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2answers
275 views

Is 'dont catch the falling knife' a good strategy for an everyday investor?

So until recently my understanding was that 'crab investing' is the best strategy for an 'everyday investor': Crab investing: Every pay check, buy (and hold) a diverse range (index fund) of stock, ...
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2answers
71 views

Market Cap Calculation Based on Yahoo Financials

I am trying to calculate market cap based on outstanding shares and stock price for AAPL. I go to Yahoo Finance, https://finance.yahoo.com/quote/AAPL/balance-sheet?p=AAPL Quarterly view for 2019 Q4 ...
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2answers
305 views

Why is it a bad idea to combine both active and passive investing strategies?

Common advice given is that if you decide to become an active or passive investor, you should stick with the choice you've made. That you're less likely to be successful if you try to pursue both ...
3
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3answers
72 views

How to supply and demand analysis for crude oil [closed]

Hi I'm trying to forecast the price of crude oil (WTI) and based on that either go long or short crude oil. When investing/trading stocks I normally do dcf analysises or so on the company to get the ...
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3answers
121 views

How do you make money from Growth ETF funds?

I'm doing some research as I prepare myself to start my long-term(25-30 years) investment journey. I'm taking notes covering basic terms, fund info (holdings, volatility etc) and preparing my ...
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1answer
332 views

Is it possible to short a stock and then buy the company for very low price?

I started investing in some years ago and I have a special skill in picking stocks which are fraudulent and will quickly drop a lot. Some examples were: CLDR which dropped from $10 to $5 overnight ...
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0answers
15 views

LN PME - benchmarking private equity performance

I have a question regarding the method for comaparing PE fund performance to that of public equity markets. Why do we need the NAV? I would simply think that we could use any capital calls to buy the ...
0
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1answer
179 views

Metal companies trading below book value

Is there a reason why metal companies, like Tata Steel and SAIL trade at such low prices compared to their book value? Even the industry P/B seems to be low. What am I missing?
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2answers
733 views

When and where did Warren Buffett say: “Rule No.1: Never lose money. Rule No.2: Never forget rule No.1”?

Every woo-woo financial guru claims that Warren Buffett lives by this and said this at some point in time. When and where did this statement originally occur? What is the primary source?
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1answer
452 views

A question about CAPEX when Calculating Free Cash Flow (FCF)

When performing the following to determine free cash flow: Free Cash Flow = Operating Cash Flow - Capital Expenditures Do I include only Capital Expenditures (13,732 in the example below), or do I ...
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0answers
98 views

Why Joel Greenblatt's Magic Formula ignores taxes and interest payments?

The "Magic Formula" works by choosing companies scored the best in two criteria: How good business is, how efficiently it can reinvest its own money and grow Return on Capital = EBIT / (Net Working ...
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0answers
31 views

Leveraged buyout (LBO) valuation: multiples

When you build a LBO analysis, you have entry multiple (maybe work back from your required IRR) and exit multiple that are usually based on EBITDA. Do you always choose EBITDA? What about other ...
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1answer
117 views

Question about a quote from The Intelligent Investor

I am having a bit of trouble understanding the following quote: Companies that are inherently speculative because of widely varying earnings tend to sell both at a relatively high price and at a ...
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2answers
128 views

Why should general market conditions dictate how I invest in reasonable individual stocks?

On page 206 of the revised edition of Graham's, "The Intelligent Investor", Graham states: It is far from certain that the typical investor should regularly hold off buying until low market levels ...
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1answer
120 views

Am I thinking about whole company returns correct?

I'm trying to answer the questions: "if I owned all of a company, how much would I make?" and "once I know that, how much should I pay?" Let's say I owned Wal-mart outright (took it private and owned ...
4
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1answer
287 views

Need help understanding a quote from The Intelligent Investor

I am reading The Intelligent Investor, and the follow quote doesn't make total sense to me: An industrial company’s finances are not conservative unless the common stock (at book value) represents at ...
3
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1answer
149 views

Depreciation question from Benjamin Graham book

I am reading The Interpretation of Financial Statements by Benjamin Graham. Ch. VI, Depreciation and Depletion contains the following wording: When property is retired its gross value is deducted ...
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2answers
846 views

Take out a loan to invest

So, maybe a crazy idea. Let's say I take out a personal loan at my credit union with "0" to 4.5% interest with a payment I can afford from my personal income. Repayment over 5 years. I take the ...
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2answers
176 views

I have some money left

I got a scholarship, which is more than what I need for the period of my studies. So, approximately 300 to 400 euro is in excess, what can I do with this money? I am 20.
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0answers
115 views

Comparing values of 5s and 7% notes

I am a beginner in investment. I was reading Security Analysis (Sixth Edition) by Benjamin Graham, and on page 63 the last paragraph is written that: A third kind of analytical conclusion may be ...
2
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1answer
380 views

Discrepancy in table 2.1 Pg 49 in the book The Intelligent Investor by Benjamin Graham

The above pic shows inflation at 5 years intervals. I am finding a bit hard to understand this table. For e.g. calculation of percentage rise in wholesale prices in 1960 seems to be wrong. Actual rise ...
2
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1answer
114 views

Intelligent Investor Example from Chapter 1

As per Intelligent Investor Chapter 1 example In 1965 the investor could obtain about 4½% on high-grade taxable bonds and 3¼% on good tax-free bonds. The dividend return on leading common stocks (...
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5answers
1k views

How did Theranos have any value at all?

