Best Value Investing Blogs, Tips and Articles

This article comes from Ryan Maxwell of FirstRate Data. During economic booms, weak companies are often able to flatter their financial performance by manipulating (or managing) their earnings. Strong financial markets allow such companies to repeatedly tap debt and equity funding sources and deploy the funds to create the illusion of current profits instead of… [Read More]

The Covid-19 pandemic has rocked the world in 2020. The key financial markets have suffered substantial losses. Is this the beginning of a 21st century great depression… or a major opportunity to buy great stocks at low valuations? The investing world has been speculating ever since the 2008 credit crisis and the global recession that… [Read More]

I posted this video on Youtube yesterday about the Graham Checklist. I go through the checklist, point by point and describe the criteria Ben Graham laid out in his checklist. If you are a subscriber to Value Stock Guide, you very likely already have a copy of this checklist. If not, feel free to download… [Read More]

For many, the art of value investing may seem to be decidedly “kludgy”. Strict value investors refuse to consider the future prospects of the company. Estimates are inherently risky. We do not have a fool proof way of making estimates, and future has a way of not sticking to our expectations. So we dispense with… [Read More]

As a value investor, you have no doubt come across many of the key financial ratios, such as Price/Earnings Ratio or Price/Book Ratio. You may have also got used to evaluating businesses based on their operational metrics or profitability ratios. These are all very important, and as long as you review these regularly and understand… [Read More]

When the markets are overvalued, such as now, we value investors tend to stay on the sidelines. First, there are not many good deals to be found, and second, the cash we have is worth more when the market crashes. Still, the stock market is not the only place to invest money. Perhaps there are… [Read More]

Ben Graham gave us many of the core concepts of value investing. He also gave us a few shortcuts. Graham Number is one of the shortcuts an investor can take to estimate the intrinsic value of a stock. What is the Graham Number? Most value investors know to look at the two primary ratios for… [Read More]

Let’s imagine an asset that you are considering acquiring. You know that there is a high likelihood that the price of the asset will be lower in the near future, than it is today. Will you go ahead and invest today, or would you wait until the price is lower? Or perhaps the asset is expensive but… [Read More]

We often hear – buy good companies and you will do well over time. If only it were this simple. As an investor, your goal is to buy good stocks. Often, good companies have good stocks and they make you good profits. Even more so often, investors find themselves invested in stocks of great companies… [Read More]

Buffett no longer relies on book value as a valuation metric. Among the reasons stated: Book value does not reflect the current or market value of assets – it does not reflect the intrinsic value of the company Intrinsic value is a better metric for valuation Market prices are more relevant To which I say… [Read More]

Return on Equity is one of the primary financial ratios investors use to judge a company’s operations. If I were to pick one metric that matters (OMTM) for investors looking into a company’s operational excellence, return on equity would be the that metric. It appears to be Warren Buffett’s favorite metric.

An entrepreneur can be described as a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so. The latter part of that definition is a major reason why value investors are not good entrepreneurs. We hate risk.

To investors, Enron appeared strong and prosperous. However, what was hiding outside of their financial statements would lead to one of the largest scandals in Wall Street history. Chief Financial Officer, Andrew Fastow, argued a clever twist of the rules prior to being handed a six year prison sentence. By the end of 2001, everyone was left wondering what had just happened.

Although Enron’s manipulation was deemed illegal, many publicly traded companies partake in similar methods without raising concern from regulators. It is an accounting practice commonly known as off-balance-sheet activity.

Let’s get into what off-balance-sheet activity is and how it is used.