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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: geoffrey Wren who wrote (57058)	3/23/2016 9:41:27 AM
From: E_K_S	1 Recommendation Recommended By geoffrey Wren Read Replies (1) \| Respond to of 78748

I recall years back in the 90's one of the disk drive companies was shipping bricks in their boxes. The clue was watching their inventory and when they recognized their revenues. It actually took someone at the warehouse loading dock to notice what was actually being shipped. These fake sales came at the end of the month when the company was trying to meet their booked revenues for the quarter. Oops! For value investors that look at BV, look at tangible vs intangible assets. If inventory makes up a large chunk of those BV assets, see if it is liquid and/or stale. It may only be worth 50% of the stated BV. I like real estate assets in the BV and many times it is understated depending on when they actually bought the property. Also watch those one time charges that turn into several quarters of one time charges. I am quicker now to book gains and exit a position when I start to see these recurring one time charges especially from a new management team. The other thing I always look at is their corporate address. If it is a Chinese company I will always pass as there are just too many other companies to Buy/Sell. EKS

To: geoffrey Wren who wrote (57058)	3/27/2016 3:50:21 AM
From: Shane M	1 Recommendation Recommended By Jurgis Bekepuris Read Replies (1) \| Respond to of 78748

I recall when Skilling called a persistent inquisitor an "asshole" on the earnings call. Now that turned out to be a sign of something bad. I listened to a podcast with Bethany McLean who wrote the story of Enron in The Smartest Guys in the Room amazon.com and she noted that Skilling was so charismatic, and said he had a way of making you feel terrible by saying "you just don't get it" when trying to understand and questioning the Enron business. And in contrast, she said he had a way of making you feel like you were part of the esteemed and enlightened if you joined the "you get it" group. Even when she initially questioned the valuation of the company, she also said she made the mistake initially of not suspecting outright fraud because even if she couldn't understand how they made money, why would the accountants and auditors sign off on the financials for one of the 10 largest companies in the country at the time. One thing Bethany stated she did was cultivate relationships with short sellers to have access to the other side of the bullish stories purveyed by the wall street sell side. Here's a link to the podcast w/ Barry Ritholtz soundcloud.com