Value Investing In Your Car Episode 7 – Mini Book Review Of Total Recall

Value Investing In Your Car Episode 7 – Mini Book Review Of Total Recall

In Episode 1 of Value Investing In Your Car, I answered the question Does Value Investing Work Anywhere In The World?

In Episode 2I answered the question When Does Value Investing Work Best?

In Episode 3, I told you about the best book I read in 2017, and recommended some other great books that I read in the same year.

In Episode 4, I talked about how my family inspires me to become great and how having someone or something inspire you can change your entire life.

In Episode 5, I talked about how I may have found a new investment for the first time in almost 3 years.

In Episode 6, we talked about Anchoring Bias, its immense power, and how this relates to value investing.

And today in Episode 7, I’m doing a mini book review of Total Recall: My Unbelievably True Life Story – Arnold Schwarzenegger’s autobiography.

Let’s get to it…

Mini Book Review of Total Recall

Probably The Best Autobiography I’ve Ever Read

This is a value investing blog so why the hell are you seeing a picture of Arnold Schwarzenegger above?

To almost anyone on Earth, Arnold Schwarzenegger is likely thought of as a movie star, icon, bodybuilder, Governor of California or some combination of those four things.

But did you know he was wealthy before he became a worldwide movie star?

If you didn’t, you’re not alone…

This biography had been on my radar for years but I didn’t actually buy it until I heard Tim Ferriss interview Arnold about the book and get into how he’s a successful business person and entrepreneur.

I mostly read finance and finance – related information so why would this biography even be on my radar to read at all?

Because for people of my age – I’m 31 – Arnold Schwarzenegger is a bit of an icon.

I grew up with his movies, his fitness programs where in my schools all the way up to middle school, I won several of his Presidential Physical Fitness Awards in elementary and middle school, and after listening to this fantastic book, I learned he was an even bigger influence than I first knew for people of my generation.

For example, I didn’t know he was a huge force in bringing back the Presidential Physical Fitness Awards mentioned above until listening to this book. And I didn’t know he was a huge partner in building the restaurant chain Planet Hollywood that was big in the 90’s.

In short, if you are in my generation in the US, Arnold Schwarzenegger was a force and he had a massive influence on society.

But again, even with this, I didn’t buy the book until he and Tim Ferriss talked about his entrepreneurship and various business ventures. This is what hooked the business nerd in me to finally buy it.

And I’m glad I did…

It’s one of the best autobiographies I’ve ever read. And it’s going into the Recommended Reading and Viewing Page as a MUST READ!!!

Here is a brief video talking about why I loved this book so much.

Some of the stuff you’ll learn in this fantastic book are…

  • How he came from nothing in Austria to become a worldwide icon
  • ALL the business ventures that led him to become wealthy well before he even stepped on a movie set
  • How fantastic his work ethic is
  • How optimistic he is about almost everything
  • How varied his interests outside of movies, bodybuilding, fitness, etc. are
  • How he helped build organizations like the ones above and the Special Olympics
  • How and why he got into politics
  • How he built not only several business empires but also a real estate investing empire
  • And much much more…

After I finished the book, I did some research and found a couple of articles that estimated JUST his real estate investments to be worth north of $300 million.

And this doesn’t include any value from his movies or other business ventures.

So not only is Arnold Schwarzenegger a cultural icon to so many in my generation but he’s also become one of my business icons after listening to this fantastic audiobook.

I’d love to hear your thoughts on Total Recall in the comments below if you’ve read it.

Before you go, here is another great article about Arnold’s real estate empire and the mindset that led him to reach this status.

P.S. If you’d like all future posts like this, make sure to sign up to our mailing list for FREE here. You’ll also gain access to free gifts that will help you become a better value investor as well just for signing up.

P.P.S. If you want to become a great value investor fast and at a fraction of the cost of a normal university check out our new Value Investing 6 Week Masterclass.

Throwback Thursday – Updated Recommended Reading and Viewing Page

Throwback Thursday – Updated Recommended Reading and Viewing Page

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This is the fifth post in our new Throwback Thursday’s Series, where we share with you posts from the past blogs to bring you as much value as possible.

I’m not posting a ‘normal’ article today, instead I’m posting the updated Recommended Reading and Viewing Page in full below.

Why?

Because one of the questions I get asked most is some version of the question “What are some great books you recommend?”

