Value Investment Case Study #1

Below are the links to download the most recent quarterly and annual reports for the first blind value investment case study on this blog.  As I stated in one of my previous posts about this I redacted all identifying information about this company so all you will have to rely on is what is found in the financials.

The only information I am going to give you that is not in the financials is that as of this past Friday the company has a current market cap of $4.7 million.

I will not post my analysis until at least a few of your analysis write ups posted in the comments section of this post and I am not looking for a full 7-20 page write-up.  The main things I am going to post about when I write my analysis is valuations, pros and cons, and if I would invest in the company.  If I would at what price do I estimate its intrinsic value to be and at what price would I buy into them.  If I wouldn’t buy into them why not.

I hope that we will all learn a lot from this by seeing each others analysis and helping each other out to see where we could improve.  I also hope that these kinds of exercises will help keep all of our skills fresh while we wait for a market drop.

I hope to see a lot of write ups and hope this is a good exercise for us all.  If you are able to figure out which company this report is (or in case I missed some kind of identifying information to redact) please do not post about it until after the company is revealed.  Also, if you have any suggestions for the next case study please let me know what you think could improve this process for us all.  The financials are directly below.

Case Study #1 3Q 2013 10Q

Case Study #1 2013 10K

Weekend Reading Links And First Case Study Incoming

The first value investment case study will be released this coming Monday and I hope that we can all learn something from it.  Until then on to the links.

Janav.Wordress.com – Be A Learning Machine.

The XX Committee – Is East Asia About To Experience Its “July Crisis?

National Geographic – Mice Inherit Specific Memories, Because Epigenitics?

Remembering The Obvious – Charlie Munger’s Wesco Letters.

Fundoo Professor – The Ashiana Housing Lecture.

Santa Fe Institute – How Complex Systems Science Helps Reveal Market Behavior.

Wiley Online Library – 17 Free Issues About Psychology Topics.

Long Reads – There is Nothing New In Wall St: A Stock Traders Life In The 1920′s.

Value Walk – Understanding And Valuing Financial Companies.

Nathan Barry – Two Years After Quitting My Job 2013 Review.  Amazing story for any entrepreneurs out there like me.

Direction of This Blog For The Time Being

Over the last two weeks I have asked for some input on the kind of educational value investing content you would like to see on this blog until the market drops significantly.  The two-week poll results are in and it appears the majority of you want to see value investment case studies first.  I will begin work immediately on some of those but honestly do not have a time frame for when I will start to post them.

To make it fair for new and advanced analysts alike I am going make it a blind valuation case study where all I am going to give you is the companies financials, footnotes, and other key points from their proxies, annuals, and quarterlies.  I am going to redact the company name and any other potential identifying information so that we can all hopefully learn as much as possible by not knowing which company it is or how much its shares are selling for.  The exercise will be to determine: A) Would you buy this company? B) What would you estimate the companies intrinsic value to be? And C) If you would buy this company at what price would you buy them at?

When I am ready to release some of these I will release the above information one week, wait for some of your reader valuation and analysis write ups to be posted, and then release my valuation and analysis of them a week or two after I release the company financials and other information.

I will only post information on companies that I have not done research into so that we can all do this exercise together and learn from each other.  My hope is that this will be a great help to all of us, that we will all learn a lot, that we will help each other learn, (especially newer investors) and help to keep our skills fresh while we wait for the market to drop.

I plan to get some of these up as soon as possible but I honestly have no idea when I will start posting them because I have never done anything like this before so please be patient with me.

I also will start working on some video content for the blog as well so if you have anything you have ever wanted to know or wanted help with that you think would be good to talk about in a video format please leave a comment below so I can get some ideas for videos.

One last note for today.  In the poll someone voted for the “Other” option but did not comment about what they would like to see.  I would love to hear from you and your idea so if you see this please comment below or email me your idea.

Please Vote On What Content You Would Like To See On The Blog

Last week I announced this vote to determine which direction this blog would take while the market continues to rise.  Whatever wins the vote will be started on first.  Right now it appears that people want to see some value investing case studies first.  The vote will officially end this coming Monday March the 10th which is when I will start on whatever wins so please vote for which you would like to see on the blog until the market drops.

If the market takes a long time to drop significantly I will also work on some of the other vote getters as well so please vote for your desired choice no matter if it has a vote yet or not.

If you have a write in choice of another great idea you would like to see please comment below.

What Kind Of Educational Value Investing Content Would You Like To See Here?

I have looked for companies to invest in and write articles about since launching the book in September (somewhere in the neighborhood of 5000+ companies) and up to this point have had no luck since the market keeps rising.  Since I have only written one new company article since last March, or almost a year ago now, the last time I bought into a company was also last March, and I can find no companies to invest in or write articles about now, I figured I would ask to see what kind of educational value investing content you would like to see on the blog?

Until the market drops significantly I will be working to try to put together any content that you all would like to see so please vote in the poll below and comment in the comments section below about the kinds of educational value investing material you would like to read or view and I will work to put some great content on the blog.

What Educational Value Investing Content Do You Want To See On The Blog?
What Educational Value Investing Content Do You Want To See On The Blog?

