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Strategies & Market Trends : Value Investing
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To: Spekulatius who wrote (55379)5/30/2015 7:25:30 PM
From: E_K_S1 Recommendation

Recommended By
Mattyice

  Read Replies (1) of 78673
 
Re: Baldwin & Lyons Inc. (BWINB)

This looks like a good find. The Graham No. valuation is $32.98/share or about 46.6% undervalued from the current market price. I also see that it's selling 19% below it's stated BV of $26.95/share.

I was thinking today why one would want to be at/near 100% cash especially if one thinks the economy is in a deflationary environment and/or "The Market" is at an all time high and should fall and/or the Fed will begin to normalize interest rates and/or any other scenario that one wants to make to justify holding cash.

What you want to do is (1) preserve your capital and then (2) to grow your capital w/ little to no risk and/or (3) invest your capital in low risk/high reward investments.

In a deflationary environment, people say cash is king but maybe just owning hard assets is king or better yet, owning assets w/ little to no debt that generate valuable FCF is the best.

I have made my money investing capital in low risk/high reward investments. Many times I needed that cash since I bought foreclosed assets for 50 cents on the dollar ( during the 90's S&L crises) so I could flip them. That was more of being liquid AND finding the right investment (ie property flip). One tends to be more selective in their investment choices when economic times are sour.

I would only sit in cash if I knew I could buy cheap assets later and set up my resources so I have large amounts of liquidity (I have access to $500K HOE at 2.5% w/ 24 hours) if a value investment presented it'self. I have paid off all of my debt (no mortgages, no credit card debt etc).

I am always looking for businesses like BWINB that are undervalued and generate FCF.

It looks like these hedge fund managers also like BWINB w/ more Buys reported 3/25/2015.



I will put BWINB on my watch list.

FWIW, I tend to make small bets (usually buy 1% portfolio positions) and maybe it's time to up these Buys to 5% portfolio positions especially if the new value proposition ranks as being one of the better candidates.

EKS
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