Conversation with Paul Lountzis: Investing & Scuttlebutt Research. Keep checking www.simoleonsense.com to improve and learn.

It is rare to be able to invest precisely at an inflection point; therefore, investors who take a stand against the tide should expect to initially lose money (The Emotionally Intelligent Investor)

Below are links to various lectures. You should do a search on this blog for notes on the various companies that Prof. Greenwald mentions. For example, I posted my class notes on Hudson General, Liz Claiborne, etc.  Try to understand his process. If you don’t, then buy and read the books above. If you work hard, you can skip the $200,000 in tuition at Columbia GBS.

Greenwald Strategic Valuation Analysis: https://www.yousendit.com/download/UW16UWV1K3hlM1RyZHNUQw

Greenwald Liz Claiborne Valuation Analysis: https://www.yousendit.com/download/UW16UWV1K3htMExMYnRVag

Go to Sec Edgar and download the appropriate financial statements and try to value before hearing this lecture. Go to search box on this blog for liz Claiborne valuation to find the notes on this lecture.

Greenwald Valuing Growth and Managing Risk: https://www.yousendit.com/download/UW16UWVqMGNCSWNVV01UQw

Greenwald Investment Process Part 1: https://www.yousendit.com/download/UW16UWVqMGNKV01YRHNUQw

Greenwald Investment Process Part 2: https://www.yousendit.com/download/UW16UWVqMGNtUUhOTzhUQw

Transcript of Greenwald Gabelli Seminar in London: https://www.yousendit.com/download/UW16UWVqMGMyWGRBSXNUQw

Greenwald 2010 Lectures:

1/26/10:https://www.yousendit.com/download/UW16UWVoZ1BoMlc5TE5Vag

1/28/10:https://www.yousendit.com/download/UW16UWVoZ1BrWTlqQThUQw

2/02/10:https://www.yousendit.com/download/UW16UWVoZ1BmVGJMbjhUQw

2/04/10:https://www.yousendit.com/download/UW16UWVoZ1B5UkhyZHNUQw

2/09/10:https://www.yousendit.com/download/UW16UWVoZ1AwMEg1SE1UQw

2/11/10:https://www.yousendit.com/download/UW16UWVqY1M4aU9FQk1UQw

2/16/10:https://www.yousendit.com/download/UW16UWVqY1NuSlMwYjhUQw

2/18/10:https://www.yousendit.com/download/UW16UWVqY1M5eFZqQThUQw

2/25/10:https://www.yousendit.com/download/UW16UWVoZ1BUWUExWjhUQw

3/23/10:https://www.yousendit.com/download/UW16UWVoZ1BtUUVsYzhUQw

3/25/10:https://www.yousendit.com/download/UW16UWVoZ1BkMnZsZThUQw

4/01/10:https://www.yousendit.com/download/UW16UWVoZ1BnYU1VV01UQw

4/13/10: https://www.yousendit.com/download/UW16UWVoZ1BiV3lFQk1UQw

Let me know if you wish for me to post the Greenblatt videos………

Greenblatt Special Situation Value Investing Class Videos

Class Notes: https://www.yousendit.com/download/UW16UWV0Q1JQb0w0WjlVag

#1   2005-02-14 https://www.yousendit.com/download/UW16UWVqaytqY29pR01UQw

#2   2005-10-07 https://www.yousendit.com/download/UW16UWVqaytwaFM1aWNUQw

#3   2005-10-14: https://www.yousendit.com/download/UW16UWVqayszeUxFdzhUQw

#4   2005-11-04: https://www.yousendit.com/download/UW16UWVqays4NVZESjlVag

#5   2006-11-03 https://www.yousendit.com/download/UW16UWVqaytPSHg4SjhUQw

#6   2006-11-08 https://www.yousendit.com/download/UW16UWVqayttNExsZThUQw

..But the proof that these were unsustainable bubbles fostered by the state rather than real growth and prosperity arising from the free market became acutely evident after the turn of the century. Then another round of Greenspan bubble finance and the George W. Bush fiscal profligacy converged in a temporary spree of phony prosperity: the domestic consumption boom and the real estate bubble. Yet now that these have gone resoundingly  bust, the data starkly reveal that the nation’s economic fundamentals have relentlessly deteriorated for more than a decade.

Long-term investment has grown by less than 1 percent annually since 2000 and the nonfarm payroll count has hardly increased at all for 12 years. Likewise, the real incomes of the middle class have fallen back to 1996 levels–even as the American economy has tumbled into a frightful debt to the rest of the world. In short, the American economy did not falter due to a mysterious “contagion” in September 2008. It had been heading for a crash landing for the better part of three decades. — David Stockman in The Great Deformation (2013)

Monetary Mayhem Lectures

All Times are Central Standard Time or 1 hour behind Eastern (New York) Time, but double-check to be sure. Go to www.mises.org

Watch These AERC Lectures Live,

1:30 – 2:30 p.m.  The F.A. Hayek Memorial Lecture sponsored by Toby Baxendale (Austrian Hedge Fund Manager). Nikolay Gertchev, European Commission Brussels “From Monetary Nationalism to Monetary Imperialism: Fractional-Reserve Banking and the Inter-Government Cooperation”