Weekend Reading Links: U-Haul, Shane Parrish, Poor Charlie’s Almanack, @MichioKaku, Alien Intelligence, Moats, and More.

Big Think – Yellowstone Super Volcano Is A Much Bigger Time Bomb Than We Thought.

Bloomberg Via @JacobWolinsky on Twitter – Hidden U-Haul Billionaire Emerges With Storage Empire.

Forbes Via @Mungerisms on Twitter – Where To Find The Biggest Ideas For Your Business.  An interview with Shane Parrish who runs the amazing Farnam Street Blog.

Dropbox – Via The Equity Desk Group I am a part of on Facebook – A Free eBook Copy of one of my favorite books ever Poor Charlie’s Almanack.  In my experience the file is so big that the book will need to either be read on a tablet or computer.  It did not work on my phone.  The book has also been added to the Recommended Reading and Viewing page of this blog as well.

The New York Times Via @michiokaku on Twitter – A Scientist Predicts The Future.

The Economist Via @vitaliyk on Twitter – Nelson Mandela: The Long Walk Is Over.

Above The Market Via @ReformedBroker on Twitter – Invert, Always Invert.

iO9.com – Crows Could Be The Key To Understanding Alien Intelligence.

The Sova Group – Moats In Real Life (Mouse Ears Included).

Intelligent Investing – Patterns Of Failure.

On Dedication, Constant Learning, Persistence, and Why You Should Hire Me.

As some of you know since I was 17 (now 27) I have had to deal with extreme dizziness on a daily basis.  Debilitating to the point where I haven’t been able to go to college, have a “Normal” job, or really do anything that I have wanted to do in the past 10 years.  That all finally looks to be changing as I am on a new medication where I have felt very good over the past three weeks.  The best I have felt over a sustained period of time since before this started nearly 10 years ago and think that I am finally ready to be hired.

On Dedication, Constant Learning, and Persistence

I have always loved learning and had planned to go to college before the dizziness started.  My plan was to get my Bachelor’s in business administration/management and then to get an MBA.  Of course nearly 10 years later that has not worked out but my thirst for knowledge has never waned.  When I was at my worst a few years after graduating from high school I was so dizzy every day for literally a couple of years straight that I could do nothing but lay around and watch tv.  After finding an occupational therapist who helped me out some, I very slowly got better to the point where I could read again and started learning about anything that interested me.  I continued to fight, get better very slowly, and rekindled my love in investing that was spawned in high school, and started to learn about it again.

For around five years now I have been constantly learning about investing and how to become the best value investor that I can become.  I have devoured everything I could find (books, blogs, articles, videos, etc) and slowly started to teach myself the intricacies of how to evaluate, value, and determine whether a company is a good investment.  I have completely dedicated myself to becoming the best investor that I can be.  At one point for a year straight between taking care of my then only daughter full-time, and learning about investing full-time, I was working 100+ hours a week (to the detriment of my health) so that I could become a better investor faster.

My investment learning was kicked into overdrive when I found Csinvesting’s wonderful site and decided to start my investment blog several months after that.  In two and a half years I have gone from my first ever “analysis” article to these kinds of in-depth articles, (KOSSSTRTBOBS 1BOBS 2UNAM) and written an entire full length book (How To Value Invest) about my investment journey in the hopes of helping newer to intermediate level investors become better investors faster by teaching readers how to do different valuations and do in-depth research if they are like me and could not or would not go to college.

I have done all of this while still dealing with my dizziness on a daily basis, (although it has continually gotten very slowly better over time) having a wife, two daughters, and being a full-time stay at home dad to my now two daughters.

Why You Should Hire Me

Literally every job I have looked to apply for requires at least a Bachelor’s degree, not necessarily in a finance field, to even be considered for a job in the investment world.  Most also require an MBA and/or CFA.  In valuing and evaluating if a company is a good investment or not (something that I and many others have proven you do not have to get a degree to be very good at) I do not understand those requirements except the CFA, to a degree.  Most people I know have gotten their Bachelor’s or Master’s degrees, get a job, and then stop learning.  Most people I know also absolutely hate working.  I love reading annual reports, proxies, and other financial reports of a company.  I enjoy doing it and it relaxes me so I do not consider it work.  I have a deep passion for finding companies to invest in for my personal portfolio and the portfolios that I manage.  I spend my time reading the equivalent of at least 200 pages a day either of financials, looking for companies to invest in, or learning and improving on some aspect either related to investing or one of my other interests.  My first year resultssecond year results, and updated second year results after discounting cash can be viewed at the links above.  My stock picks in the last two years since I have truly dedicated myself to the craft of value investing are up a cumulative 98.13% not compounded.   I still have a ton to learn and my goal every day that I wake up is to improve my self in some way every single day.

Again, I do and have done all the above in a very part-time manner while still dealing with my dizziness on a daily basis, having a wife, two daughters, and being a stay at home dad full-time to my now two daughters.