Well these books, sites and videos are some of the best resources I’ve learned from over the years.

This is the most up to date version of the MOST viewed page on this blog every single year. This update includes 11 new book recommendations.

I know the resources on this post and on the Recommended Reading and Viewing page can help you reach your goals.

Jason

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The Best Book I Read All Year – Value Investing In Your Car Episode 3 – Mini Book Review

The Best Book I Read All Year – Value Investing In Your Car Episode 3 – Mini Book Review

In Episode 1 of Value Investing In Your Car, I answered the question Does Value Investing Work Anywhere In The World?

And in Episode 2 I answered the question – When Does Value Investing Work Best?

In today’s video I’m doing a mini book review of the single best book I read all year – Extreme Ownership: How U.S. Navy SEALs Lead and Win.

It's so great I did something I've NEVER done before after finishing it.
This is the single best book I read all year.

In the short 15 minute video I talk about the following things…

  • Why this is the best book I read all year.
  • Where I first heard about this book from.
  • The powerful lessons I learned about leadership and strategy from this book that I’m implementing in my own businesses.
  • Exactly how great this book is… Hint – It’s so great I did something with this book I’ve never done before.
  • Why I read so much.
  • What are some of the other great books I listened to or read this year.
  • And more.

When was the last time you read a book?  What were some of the powerful lessons you learned from it?  What was the best book you read all year?

I’d love to hear see your answers below so we can all see some more great book recommendations and learn from them.

P.S.  I’d love your help naming our new podcast/vlog…  If you have a great name please send it to valueinvestingjourneyteam@gmail.com with the Subject Line of Name For Your Podcast/Vlog so my team knows what the message is about.

P.P.S  If you want to get every post like this in the future please subscribe for free here.

Preliminary Analysis Case Study #1 Part 3 – Book Recommendations And More

Preliminary Analysis Case Study #1 Part 3 – Book Recommendations, Power of Learning, and More

On Monday I announced we were going to begin doing a real-world case study on Constellation Brands – Stock Ticker STZ.

Well, after releasing this post, my team reminded me that there was actually a preliminary analysis my client did before this one. So before we get to the STZ case study, we’re doing to take a detour to talk about Canopy Growth Corp –  Stock Ticker WEED.

I didn’t want to skip this one because there’s a lot of context and talk in this discussion that we don’t necessarily go over in the later training sessions because we’ve already talked about them.

This post is a continuation of the last two posts in this ongoing case study.  Both parts are below:

Below is his unedited preliminary analysis for reference – without any of my comments – for you to get a  look at.

Canopy Growth Corp – WEED

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WEED – Canopy Growth Corp (Canadian Company)

All numbers are in millions of CAD unless noted otherwise.

  • FY Ends March 31st, 2017
  • 3,404 market cap (medium)
  • N/A dividend yield.
  • P/B TTM = 4.92
  • TTM Operating Margin is -39.2 and has somewhat increased over last 2 years.
    • 5 year average OM is N/A
  • Share count has done increased from 77 to 119 from FY16 to FY17. Current TTM is 149m.  Statement of shareholder’s equity??
  • Book value per share has increased from 1.34 to 1.55 from FY16 to FY17. Current TTM is 3.73.
  • Morningstar ROIC TTM is -6.58 and a little higher than the last 2 FY’s
    • 5 year average Morningstar ROIC is N/A
  • TTM ROE is -6.45 and a little higher than the last 2 FY’s
    • 5 year average ROE is N/A
  • TTM FCF/sales is -151 and we can’t tell any pattern. See con note on FCF
    • 5 year average FCF/sales is N/A
  • CCC: No info on the payable period (assume the product is cheap to grow) but DIO exploded on FY2017 to 5,494 days (FY2016 and 2015 avg is about 650 days). Research online says cannabis takes up to ½ year to grow so I would need much more investigation on why inventory takes so long to turnover.
  • EV=3,312
  • EV/EBIT is -73.6
  • EV/FCF is -37.6
  • EBIT/EV (earnings yield) -1.3%
  • FCF/EV (earnings yield) -2.6%