4:30 – 5:30 p.m.  The Murray N. Rothbard Memorial Lecture sponsored by Helio Beltrao Brendan Brown Mitsubishi UFJ Securities “The Global Curse of the Federal Reserve: How Its Monetary Virus Stimulates Destructive Waves of Irrational Exuberance and Depression”

The Ultimate Effects of the Fed’s Policies

How the Federal Reserve’s policies are destroying social trust (must read) here:http://www.zerohedge.com/news/2013-03-11/dylan-grice-explains-how-crackpot-central-bankers-are-destroying-human-society

and…..destroying wealth: “Contrary to popular thinking, loose monetary policy, which leads to a misallocation of resources, weakens the economy’s ability to generate final goods and services, i.e., real wealth.

This means that loose monetary policy not only cannot provide support to the economy, but on the contrary undermines the foundations for economic growth.

The so-called recovery that Bernanke and most commentators are referring to is nothing more than the revival of various unproductive or bubble activities, which in a true free market environment wouldn’t emerge in the first place.” More…http://www.mises.org/daily/6385/Should-Bernanke-Park-the-Helicopter

A traditional economist’s view: Why so gloomy? All is well.

http://scottgrannis.blogspot.com/2013/03/why-is-everyone-so-gloomy.html

http://scottgrannis.blogspot.com/2013/03/the-fed-is-not-printing-money.html (True, but no mention of the massive distortions caused by the Fed’s zero interest rate policies or don’t prices mean anything?)

–

PS: I will tackle the three valuations this weekend. Right now I am too busy researching mining stocks.

Be careful: http://greenbackd.com/2013/03/21/sp-500-operating-eps-estimates-are-too-optimistic-and-the-market-is-expensive/

HAVE A GREAT WEEKEND!

Addition:

Fireside chat with Buffett on payment systems: http://vimeo.com/62209937

Van den Berg’s Investment outlook: http://centman.com/insights/2013/03/arnold-van-den-berg-speaks-at-the-texpers-annual-conference/

Readings

I have been speaking to several friends who run small businesses, and they are universally depressed. They see ever-increasing regulations, taxes, government dis-function and poor prospects. They are battening down the hatches. Perhaps, that is good advice. Note the interview with an entrepreneur #3 below

1. http://www.thereformedbroker.com/2013/03/29/factset-negative-earnings-guidance-at-seven-year-highs/
2. http://www.hussmanfunds.com/wmc/wmc130408.htm
3. http://classicvalueinvestors.com/i/2013/04/fabulous-interview-with-entrepreneur-alan-butler-about-the-economy/
4. http://greenbackd.com/2013/04/05/robert-shiller-interviewed-on-cape-and-the-stock-market/

—

Free Value Newsletter

Get on his email list for Value Investing News.   I think he might even send out Baupost’s last 2012 annual letter if you ask. Ask to be on his list: pcordway@gmail.com. Below is a sample from his last emailed letter:

Subject: good reading

As usual, if anyone is going to Omaha for the Berkshire Hathaway annual meeting and wants to get together just drop me (Phillip) an email. 

Facts and Figures

• Real, per capita disposable income in the U.S. has declined at 0.4% per year over the past five years (Source: Commerce Dept.)
  • More, if you’re a glutton for punishment: America still has two million fewer jobs than it did in January ’08 (Brookings Inst.); food stamp enrollment is up 70%       since ’08 to a record 47.8 million in Dec. ’12 (SSA); 43% of active workers reported no active saving for retirement (ERBI)
• In happier news:
  • There are 1.7 million fewer underwater home owners (sic) in 4Q12, taking the total down to 21.5% from the peak of 25.2% in 4Q11 (Corelogix); U.S. R&D spending     of 2.9% of GDP is back to its space-race peak economist); household net worth rose $1.17 trillion in 4Q12 to $66.07 trillion, the highest since 4Q07

Links

• 9th Annual      Demographia International Housing Affordability Survey: 2013 — Always a worthwhile read.
• Cred and Credulity: A collection of Popular Delusions      essays from 2009 to 2012 – This is a 244-page collection from      Dylan Grice of SocGen. (If that link doesn’t work just email me for a pdf  copy.)
• Daniel Kahneman & Nassim Taleb Live from NYPL – Audio/video of a panel featuring Kahneman and Taleb discussing decision making.
  • Beware the Big Errors of “Big Data” — More from       Taleb.
• “Household Debt and Credit: Student Debt”      — A presentation from the NY Fed outlining some of the key aspects of the current student loan market. Thanks to Vitaliy for passing this along.