Theranos, an infamous case of a tech startup gone bad, was valued at over 9 billion dollars for audacious claims of revolutionizing the blood-testing industry. The trouble is, it had done so with ...
2
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1answer
108 views

Why did ESL need to pay $5.2Billion for Sears Holdings?

Related to this question. Yes, I know that the operations of a big company isn't directly related to personal finance, but understanding this seems an important part of investing, for instance SHLD ...
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1answer
134 views

Shares issued vs Shares outstanding and where to find in morningstar.co.uk

When talking about stocks. I am a bit confused with the term "Shares issued" and "Shares outstanding". Can someone please clarify me what is the difference? Also I want to know where to find the ...
3
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1answer
57 views

What are the ways to price a holding company?

I would like to know how people value holding companies. I guess the most famous one is Berkshire ($BRK.A - $BRK.B). And others exist. These holdings usually have a lot of exposure to realestate, PE ...
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0answers
85 views

P/E & P/B of stocks purchased by Warren Buffett

I am looking for data about Warren Buffett's famous purchases. For e.g. when Warren Buffett purchased stock of Coke, American Express, Moody's & other of his long term purchases what was the P/...
37
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7answers
11k views

Why does Warren Buffet consider real estate as productive asset?

In Berkshire Hathaway 2011 letter, Buffet said that: My own preference – and you knew this was coming – is our third category: investment in productive assets, whether businesses, farms, or real ...
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1answer
48 views

US company Warrants issued in Europe

Can one bank issue another companies warrants ? I have been searching for warrants on US companies and turns out that a lot of these warrants are issued in Euro instead and by different banks rather ...
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2answers
440 views

Warren Buffet's calculation of the value of the company - very low discounting rate

I was read the book "The Buffett Way". The book claims that Warren Buffett uses a simple calculation to calculate the intrinsic value of a company. The regular way is to estimate future earnings &...
0
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2answers
153 views

Allocation basics not so basic [closed]

I've been trying to put together a long-term (15-20 years) ETF portfolio (stocks only, no bonds). As I read about the investment and allocation basics, I realized it's far from simple. I would like my ...
2
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7answers
574 views

Why would any owner sell their company to Warren Buffet / Berkshire Hathaway?

Suppose that I'm either an owner or part owner (through shares) of Example Corporation. One day I get a phone call from Warren Buffett. He says that Berkshire Hathaway is interested in buying ...
37
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2answers
7k views

What does “gold reserves” on a gold mining company's balance sheet mean?

From a Reuters article: On Wednesday, [Newmont Mining Corp] reported gold reserves of 68.5 million ounces for 2017, unchanged from 2016, as it replaced reserves through exploration, projects, ...
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2answers
105 views

Value stocks appreciating

A value stock bought when undervalued should presumably increase in value and eventually is no longer a value stock. How long should this take and should it then be sold?
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6answers
41k views

Which Benjamin Graham book should I read first: Security Analysis or Intelligent Investor?

I recently graduated from engineering and I want to know more about investing. I'm particularly interested in Benjamin Graham's ideas. I want to read all of his books, but I couldn't decide which one ...
1
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3answers
107 views

Value vs Growth: are start-ups value companies or growth companies?

I'm a bit confused about the definitions of value and growth. I heard that companies that have high P/E ratios are growth companies. Are start-ups (think Silicon Valley start-ups, most of which fail ...
0
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1answer
164 views

What is the math behind Buffett's 2015 Per-Share Investments figure for Berkshire Hathaway?

Multiplying the $159,794 figure by 1.6m shares gets me $262,541,542,000.00. Here's what I did to try and reproduce that figure (amounts in millions): My attempt Which is about 10 billion dollars off....
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5answers
7k views

Why does Warren Buffett say his fund performance, relatively, is likely to be better in a bear market than in a bull market?

Currently, I am reading his annual letter. In his letter, he always says that his fund performance is likely to be better in a bear market than in a bull market, but I don't know why. Could someone ...
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3answers
298 views

Comparing the present value of total payment today and partial payments over 3 months

I'm trying to buy something. I can either pay $2495 in a lump sum payment, or $997 over 3 x monthly installments. Let's say I can invest in the stock market and get an 8% return on my money. What's ...
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1answer
545 views

Should I subtract these costs to calculate the “Net Present Value”? [closed]

So now I know that in order to workout the " Net Present Value " I have to find the " Present Value " of each year.. And for that I need to find the revenue of each year .. However, when there are ...
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1answer
114 views

Where to start with finding good companies to invest?

I know its a general question but where do you start with value investing and finding undervalued companies? There must be a quick way to find a list of undervalued good companies? Thanks
3
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3answers
924 views

Do Fundamentals Matter Anymore in Stock Markets? [closed]

As a relatively new student to the market, and as someone who would inherently define himself as a value investor, I can't help but feel that current market conditions beg the question: do ...
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1answer
95 views

Why do some companies report how well their EBITDA performed even if their overall net profit did equally well?

I recall reading somewhere that Warren Buffet once mentioned that he avoided companies that reported EBITDA growth, and considered it as a "useless metric". Ok fair enough. I guess EBITDA could ...
8
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1answer
415 views

Analyze a security using Benjamin Graham's Defensive Investor Criteria

I would like some help evaluating a security using Graham's Defensive Investing Criteria (Chapter 14 of the Intelligent Investor). As an example security, let's look at NYSE:MEI and each of the ...
1
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3answers
227 views

The Intelligent Investor: Northern Pacific Railway example

I am reading the revised edition of Ben Graham's THE INTELLIGENT INVESTOR (First Collins Business Essentials Edition, 2006) with commentaries by Jason Zweig. In chapter 7, "Portfolio Policy for the ...