Cons

  • Young company – only about 3 years old after name change (used to be Tweed)
  • Note only balance sheet on Morningstar has FY2015 so we need to look at 10K for data.  We cannot really tell any direction with a 2/3 year old history
  • SG&A & Other are over 163% of Revenue
  • SG&A roughly decreasing and “Other” is increasing
  • Op Income and Margin are (-) but are generally decreasing over time
  • Outstanding shares are significantly increasing over time
  • FCF is increasingly negative as both op cash flow and CapEx are also both increasingly negative
  • Not much experience with Canadian companies
  • Goodwill and intangible assets exploded on FY2017
  • Regulation laws in Canada and USA
  • They bought a lot of companies in FY2016

Pros

  • Cash exploded in FY2017
  • FY2017 Cash & Equiv – Total Liabilities = $39m
  • Book value/share is generally increasing but only for last 3 years
  • Low Debt (also reflected by the ROE and ROIC being similar numbers)
  • Revenue is increasing over time
  • STZ bought about 10% interest in WEED.  Industry took notice and WEED most likely gained some legitimacy with large companies
  • COGS is only 23% of Revenue (doesn’t take much cost to grow product?)
  • High Working Capital Ratio = 9.8 but this high typically suggests either too much inventory or not investing excess cash…

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So, after going through the beginnings of this preliminary analysis process in part 1 on Wednesday, here is part 2 of this discussion below.

In this video, we took a short several minute break from analysis to talk about book recommendations, the power of learning, and much more.

For some reason, when I talk the audio cuts out so below each shorter video I’ve created a video where I’m rehashing what I told the client during our training session.

And my context with the missing sound in the above video here…

Again, as I say in the video,  I’m not sure why my sound cut out on the recording because he could hear me the entire time.  But all of my past videos are like this and we’ve just fixed the sound issue a few days ago, hopefully for good.  For now this is how I’ve got to improvise things.

If you have any comments or questions please post them in the comments section below and I’ll answer them.

I’d also love to see your preliminary analysis as well, so feel free to post these in the comments below.

If you’d like more information about the coaching program this client is in, go to this page.

For reference, he’s in the $ 10,000, year-long program, and this is only after 1 month of coaching, doing nine 1-hour training sessions via Skype.

P.S.  This analysis is based on the preliminary analysis template I developed over a number of years, and after evaluating thousands of companies.  If you’d like a copy of this to do your own preliminary analysis, you can get yours for free here.

P.P.S.  I put on a FREE webinar yesterday teaching The 3 Secrets That Have Helped Me Beat Buffett In The Stock Market, so you can possibly do the same.  If you’d like to sign up for FREE to view the replay of the webinar, you can do so here.

Mini Book Review of Deep Work

Mini Book Review of Deep Work

In this video, I’m doing a mini book review of the book titled – Deep Work, Rules For Focused Success In A Distracted World by Cal Newport

It’s a great and phenomenal book which talks about the importance of deep work versus shallow work.

Deep work is things like writing, producing content, coming up with business ideas, and making business plans.

While he generally defines shallow work as more of administrative stuff such as data entry, research, things like this.

Deep work is things that get you closer to your ultimate goals.  And shallow work while necessary, doesn’t get you closer to your big goals most of the time.

He doesn’t get into a philosophical argument on which one is better for the economy or yourself because both are necessary. But if you want to be successful, make a lot of money, and make a significant impact on the world he argues that deep work is not only the right thing to do but it’s the best route for you to take.

In his research, he estimates that people can only do deep work – which he defines as deep concentration and mentally exhausting work – for only  2 to 6 hours each day.

And without training your mind to do deep work most people can do it for less than two hours in any day.

This phenomenal book talks about how especially in our knowledge economy, how important deep work is because people who do shallow work are being replaced by automation.

I especially appreciate his emphasis on the importance of deep work and focus when it comes to the millennial generation, where I belong as I just turned 30 in December.

My generation was brought up with all this distracting technology so the focus is becoming a competitive advantage.

It’s normal to see people my age trying to do a bunch of things at once.  One example I see on a regular basis goes something like this… They have a movie on while doing research on the computer, while listening to music on their cell phones, all the while doing none of them well, which research has proved over and over again.

This is just one example of the highly destructive and fragmented stuff that takes us away from our deep work and getting closer to our goals.

Throughout the book, he argues that to have a highly paid job in this new knowledge economy, and to not be replaced by automation, that you have to do deep work, become highly productive and skilled, and produce tons of value for either your clients, society, or whoever your audience is.

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You can watch the full video below…