Books

• Top 10 Books for the New Investor, or Great Books to Read      or Review for the Not-So-New-Investor – Hard to argue      with any of these choices from Joe Koster at Value Investing      World. 
  • On a similar note, “The Essays of Warren Buffett” was just released in a Third Edition that is updated to include material from the past few years. An interview with the author is here.
• The Outsiders — This has been recommended by several people, most recently and notably by Warren Buffett himself in his      annual letter. I’ll throw in my two cents — this is probably the best      business book I’ve read in the past year.
  • The Clash of Cultures: Investment vs. Speculation –Buffett also recommended this book, which is Bogle’s living history of the changes (almost all negative) he’s witnessed in 60+ years of financial markets. This is a good and important book.
  • Investing Between the Lines: How to Make Smarter       Decisions by Decoding CEO Communications – Buffett’s third recommendation covers an important topic, but I thought the book left something to be desired. I love the book’s topic and       message, but a look through the author’s “Rittenhouse       Rankings” and the various articles describing it tell you everything you need to know without a 275-page book.
• The Manual of Ideas: The Proven Framework for Finding the      Best Value Investments — John Mihaljevic of “The Manual of Ideas” fame is releasing a new book this summer that looks very promising. In the meantime, his Value Conferences and The Manual of Ideas  are great resources.
• The Great Deformation — I haven’t read this book yet, and I’m certainly not endorsing the author’s views (his last sentence in this essay is particularly nonsensical), so don’t shoot the messenger. But wow, you don’t see a vicious takedown of both sides like this very often. Like the Baupost letter, I would advise that you don’t read any of this with sharp objects at hand.

Attachments

• Baupost 2012 Annual Letter – This has been out for a month or two and I won’t clog your inboxes any further, but if you haven’t read this yet you should. This was by far the winner of any otherwise lackluster shareholder letter season.
• Household formation – A chart from BAML showing the      5-year rolling change in numbers of households, which obviously fell off a cliff in ’08 and hasn’t really rebounded much.
• Buffett Stock Gauge Sends U.S. Caution Signal – Buffett has said that  ”probably the best single measure of where valuations stand at any given moment” is the market capitalization of all stocks (the Wilshire 5000) against gross national product. He added, importantly, that the ratio has “certain limitations in telling you what you need to know.” He believed it would be hard to go too wrong with the ratio in the 70-80% range, with anything approaching 200% deemed to be ”playing with fire.” So there is nothing from his direct commentary to suggest that he viewed 100% as anything more than a round number, but it’s worth looking at where the ratio has been and where it is currently (as well as the margins supporting currently valuations).
• Cyclically Adjusted PE Ratios – Similar to the market cap / NG is the ratio of price to 10-year-average profits shows. This chart, compiled by Goldman, shows CAPE ratios worldwide.

Articles……..

Please join me in attending this course with a great teacher. See you in class!

He developed the “Skyscraper Index” to help identify the end of the boom.

Bubbles, Booms, and Busts

Economics — with Mark Thornton

Cost: $59   Length: 6 Weekly Lectures

Dates: April 24, 2013 – May 28, 2013

Status: Upcoming

Below is the first lecture on chapters 1 & 2 of Mises’ magisterial work, The Theory of Money and Credit. Anyone can understand this work, but they must grasp thoroughly each concept and think through the implications of what Mises is saying. For example, if you understand Mises’ concept of the Subjective Theory of Value, then any theory that teaches that money measures economic value, or that any government should establish policies that preserve the value of money because money is a measure of value, is anti-Misesian.  Therefore, the call for government-licensed monopolistic central bank, is an anti-Misesian call for government intervention into the economy. And there is no measure of economic value, therefore, the government’s consumer price index is meaningless and misleading.

Money transmits value, Mises taught, but money does not measure value. (What?).  Subject valuation “arranges commodities in order of their significance; it does not measure its significance.”

OK, so if you want to delve into the greatest treatise on Money and Credit and become a better investor then I suggest you FIRST LISTEN to the lecture while looking at the Lecture Slides, THEN read the chapters which include the study guide for each chapter. Both the book and study guide are below. Also Gary North’s book, Mises on Money is another excellent study guide incorporating some of Mises’ other works like Human Action.

If folks want me to post more lectures (AFTER) you have listened to lecture one, then let me know in the comments section because it takes time to post the other eight lectures). Or tell me NOT to post more lectures.

Course Outline

2012 1Q Mises on Money and Banking Lecture 1 (Slides on readings)

econ400_lecture1 (MP3)  Lecture- 90 minutes

CHAPTER I

CHAPTER 2

Quiz 1 on Mises Theory of Money and Credit_Ch 1 and 2

Books and Study Guides

Mises on Money and Credit_BOOK

STUDY GUIDE to_Money and Credit

Mises on Money_Vol_3 by Gary North

Lessons for the Young Economist  (for beginners)

To be long gold is, in a grand thematic way, to be short the socialization of risk –James Grant

Listen first econ400_lecture3 as you view these: 2012 1Q Mises on Money and Banking Lecture 3.  Then read the chapters along with the study guide: CHAPTER 3. Supplements to the chapters: Chapter 3 Sanchez Supplement to the Readings

Extra Credit

• THE INTEREST PROBLEM Article mentioned in lecture
• Dissertation on Theories of Interest

Take the quiz: Quiz Lecture 3 on Chapters 5 and 6 in Money and Credit

———-

What Does Cheap Really Mean?

http://www.adventuresincapitalism.com/post/2010/03/15/What-Does-Cheap-Really-Mean.aspx

Everyone tells you that they want to buy cheap stocks. What does that mean? There are so many metrics out there: price to sales, price to book, price to earnings or cash flow. Which are the key ones?

