HBSValueInvesting

http://www.hbs.edu/centennial/im/inquiry/index.html
http://www.hbs.edu/centennial/im/inquiry/sections/2/a/page43.html
http://www.bengrahaminvesting.ca/Resources/videos.htm

This one speech has explained the final continueing chapter I suspected all along and knew from all my Buffet , Munger and Fischer etc.. etc.. reading he confirmed what I knew and do. He makes no bones at challenging the classes thinking. It requires a massive amount of simple thinking. Not on high level. Knowledge is not the only key to reduce risks but also maximizing the investments hidden profit potential when no one else can see it. It is the insight that unlocks the huge profits. A value investor can tell anyone what he is doing but still escape most people. It is like watching a painter paint. But that doesn’t mean you can paint without dedicating the work to master the art of painting. Same with value investment. Ridiculous returns for great research.

Seth Klarman

Hand Cutting Up Credit Card With Scissors
How to Dispose of Old Credit Cards - (http://www.ehow.com/)
Lady Blue Shangai – The poem: It holds the love
Socrates said. " all I know is that I know nothing "
Find the SuperMoats" IMHO -- this reminds me of the Buffett statement about guaranteeing 50% returns with a smaller portfolio. He is a huge believer in taking concentrated, high conviction positions
http://www.aspeninstitute.org/
To be a qualified analyst. He is an investor with a tremendous work ethic. Value investors see themselves as owners of a business. Therefore, fortunes are up and down with the nature of the business. Demand a margin of safety.

Traits of a Value Investor**
1. Don’t think of yourself as a paper shuffler who constantly buys and sells securities. You think of yourself as a real owner of the business.
2. Only own a small piece of the business, so you demand a huge margin of safety.
3. As an owner, not trading all the time, you think everyone else is different — like Ben Graham’s Mr. Market

On Value Investing**
-Under 5% of all assets are run under value investors, a real minority in the investment world.
-The stock market is created for the other 95% of people, that is where your opportunity and challenge is.
-Biggest challenge: understand whether you are the 5% or the 95%
-It is tempting to do what the other 95% of people do. Emotionally very difficult to be in the 5%, but value investors typically have better returns. The money is really for traders and they tend to amass more assets.
-5% have a spectacular return, but 95% of money probably always resides to somewhere else.
-If you are a value investor, you are probably genetically mutated and comfortable being in the minority. This is unnatural to human beings. You have to be comfortable being by yourself. You have to adopt the idea that you are right because your reason and evidence, not because others agree with you.
Analyst&Researcher&Journalist
-You will probably spend most of your time being an academic researcher rather than a professional. You are a researcher or journalist, with insatiable curiosity. You are trying to figure out how everything works.
-The more you know, the better you are as an investor.
-Politics, science, technology, literature, poetry, everything can affect businesses and help you.
-Occasionally you can find insights that will give you tremendous insights that other people don’t have.
-Then you find if the business is cheap. Is the management good? What else? Why is the opportunity there?
-Fall of 1998: Lu’s search process is very general. Got hooked on value line, loved to read the whole thing from beginning to end. The best kind of education, you should do this if you want encyclopedic knowledge of companies. Go through it page after page, it is enormously helpful.
-First thing Lu checks is new low list. New low P/Es, P/Bs, etc. (From "Standard&Poor 200")
-Does not care where something traded before.
-First looks at valuation. If the valuation doesn’t fit, doesn’t go beyond it. (Q: What is "Valuation"? Why is it helpful? How to valuate it?)
-If you see a low P/B ratio, ask – What is in the book? How much is the book?
Price-book ratio - Compares a stock's market value to the value of total assets less total liabilities (book value). Determined by dividing current stock price by common stockholder equity per share (book value), adjusted for stock splits. Also called Market-to-Book.
Intangible assets are defined as identifiable non-monetary assets that cannot be seen, touched or physically measured, which are created through time and/or effort and that are identifiable as a separate asset. Price to Book ratio or P/B. This measurement looks at the value the market places on the book value of the company. Like the P/E, the lower the P/B, the better the value. BV is considered to be the accounting value of each share. Market value is what the investment community's expectations are and book value is based on costs and retained earnings. One situation where BV can be useful is if the market value is trading below the book value, this rarely happens, but if it does it could mean that the company is undervalued and might be an attractive buy. (http://www.investopedia.com/university/ratios/bookvaluepershare.asp)
Formula:





-Encyclopedic knowledge is helpful when looking across different industries.
-Look at pre-tax and pre-interest earnings. Look from an un-leveraged basis. Figure out how much capital is deployed in the business. Look at ROIC.
An exchange-traded fund (ETF), also known as an exchange-traded product (ETP), is an investment fund traded on stock exchanges, much like stocks.
StarMine’s analyst awards: Judy Hong Goldman Sachs - focus on the process and discipline
-If you are not a good analyst, you will never be a good investor.

Be a Learning Machine
-When an investment opportunity comes, you have to seize it. Devote day and night so you can act quickly. Do everything complete but do it fast. You have to train yourself to jump on opportunity.
-When opportunity presents itself you can smell it. The only way to do that is by training yourself and reading page after page of financial report.
-Uses S&P manuals for viewing foreign stocks.
-As an owner, don’t think about per share information.
-Use your brain, when looking at stock manuals, each page should really only take 5 minutes. Don’t use calculators. Use mental math.