Saturday 31 January 2015

Stock price volatility vs fundamentals

Listening to Value Investing Podcast and heard an interview with Lauren Templeton & Scott Phillips about stock proce volatility vs fundamentals.

Here is an except from a Financial Times article by Phillips I found that summarizes the point:


"According to long-term research conducted by Robert Shiller, measuring the ratio of stock price volatility relative to fundamentals, stock prices are 14 timesmore volatile than the underlying fundamentals (measured by long-term dividends). For a value investor who can stomach this volatility, this means 14 times the opportunities to make a wise long-term purchase."

Source: 
http://www.ftpress.com/articles/article.aspx?p=1626977




Wednesday 28 January 2015

Top investor outperformance chart

Top investor outperformance chart

Copied the chart below from csinvesting.org

Not sure if correct but shows a very interesting picture.

Investors include:
Jim Rogers, Charlie Munger, Peter Lynch, David Einhorn, John Templeton, Walter Schloss, George Soros, Joel Greenblatt, Benjamin Graham, Warren Buffett

Tuesday 27 January 2015

Francis Chou Q&A selected quotes

Macheted Francis Chou's flow from his Gurufocus Q&A: 
"Immense benefit in buying outstanding companies that does not show up in numbers. There are numerous hidden margins of safety in 1) wonderful economics of the business, 2) great management who know how to allocate capital, 3) growing and sustainable free cash flow that are being deployed wisely, 4) you can make a mistake of paying up and still it may not matter that much because the intrinsic value is growing at a reasonable clip" 
"Tobin ratio is the best warning sign of a stock bubble" 
"It’s a margin of safety. If the company has too much debt, you buy the bonds instead"
"With redemptions during times of crisis, it can accentuate fund performance negatively. Having large positions of cash makes it less of a jarring experience to investors who maintain their positions as we don’t have to sell off stock to support redemptions"…"A good strategy is having a large cash balance and a fairy godmother who will fund your redemptions."
"My favorite investors are those investors who give me their money and then leave me alone."
 

Wednesday 7 January 2015

If by Rudyard Kipling

Currently doing a Deep Value Investing course by John Chew from csinvesting.org


John runs one of my favourite blogs and posted this great poem today:


http://csinvesting.org/2015/01/07/prayer-for-a-deep-value-investor-special-project-montier-reading/

 



If— A poem Phil Fisher kept by his bedside to emphasize independence of spirit and rationality/grace under pressure.

BY RUDYARD KIPLING

If you can keep your head when all about you

    Are losing theirs and blaming it on you,
If you can trust yourself when all men doubt you,
    But make allowance for their doubting too;
If you can wait and not be tired by waiting,
    Or being lied about, don’t deal in lies,
Or being hated, don’t give way to hating,
    And yet don’t look too good, nor talk too wise:
If you can dream—and not make dreams your master;
    If you can think—and not make thoughts your aim;
If you can meet with Triumph and Disaster
    And treat those two impostors just the same;
If you can bear to hear the truth you’ve spoken
    Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to, broken,
    And stoop and build ’em up with worn-out tools:
If you can make one heap of all your winnings
    And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
    And never breathe a word about your loss;
If you can force your heart and nerve and sinew
    To serve your turn long after they are gone,
And so hold on when there is nothing in you
    Except the Will which says to them: ‘Hold on!’
If you can talk with crowds and keep your virtue,
    Or walk with Kings—nor lose the common touch,
If neither foes nor loving friends can hurt you,
    If all men count with you, but none too much;
If you can fill the unforgiving minute
    With sixty seconds’ worth of distance run,
Yours is the Earth and everything that’s in it,
    And—which is more—you’ll be a Man, my son!