I think people get caught up too often looking at a few key metrics and they lose sight of the bigger picture. In the end, most little companies never become the next General Electric. They either burn out, they hit some plateau and stagnate, or they get acquired by a larger company. When thinking of smaller companies, you really need to ask yourself; what will this company be worth a few years from now and what will a much larger company pay for this business? Remember, acquisitions create cost savings and synergies. For this reason, an acquirer is likely to pay a lot more for a company than the broader market is willing to.

This leads to a bigger question; do this year’s earnings even matter? Probably not. Most people know roughly what this year’s earnings will look like. They even have a reasonable guess about next year’s earnings. No one knows what will happen in three or five years. That’s where you should focus your attention. Look for businesses that can earn many times what they are going to earn this year. Look for growth.

….read more: What Does Cheap Really Mean

Is this company cheap? EGD-FinancialStmt-2012 and research here: http://www.energold.com/s/InvestorVideo.asp

Government finance and the nation’s medium of exchange have in the future to be two separate things. -Ludwig von Mises

The real secret of magic lies in the performance.–David Copperfield

Lecture 3 was here:http://wp.me/p2OaYY-1Sh

 ===

Lecture 4: Listen to the lecture:

https://www.yousendit.com/download/UVJpYnUrK3huSlFzeHNUQw

while viewing the lecture slides:Econ400 Lecture 4

Readings: Money and Credit_Mises Ch 7 and 8

Quiz: Quiz for Lecture 4 Readings Chapters 7

Supplementary Readings:

honest money 

Gold Wars

—

Conditions Today

Video Presentation from an “Austrian” Money Manager, John Hussman http://www.winecountryconference.com/2013-speaker-presentations/

Beware of profit margin REVERSION TO THE MEAN! http://greenbackd.com/2013/04/19/jeremy-grantham-profit-margins-are-probably-the-most-mean-reverting-series-in-finance/

Great Blog on gold, money and markets from an Austrian perspective: www.acting-man.com

Great Attitude for an investor (Rick Rule)

HAVE A GREAT WEEKEND.

Let me know how to improve this blog………

 And as investors expect the low inflation environment to continue, they have responded by reducing commodity and emerging market exposure and pumping more money into bonds. A net 29% of global asset allocators are underweight commodities, the BofA Merrill study finds, up from 11% in March and at the lowest level since December 2008. Asset allocators are avoiding energy stocks as well.

https://www.coursera.org/course/accounting

About the Course

Accounting is the language of business.  Companies communicate their performance to outsiders and evaluate the performance of their employees using information generated by the accounting system.  Learning the language of accounting is essential for anyone that must make decisions based on financial information.

The course is designed to provide an understanding of financial accounting fundamentals for prospective users of corporate financial information, such as investors, creditors, employees, and other stakeholders (e.g., suppliers, customers).   The course focuses on understanding how economic events such as operating activities, corporate investments, and financing transactions are recorded in the three main financial statements (i.e., the income statement, balance sheet, and statement of cash flows). Students will develop the technical skills needed to analyze financial statements and disclosures for use in financial analysis.  Students will also learn how accounting standards and managerial incentives affect the financial reporting process.

Course Syllabus

The course is broken up into ten weekly modules:

• Introduction and Balance Sheet
• Accrual Accounting and the Income Statement
• Cash flows
• Working capital assets
• Ratio analysis and Mid-course Exam
• Long-lived assets and marketable securities
• Liabilities and long-term debt
• Deferred taxes
• Stockholders’ equity
• How to read an Annual Report and Final Exam

Recommended Background

The course is recommended for students with little or no prior background in financial accounting that want to improve their financial literacy.  There are no academic prerequisites for the course.  Although we will work with numbers in the course, the only required math knowledge is addition, subtraction, multiplication, and division.

Suggested Readings

The course is designed to be self-contained.  Students wanting to expand their knowledge beyond what we can cover in this course or who want more practice problems or more in-depth explanations can consult any Introduction to Financial Accounting textbook that is geared toward MBA students.  Because the material in the course has been fairly unchanged for the past few years, any used prior editions of textbooks should be acceptable.

Course Format

The course will combine video of the instructor with Powerpoint slides to the deliver the material.  The lectures will be “interactive” in that the instructor will periodically ask students to pause the presentation and guess an answer before proceeding.  The videos will also cover “case studies” of real companies to illustrate the course concepts.  The course will provide eight short homework assignments and two exams.

FAQ

Will I get a Statement of Accomplishment after completing this class?

Contingent on academic performance, you will get a Statement of Accomplishment stating that you completed this course.  However, no certificate will be given from Wharton / Penn and successful completion of this course does not make you a Wharton / Penn alumnus.

What resources will I need for this class?

Everything you need will be provided via the Coursera platform.

What is the coolest thing I’ll learn if I take this class?

You will not only better understand what people in the business media are talking about, you will also be able to notice when they don’t know what they are talking about!

About the Instructor

Brian J Bushee-University of Pennsylvania

Categories: 
Economics & Finance
Business & Management

–

The French Revolution and Speculator Joseph Fouche

SSOL_Issue_05

Investors have flocked into financial assets while shunning commodity companies because of China slowdown fears and less “inflation.” What if they are wrong?

