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Bargain companies revealed

Shares other investors are selling
On this blog, I try to understand the risks of investing and expect that if I can select companies where there is little risk, the reward will follow.
So, it’s no surprise that many of the companies I’ve profiled in recent months fit Benjamin Graham’s criteria for bargain stocks.
I’ve spent much of [...]

A Thrifty Thirty

Thirty cheap and cheerful stocks
Yesterday I identified 160 UK stocks that meet Benjamin Graham’s simple criteria for bargain stocks:

The shares are cheap: They have a price earnings ratio of less than 10
The company owns more than twice what it owes: Shareholders’ funds are more than 50% of total assets.

Graham proposed that investors pick a diversified [...]

Towards a simple Ben Graham screen

Debt to equity, or equity to total assets?
The pain! The pain! As promised, I’ve conjured up a list of bargain stocks using Ben Graham’s system, billed as the simplest way to select bargain stocks.
Although the requirements are simple enough:

An earnings yield of more than twice the corporate AAA bond yield, and…
Shareholders’ funds more than 50% [...]

Remembering ourselves into depression

A contagious crises spread on the Internet
Dwelling on previous bear markets like this (click chart for full-sized version):

And this (click again ):

And the rush to chart, write about, and produce TV documentaries of past crises is symptomatic of a bear market mindset, I fear.
In Animal Spirits, Akerloff and Shiller say recessions are the result [...]

The simplest way to select bargain stocks

Three statistics and a newspaper
Much of the analysis on this blog is devoted to finding cheap companies with little financial risk. That’s because paying too much for companies, or buying companies that are financially insecure, is likely to affect return, adversely. Investing only in cheap, safe companies, on the other hand, boosts returns.
I favour the [...]

Innovation doesn’t inspire

Uncertainty abounds

After reading Alphaville’s alarmist appeal to readers to SELL: Insurers  because of now widely reported fears for their solvency, I tweeted :
Right, that’s it. As of now, I have a strict policy, not to invest in any entity that invests…
A little dramatic perhaps. I’ve avoided insurance companies and banks for nearly a decade, not [...]

The UK’s riskiest big companies

Three risks, and three risky companies
Since the point of investing in companies is to buy a share that will return us more money in the future, the risk investors face is that they might get less money back. The problem, as bankers, around the world have discovered is, we’re not very good at measuring risk.
In [...]

Recession and how we got into it

Because we’re human

The central point of Animal Spirits by professors George Akerlof and Robert Shiller1, is that economic theory, and economic models, don’t work. Far from being part of the solution to our economic woes, they’re part of the problem.
An interesting subtext, bearing in mind the econ. blog wars between vying schools of economic thought2, [...]

William Sinclair, a contrarian conundrum

Guilty of perverse optimism in the first degree

Some people see roses where everyone else sees dandelions or sense opportunity where others despair.
Although perverse optimism is part of being a value investor, it’s difficult to be optimistic about William Sinclair (SNCL). The company’s share price describes long-term decline and stagnation and its latest annual report1 reveals [...]

Is the UK’s most expensive share worth it?

Partial nationalisation is good for shareholders, but not that good
Despite the harrowing price cuts in bank shares under threat of nationalisation, there’s evidence that part-nationalisation works from the States of Jersey, which owns 62% of Jersey Electricity (JEL).
Jersey Electricity has a monopoly on electricity supplied to the island from Europe through two submarine cables. That [...]

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