On filters, feedback and the future
In practice:
Porvair fits the Thrifty 30 template
Finding the balance sheet is much easier when companies take the trouble to bookmark their electronic annual reports.
Porvair (PRV) does, thankfully, and the company fits the Thrifty 30 template. The shares are cheap, its 10 year PE ratio is nine, and it owns more than it owes (shareholders’ funds [...]
Reintroducing a margin of safety into capitalism
No more flying by the seat of the pants
First, I’m sorry about the lack of posts this week. I’m working on bringing you the Thrifty 30 and the next few weeks might be a bit light too.
The concept of ‘Margin of safety’ is well known to value investors who try to pay less for companies [...]
The Thrifty 30: the story so far
Taking risk out of returns
Money Observer is just about to publish the Thrifty 30, resurrecting an investing formula devised by Benjamin Graham. Keeping my promise to readers, here’s some further reading:
Graham didn’t call his system the Thrifty 30. I derived the name from the Nifty 50, the so called superstocks of the early 1970s.
The Nifty [...]
Why analysts fail
Parroting Piotroski
The more I read it, the more I think Joseph Piotroski’s 2002 paper on value investing is the best summary of value investing, although it’s a little technical.
It marries measures of value to measures of financial strength to identify companies that aren’t just cheap, but good too.
It explains why small cheap companies beat the [...]
Saving capitalism from the capitalists
In a section in the profile of Nouriel Roubini I mentioned in my last post, he acknowledges other ‘whistleblowers‘, people or institutions that warned of financial crisis early on. It contains only two:Raghuram G. Rajan, then chief economist of the International Monetary Fund:
“Raghu Rajan gave a very strong speech in 2005,” [Roubini] says, about excessive [...]
Economists who know what they’re talking about
Every month I write a column for Moneywise Magazine called Join The Dots.
I pick somebody newsworthy and explain what their words or actions tell us about markets.
Next month I’m going to choose an economist who knows what he’s talking about, probably Nouriel Roubini (See this profile in this month’s Finance & Development, an IMF magazine.).
He’s [...]
Three futures
Two out of three ‘aint bad
From the desk of James Montier:
In a research note earlier this month, Mr Montier postulates three futures:
The optimistic path, in which government stimuli create inflation,
A Japanese style protracted work out with low growth and low inflation, and a…
Great Depression modelled on the 1930’s.
He concludes:
In the first two outcomes, value should [...]
Black ‘n blue chips
Too good a headline to waste
It’s nicked from the New York Times, and I’m using it in a forthcoming iBall episode, but it’s just too good a headline to waste.
This morning I wrote the script for an iBall show on shares you can buy for under a pound. It’s probably a very dubious statistic as [...]
This week’s hit list
The calm before the storm
New annual reports were rare in February, but next month we should witness a tsunami of reporting as companies file for the year ending December 2008.
Last week I found six companies that could be cheap (their prices are less than the average of up to nine years of earnings per share), [...]
The six cheapest stocks in February
A glimmer of light?
Here are the six cheapest stocks on the market, as of February 10, according to Dr Keith Anderson’s Naked PE ratio.
The Naked PE improves on the predictive power of the plain ordinary PE ratio by using the last eight years of earnings instead of just one to measure a company’s earning power, [...]
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