Skyscraper Index by Mises Updates         Friday, August 23rd, 2013

http://bastiat.mises.org/2013/08/mark-thornton-on-skyscrapers-in-la-monde/

Mises Academy

Bubbles, Booms, and Busts

Economics Econ_BBB_2013_D — with Mark Thornton

COST: $59   LENGTH: 6 WEEKLY LECTURES

DATES: SEPTEMBER 18, 2013 – OCTOBER 29, 2013  STATUS: UPCOMING

Click here to register for this course

This course will cover special topics in Austrian Business Cycle Theory, including the “Skyscraper Index,” the art of predicting downturns, and the causes of the housing bubble and burst that led to the 2008 financial crisis.

Lectures

Lectures will be Wednesdays at 5:30 p.m. Eastern time.

Reading

All readings will be free and online. A fully hyper-linked syllabus with readings for each weekly topic will be available for all students.

Grades and Certificates

The final grade will depend on quizzes. Taking the course for a grade is optional. This course is worth 3 credits in Mises Academy. Feel free to ask your school to accept Mises Academy credits. You will receive a digital Certificate of Completion for this course if you take it for a grade, and a Certificate of Participation if you take it on a paid-audit basis.

Refund Policy

If you drop the course during its first week (7 calendar days), you will receive a full refund, minus a $25 processing fee. If you drop the course during its second week, you will receive a half refund. No refunds will be granted following the second week.

MARK THORNTON

Mark Thornton is an American economist of the Austrian School.^[1] Thornton has been described by the Advocates for Self-Government as “one of America’s experts on the economics of illegal drugs.”^[2] Thornton has written extensively on that topic, as well as on the economics of the American Civil War, economic bubbles, and public finance. He successfully predicted the housing bubble, the top in home builder stocks, the bust in housing and the world economic crisis.

Thornton received his B.S. from St. Bonaventure University (1982), and his Ph.D. fromAuburn University (1989). Thornton taught economics at Auburn University for a number of years, additionally serving as founding faculty advisor for the Auburn University Libertarians. He also served on the faculty of Columbus State University, and is now a senior fellow and resident faculty member at the Ludwig von Mises Institute.^[3] He is currently the Book Review Editor for the Quarterly Journal of Austrian Economics.^[4]

PROHIBITION STUDIES

Libertarian organizations including the Independent Institute,^[5] the Cato Institute,^[6] and the Mises Institute have published Thornton’s writings on drug prohibition and prohibition in general. Thornton contributed a chapter^[7] to Jefferson Fish‘s book How to Legalize Drugs. He has also been interviewed on the topic of prohibition by members of the mainstream press. His research and publications are the basis of the Iron Law of Prohibition which states that the enforcement of prohibition increases the potency and danger of consuming illegal drugs. ^[8] Thornton’s first book, The Economics of Prohibition, was praised by Murray Rothbard, who declared:

Thornton’s book… arrives to fill an enormous gap, and it does so splendidly…. The drug prohibition question is… the hottest political topic today, and for the foreseeable future…. This is an excellent work making an important contribution to scholarship as well as to the public policy debate.

ECONOMIC BUBBLES

Thornton has also written on economic bubbles, including the United States housing bubble, which he first described in February 2004.^[9][10][11] He suggested that the “housing bubble might be coming to an end” in August 2005.^[12] His work on market bubbles has been cited by journalists^[13][14] and other writers.^[15][16] Economist Joseph Salerno noted that “Mark Thornton of the Mises Institute was one of the first to jump on this—to start writing about the housing bubble.”^[17] Similarly, economist Thomas DiLorenzo has written that “[i]t was Austrian economists like Mark Thornton . . . who were warning of a housing bubble years before it burst.”^[1] He also called the top in the housing market. He developed and published his Skyscraper and Business Cycle model in 2005.[13] His Skyscraper Index Model successfully sent a signal of the Late-2000s financial crisis at the beginning of August 2007. [14][15]

Political activities

Thornton has also been active in the political arena, making his first bid for office in 1984, when he ran for the U.S. Congress. He became the first Libertarian Party office-holder in Alabama when he was elected Constable in 1988. He was the Libertarian Party Candidate for the U.S. Senate in 1996 (also endorsed by the Reform Party) coming in third of four candidates. Thornton also served in various capacities with the Libertarian Party of Alabama including Vice Chairman and Chairman. In 1997 he became the Assistant Superintendent of Banking and a economic analyst for Alabama Governor,Fob James.^[2]

Thornton has been featured as a guest on a variety of radio and internet programs and his editorials and interviews have appeared in leading newspapers and magazines.