My health issues have given me great perspective, the will and want to work desperately, and most importantly as it pertains directly to investing, has taught me an extreme amount of patience which is something that most people lack.  Now that this new medicine is helping me to hopefully get fully healthy I think I would be a perfect hire for any value/research/business analyst/consulting firm.  I am confident in my investment processes, my ability to dig deep to analyze and value companies, my will to fight, and I have the self motivated drive to constantly improve and learn.  I want to work, I have a deep passion for evaluating companies, I am dedicated to it, and I have shown that I will work very hard, long hours to learn and improve.  Wouldn’t you rather have someone with those qualities than someone who has a degree but doesn’t want to keep learning or hates what they do?  If I can get this far largely on my own, admit that I still have a lot to learn, am willing and want to learn and be taught, imagine what I could do with some actual direction and tutelage.

I am open to any and all opportunities, even if they involve moving, and think that I would be a great asset to any firm.  My wife and I are willing to move anywhere in the world if the right job opportunity comes.  I am also willing and plan to get my degree and CFA if I get hired but do not have the means to get either of those until I am hired.

If you know anyone who would possibly want to hire someone like me with my skill set, please pass this along to them.  If you are reading this and would like to talk with me, learn more about me, hear specifically about my investment philosophyhow I do researchhow I decide when to sell a company, the kinds of markets I search in, or hire me please contact me at one of the links here and I will send you my CV and give you my cell phone number so that we can chat in-depth.   I have been learning Mandarin Chinese (Simplfied) and plan to become fluent in the language if any firms out there need someone who knows that language.  我一直在学习中国普通话(简体),并计划成为流利的语言,如果任何厂商那里需要有人谁知道语言。

Thank you for your time and I hope to hear from you soon.

Weekend Reading Links: Ajit Jain, Behevioral Biases, Jared Diamond, Fundoo Professor, Psychology, and More.

Insider Quarterly Via @PlanMaestro on Twitter – Jain Feeds Buffett’s Hunger.

Safal Niveshak – Understanding Behavioral Biases in Finance and Investing.  This is an ebook that was put together by one of Safal Niveshak’s forum posters that is a must read for all of us.  I will also be adding this link to the Recommended Reading and Viewing Page.

London Review of Books Via @theredcorner66 on Twitter – Crops, Towns, and Goverments.  This is a counterargument to Jared Diamond the author of Guns, Germs, and Steel and other books.

Fundoo Professor – Butter Chicken at Birla Maybe, But The Stockholders Are Left With a Lemon.

Oddball Stocks – Why Go Buffett?

Psychology Today – Confronting The World’s Great Unrecognized Crisis.

Priceonomics Via @tferriss on Twitter – The Economics of Infomercials.

Base Hit Investing – Star Managers Case Study Of A Great Business Vs a Net Net.

I Will Teach You A Language – 42 Insane Japanese Language Learning Hacks.

Life Hack Via @tferriss on Twitter – 25 Killer Websites That Make You Cleverer.

Weekend Reading Links: NBA, Less Wrong, Reservations, EV/EBIT, Becoming a Polymath, and More.

The Atlantic - The Four Horsemen May Charge Over The Earth — But Coca Cola Will Remain.

Farnam Street - Thomas Bayes and Bayes’s Theorem.

Aeon - Anyone Can Learn To Be A Polymath.

Safal Niveshak - Life & Money Lessons From Kantilal.

Oddball Stocks - Completebankdata.com.  This is Nate from Oddballs Stocks new site that helps you to research banks with its great software instead of having to do all the searching yourself.

Greg Speicher - EV/EBIT Ratio Trumps P/E Ratio.

The New York Times - Treasure Hunters of the Financial Crisis.

Mises - Native American Reservations: Socialist Archipalego.  I found this article very interesting myself living within a few hours drive of some reservations and some of the poorest ones in the country at that.

Less Wrong - On Learning Difficult Things.  This site was recommended to me by Valueprax and is a site I have learned from since then.  I like to consider myself a pretty bright guy but the people who post on this site are at a completely higher level of smart.  Some of the topics and discussions (called sequences) on the main site include: Reductionism, ethics of artificial intelligence and the singularity, evolution, the philosophy of zombies (not the zombies you are thinking about), self-deception, rationality, quantum physics, etc.  If you like to think, read, learn, and you have an open mind this site is absolutely amazing.

Forbes - Revisiting The Greatest Sports Deal Of All Time.  An update to this article is below.

Bleacher Report - NBA Negotiating With The Silna Brothers To Remedy Their Egregious $300 million mistake.

Only The Paranoid Survive Giveaway Update

A couple days ago I wrote a mini review of Only The Paranoid Survive and announced that I was giving away the book.  The book is still available to anyone in the US that wants it but apparently I wasn’t clear about which version of the book it was and for that I apologize.  The book is the paperback version, and not the ebook/Kindle version.  I will send the book for free to anyone in the US and all you still have to do is email me that you want the book, your name, and address and I will send it to you for free.  I have gotten several emails from people overseas asking for me to send the book to them.  I will if you want me too but if you do want it and live overseas you will have to pay for shipping that could range anywhere from $20-$70+ depending on which country you live in.  Frankly it would be a lot cheaper to buy a Kindle version of the book if you live overseas.

Sorry for any confusion I may have caused with my poor description of the book in my previous posting.