Books

• The Economics of Prohibition. Salt Lake City, Utah: University of Utah Press, 1991. (ISBN 0-87480-379-9)
• Tariffs, Blockades, and Inflation: The Economics of the Civil War (with Robert B. Ekelund, Jr). Delaware: Scholarly Resource Books, 2004. (ISBN 0-8420-2961-3)
• The Quotable Mises (editor). Auburn, AL: Ludwig von Mises Institute, 2005. (ISBN 0-945466-45-5)
• The Bastiat Collection Volume 1 (editor) Auburn, AL: Ludwig von Mises Institute, 2007. (ISBN 978-1-933550-07-7)
• The Bastiat Collection Volume 2 (editor) Auburn, AL: Ludwig von Mises Institute, 2007. (ISBN 978-1-933550-07-7)
• An Essay on Economic Theory: An English translation of Richard Cantillon’s Essai sur la Nature du Commerce en Général” (Translated by Chantal Saucier) (editor) Auburn, AL: Ludwig von Mises Institute, 2010. (ISBN:�978-1-61016-001-8)

ACADEMY COURSES

• Bubbles, Booms, and Busts
• What Has Government Done to Our Money? A Seminar for Highschoolers

BUBBLE WATCH

Read more in the Short Side of Long: SSOL_Issue_09

FREE

Free issue of Summer Readings from Grant’s:

http://www.grantspub.com/about/Thank-you-summer-e-issue.cfm?submissionGuid=ce75b4fa-1803-4c6f-babe-4f235d19c459

The Dao of Capital:Dao-of-Capital-Spitznagel A kind reader alerted me to this excerpt of a book by an ex-pit trader. We never crossed paths but if you seek the truth eventually your path will cross with others of like-mindedness. The author gives an accurate portrayal of pit trading. An interesting read of an Austrian Trader/Investor.

https://www.santangelsreview.com/ Sign up for his weekly newsletter

Farnum Street

INTRODUCTION 

Below is a rough draft of one of many chapters of the CSInvesting Analyst’s Handbook.  The goal will be to inform and organize all the material on this blog to help others teach themselves.  Criticism–be tough–is welcomed.  The intro is the easy part, building up the other chapters will be a tougher job.

Analyst Book for CSInvesting_Introduction

LEATHER APRON:

The latest version of Leather Apron Letter is available for download:

The Leather Apron Letter 9/27/2013

To subscribe, go to http://leatherapronletter.com/ and enter your email address in the subscribe box.

If you wish to unsubscribe, go to http://leatherapronletter.com/ and enter your email address in the unsubscribe box.

HAVE A GREAT WEEKEND!

Gold is not necessary. I have no interest in gold. We’ll build a solid state, without an ounce of gold behind it. Anyone who sells above the set prices, let him be marched off to a concentration. That’s the bastion of money.~Adolf Hitler

There are about three hundred economists in the world who are against gold, and they think that gold is a barbarous relic – and they might be right. Unfortunately, there are three billion inhabitants of the world who believe in gold.~Janos Fekete

Chapter 1: Analyst Book for CSInvesting_Chapter 1_What is Investing

Inserts:

1. Chapter 20_Margin of Safety Concept
2. Mr Market by Ben Graham
3. Mises on Money_Vol_3 by Gary North

Postscript (Adding)  Montier

http://www.scribd.com/doc/86467853/Value-Investing

Read–Financials: Opportunity or Value Trap   on 13 August 2008. Mr. Montier does a good analysis at trying to find a margin of safety in banking stocks on the eve of the 2008/2009 credit crisis. 

Thank you for your prior comments on the introductory chapter. My main takeaways were: 1. many liked the commentary in the case study and 2. Perhaps break up the large intro into smaller sections.

Listen carefully to this interview with Paul Singer

A GREAT POST FOR INVESTORS 

http://wexboy.wordpress.com/2013/06/07/why-i-read/?blogsub=confirming#subscribe-blog

The immediate & obvious answer, as with most things in life, is ‘What else would I bloody do…?!‘ But I have to admit, I’m an autodidact – always have been, always will be, ever since childhood – which unfortunately made organized education increasingly intolerable** the older I got. However, when it comes to investing, the odds are stacked in my favour – organized education doesn’t offer you a hope in hell of becoming a good, let alone agreat, investor. As people often notice with regard to MBAs… [Again, I can't resist this classic!].

http://www.moderngraham.com/?page_id=1766

Book Club for Value Investors (Discussion) http://www.moderngraham.com/

Graham & Doddsville – Issue 20 – Winter 2014

Can a Firm Have Too Much Debt

1988a_bpea_bernanke_campbell_friedman_summers

Is There Too Much Corporate Debt_Bernankie 1988

The above papers were written during the LBO craze of the late 1980s which, in turn, was driven by the all-time low in asset values of the early 1980s.

Liquidation and Debt Capacity   Worth a read!

Free Course with Yale’s Schiller on Financial Markets and Risk:

https://class.coursera.org/financialmarkets-001

Argument Clinic

“You can’t build lasting stock market gains or solid GDP growth on debt. Because debt cannot expand forever. Sooner or later it must stabilize and then it must contract. When that happens, all the positive features of debt become negative features. Instead of borrowing and spending more, people must spend less and pay off past debt. Instead of adding to corporate sales and profits, they subtract from them. Instead of driving up asset prices, they push them down.”

Borrowed money has an almost magical effect on the way up. It comes out of nowhere. So there is no labor cost to offset against it. It goes almost directly into corporate profits. http://www.rickackerman.com/2011/06/a-gloomy-richebacher-was-prescient-in-1999/

Links

If you have a few favorites, please let me know. 

                                                      -work in progress-

My Other Blogs

Un Inversor Inteligente www.uninversorinteligente.com (spanish)

Ferrer Invest www.ferrerinvest.com/un-inversor-inteligente.html (spanish)

Seeking Wisdom www.seekingworldlywisdom.tumblr.com

Value Investing Research

Magic Formula Investing www.magicformulainvesting.com

Outstanding Investor Digest www.oid.com

The Manual of Ideas www.manualofideas.com

Value Investors Club www.valueinvestorsclub.com

Value Investor Insight www.valueinvestorinsight.com

Value Line www.valueline.com

Value Investing Blogs

All Value Investing www.allvalueinvesting.com  Check out the videos!

Above Average Odds www.aboveaverageodds.com

The Brooklyn Investor: http://brooklyninvestor.blogspot.com/

Buffett FAQ www.buffettfaq.com

Fundoo Professor www.fundooprofessor.wordpress.com

Gannon and Hoang on Investing http://gannonandhoangoninvesting.com/

GrahamandDoddsville www.grahamanddoddsville.net

Greenbackd.com    www.greenbackd.com

Greg Speicher www.gregspeicher.com

Margin of Safety www.amarginofsafety.com

Mungerisms www.mungerisms.blogspot.com

The Inoculated Investor www.inoculatedinvestor.com

Simoleon Sense www.simoleonsense.com

Street Capitalist www.streetcapitalist.com

Value Investing World www.valueinvestingworld.com

ValueWalk www.valuewalk.com

Warren Buffett Resource www.warrenbuffettresource.wordpress.com

Value Investing Sites

Alphaclone www.alphaclone.com

Dataroma www.dataroma.com

Gurufocus www.gurufocus.com

Seeking Alpha www.seekingalpha.com

Value Investing Firms

Ariel Investments www.arielinvestments.com

Aquamarine www.aquamarinefund.com

Baron Funds www.baronfunds.com

Baupost www.baupost.com

Bestinver www.bestinver.es

Century Management www.centman.com

Clipper Fund www.clipperfund.com

Davis Funds www.davisfunds.com

Dreman Value Management www.dreman.com

Fairholme www.fairholmefunds.com

First Eagle Funds www.firsteaglefunds.com

First Pacific Advisors www.fpafunds.com

Formula Investing Funds www.formulainvestingfunds.com

GMO www.gmo.com

Greenlight Capital www.greenlightcapital.com

Himalaya Capital Management www.himalayacapital.com

Hummingbird Value Fund www.hummingbirdvalue.com

Longleaf Partners www.longleafpartners.com

Mackenzie Investments www.mackenziefinancial.com

Muhlenkamp & Co. www.muhlenkamp.com

Oakmark Funds www.oakmark.com

Oaktree Capital Management www.oaktreecapital.com

Olstein Funds www.olsteinfunds.com

Pabrai Investment Funds www.pabraifunds.com

Pzena Investment Management http://www.pzena.com

Redfield, Blonsky & Co. www.rbcpa.com

Sarbit www.sarbit.com

Sequoia www.sequoiafund.com

T2 Partners www.t2partnersllc.com

Third Avenue www.thirdavenuefunds.com

Third Point www.thirdpoint.com

Tweedy, Browne www.tweedy.com

Weitz Funds www.weitzfunds.com

Wintergreen Funds www.wintergreenfund.com

Value Investing Schools and Courses

Centro Enseñanza Online Manuel Ayau www.umayau.com  (spanish)

Columbia Business School www7.gsb.columbia.edu/valueinvesting

Gabelli School of Business www.fordham.edu/cba

Kellogg School Of Management www.bit.ly/zU5n3b

Management Development Institute www.sanjaybakshi.net

Richard Ivey School of Business www.bengrahaminvesting.ca

UC Davis Graduate School of Management www.bit.ly/xkUZ4v

Value Oriented Companies

Berkshire Hathaway www.berkshirehathaway.com

Fairfax Financial Holdings www.fairfax.ca

Notable Economists

Carlos Rodriguez Braun www.carlosrodriguezbraun.com  (spanish)

Jesús Huerta de Soto www.jesushuertadesoto.com  (spanish)

Juan Ramón Rallo www.juanramonrallo.com  (spanish)

Philipp Bagus www.philippbagus.com

Xavier Sala-i-Martín www.salaimartin.com

Amateur Portfolio Managers

Covestor www.covestor.com

Marketocrazy www.marketocracy.com

Unience www.unience.com (spanish)

Media and other resources

Farnam Street www.farnamstreetblog.com

Barking up the wrong tree www.bakadesuyo.com

Futile Finance www.futile.free.fr

Inteligencia y Libertad www.intelib.com  (spanish)

Libre Mercado www.libremercado.com  (spanish)

Grupo Retiro www.gruporetiro.com  (Family Business, spanish)

Michael Mauboussin www.michaelmauboussin.com

Santa Fe Institute www.santafe.edu

Libertarian Think Tanks

CATO Institute www.cato.org

Instituto Juan de Mariana www.juandemariana.org  (spanish)

Ludwig von Mises Institute www.mises.org

A reader suggests:

1. Bronte Capital’s blog – John Hempton shares his thought process and interacts frequently with readers on the blog. (http://brontecapital.blogspot.com/)
2. Distressed debt investing blog (http://www.distressed-debt-investing.com/)
3. Corner of Berkshire and Fairfax forums (http://www.cornerofberkshireandfairfax.ca/forum/)                                 

The free webinar, “SEC Filings Master Class,” took place Nov. 13-15, 2012.

Michelle Leder, who makes her living unearthing news in SEC filings, will help you feel more confident in your SEC-document sleuthing. In three one-hour sessions, you’ll enhance your ability to spot red flags in SEC filings.

WHAT YOU WILL LEARN

• At least four things to look for in Form 10Ks that can result in good stories
• At least four things to look for in proxies that can result in good stories
• At least four things to look for in Form 10Qs that can result in good stories

AGENDA

For each of the documents below, Leder will point out at least four key things to watch for that can produce good stories. She’ll offer examples of stories that have been done, point out where to find these types of stories in the fine print of the SEC document and offer attendees a chance to practice finding the news themselves.

•  Hour One: Form 10-K, or the annual summary of the company’s performance, is filed within 60 days of the end of its fiscal year.
• Hour Two: Proxy, or Schedule 14A, provides information to shareholders before the annual meeting. It includes executives’ compensation.
• Hour Three: Form 10-Q, or the quarterly summary of the company’s performance, is filed within 35 days of the end of each of its first three fiscal quarters. This session will also touch on other key filings.

YOUR INSTRUCTOR

Michelle Leder launched Footnoted.com (originally Footnoted.org) in 2003 to take “a closer look at the things that companies try to bury in their routine SEC filings,” according to the website. Its launch coincided with the release of her book, Financial Fine Print: Uncovering a Company’s True Value. Morningstar bought the site in 2010, but Leder bought it back in 2012.

What do you think?

SELF-GUIDED LESSON

Check out the resources below. At your own pace, you can walk through the self-guided lesson on tips for digging deeper into SEC filings.

http://businessjournalism.org/2012/11/12/sec-filings-master-class-self-guided-training/

Mark Twain: “A mine is a hole in the ground with a liar standing next to it.” 

Initial Steps

We first have to understand the product/market of our gold company. Gold companies produce gold and silver which is money. What is money?  Precious metals have exchange value which makes up a large part of their value.  You first have to understand the gold market. Note: why did gold go down LESS than other commodities such as oil in the 2008/2009 credit crisis?

You need to draw up an industry map. How? Find out who the participants are.

Start with history: http://www.fgmr.com/gold-mining-stocks-have-outperformed-the-djia.html

BGMI http://www.sharelynx.com/chartstemp/free/fchart-BGMI.php

QUIZ: What is the best environment to invest in Gold mining equities. Why?

We will circle back to an industry map after you have read about the industry.

What determines the price of gold: http://www.acting-man.com/?p=10251 Also, do a search for gold and/or mining stocks and then read his posts.

The Case For Gold by R Paul

Gold Dollar by Rothbard

Roubini Why Gold Won’t work

Study: www.monetary-metals.com

Gold as collateral: http://www.alhambrapartners.com/2014/02/26/gold-and-reverse-repos/   Also, do a search for gold.

Read free research on gold as money: http://www.myrmikan.com/port/

View all five videos on money: http://hiddensecretsofmoney.com/

Two excellent books: Gold, the Once and Future Money by Nathan Lewis. Also, Gold: The Monetary Polaris by Nathan Lewis.

Gold and inflation: http://www.garynorth.com/public/department32.cfm

The case for gold:  http://www1.realclearmarkets.com/2011/11/18/my_thoughts_on_lewis_lehrman039s_gold_standard_120618.html

Understand royalty companies: http://seekingalpha.com/article/1341411-gold-and-silver-royalty-companies-part-1-the-pros-and-cons-of-royalty-companies   (read all five parts)

Then read presentations of Royal Gold, Silver Wheaton, Franco-Nevada, Sandstrom from their websites for a good overview of the gold mining market(s).

These sites can get you started. Don’t believe the hype!

• www.theaureport.com
• http://www.mining.com/
• www.kitco.com
• www.321gold.com
• www.goldseek.com
• www.mining.com
• www.sprottgroup.com
• www.caseyresearch.com
• http://www.silver-investor.com/blog/
• https://www.explorationinsights.com/
• http://www.pwc.com/mining
• http://srsroccoreport.com/
• http://jessescrossroadscafe.blogspot.com/
• Listen to past interviews at www.bullmarketthinking.com
• www.sprottresources.com

www.goldsilverdata.com Also, go to http://youtu.be/VjjLhPqO8bY to view video on valuing gold and silver stocks.

Go to www.youtube.com and search for Jim Grant AND gold,   John Doody and mining stocks.  Ditto for Brent Cook, Rick Rule. Search for their comments.

That will get you started and then next week, I will post an industry map. Ask questions.   In two weeks we will crack a company.

Update March 17, 2014: Discussion of Junior Resource Sector