Chance To Win A Free Paperback Copy Of How To Value Invest!

Last week I announced some of the new promotions for the Kindle version of How To Value Invest, a new low price, and how you could get a free copy of that version.  I also said that I had an extra paperback copy that I was going to be giving away for free to residents who live in the US as well.


All you have to do for a chance to win that paperback copy is one of three easy things: Write to me in the comments something that you have learned from this site, something I can improve on, or tell me a company you think is a good value investment now.  I will pick a semi-random winner in two weeks who will I will then send the book to.  Bonus points will be given to the person who gives a particularly good insight or company to potentially invest in and write about.

You do not have to give any kind of in-depth pages long responses, a single ticker, a few words, or a few sentences will suffice.

If you are the winner all you will have to do is send me your address in an email or Twitter direct message, and I will send the book, that is it.

The contest will end on December 9th and please remember that only US residents can win the free book.  Thanks and good luck.

How To Value Invest Kindle Version’s New Lower Price and How To Get A Copy Of The Book For Free!

As some of you have noticed over the last few days the page to buy How To Value Invest has changed a bit.  I meant to announce the changes yesterday but with the big BOBS news coming out I decided to wait until today to announce the changes to the Kindle version of the book.  The contents of the new buy page are directly below and I will talk about some of the changes that were made below that.

Buy How To Value Invest Right Here Right Now!

This is still technically the sales price and I do plan to raise the prices up back to their normal levels at some point so if you want the 25% discount on ALL PACKAGES BELOW please order the book as soon as possible.

The premise of this book is very simple: You no longer need to go to an expensive Ivy League level school to learn how to become an excellent value investor, and I am going to show you the steps I took to teach myself about investing and how you too can become an excellent value investor without going to college.

If you want to become an excellent value investor faster, while also saving yourself a lot of money in the process, then continue on and learn from my value investing journey.  The book is geared towards beginner and intermediate level value investors to help reduce the main problem and frustration I had when I started to teach myself; wasted time.   A small portion of what will be taught in the book is below:

  1. How to use the valuation techniques that I use, how to adjust them, and what they mean for the overall investment thesis.
  2. How to properly evaluate a company’s financial reports, profitability ratios, and debt ratios to help decide if the company is a potentially good investment.
  3. I will tell you how I make sell decisions now and how I used to make them.  This includes me sharing how I missed out on a nearly 70% gain because I didn’t have the proper sell decision processes in place when fully invested and how you can avoid the same mistakes.
  4. I will share with you how I do research now and how I used to do research by showing you how to discard bad companies a lot faster which will save you a lot of time and leads to finding better companies quicker.

If you learn and put into practice what is shown in the book, work hard, continue to learn, and develop your own proper thought, investment processes, and mind-set than I guarantee that you will be a better at evaluating companies for investment than most MBA’s and professional level investors all for less than 1/3 of the price of ONE college textbook, for a fraction of the cost of going to a university, and you will also be saving yourself YEARS of time from having to find all of this information by yourself like I had to.

Also, if you could please take 30 seconds of your time to review the book on Amazon and send me testimonials of the book that I could post on the blog I would greatly appreciate it.

Preview Chapters If you would like to preview the book first please download the First Four Chapters of How To Value Invest to download the introduction and first four chapters of the book.

Other Released Book Excerpts

If you still aren’t sure, check out the first three reviews of the book on Amazon, ALL of which are 5 stars, right here.

Amazon Kindle eBook With A New Low Price Of $9.99 

How to value invest cover for Amazon (2)

Each different link below is for each separate countries Amazon.  This means that if you want the book in a certain language other than English that you need to click on the proper country link below.

Announcing Kindle Matchbook

If you have in the past or plan to buy the paperback version of How To Value Invest (Link below) you can get the Kindle version of How To Value Invest for free with Amazon’s new program that I have enrolled the book in

Kindle Lending Library

Now that How To Value Invest is apart of the Kindle Select program you can borrow the book completely free if you are an Amazon Prime member.

Amazon Affiliate, Createspace Paperback Book cover by Lilam

Buy The Paperback Edition Here for $37The paperback does ship to a lot of foreign countries if you are outside of the US and want this version of the book.  This version can also be bought directly through Amazon as well.

Please remember that How To Value Invest is now apart of Kindle’s matchbook program so if you buy the paperback version of the book you can now get the Kindle version for free.

I decided to get rid of the Gumroad based book packages because the vast majority of people have bought either the Amazon Kindle version or Amazon Createspace paperback version of the book.  Dropping the Gumroad version of the book has allowed me to join Kindle’s Select program which allows me to offer some deals to people who buy the book now.

As you can see above there are now two ways you can get the Kindle version for FREE: If you are an Amazon Prime member you can now borrow the book for free.  If you have bought, or plan to buy the paperback version, you can now get the Kindle version for free as How To Value Invest is a part of Amazon’s new Matchbook program.

The Kindle version has also been dropped in price from $29.25 to $9.99 so if you have waited for a price drop in the Kindle version to buy, now is the time.

The Kindle version does have some limitations in comparison to the paperback version though as three of the bigger tables in the Kindle version had to be replaced with links to where they can be seen on the blog instead of being viewed in that version of the book.  If you want the full unedited version of the book I still recommend getting the paperback version which now comes with a free Kindle copy to take with you on the go.

I am also going to add a third way to get a free copy of the book as well.  I ordered some copies of the book to give to family, friends, and to send out to some funds as kind of my résumé and I ended up ordering one more copy than I needed.

Next week I will announce the start of a value idea contest where the winner will be given a copy of the paperback version for free so get your best value ideas ready.  The contest will be available only to US residents so sorry to those of you outside the US.

I hope you enjoy the new much lower price of the Kindle version of How To Value Invest, the ways you can now get it for free, and thank you to everyone out there who has bought copies of the book.  It means an awful lot.


Chapter 15 of How To Value Invest Excerpt Part 2: When To Sell A Company’s Stock

When To Sell A Company’s Stock

Even though I talked about this a little bit earlier in the book I wanted to expound on my decision-making thought process when selling a company.  Thank you to those readers who asked that I write about this because this is something I struggled with mightily when starting investing.

I have read many times that you should not only come up with a sound buying process but also a sound selling process as well.  For the first several years of my value investing journey I completely ignored this advice when it came to selling and took each sell decision on a case by case basis with no actual decision-making processes intact other than what I thought about the company on that particular day.  This worked for a while but caused some major short-term problems for me once fully invested in my personal portfolio.

Before talking about that situation we need to go back to see why I was fully invested at the time though.  Once I started getting serious about becoming a much better value investor and refining my processes and techniques I started to find more and more companies that were undervalued that I wanted to buy.

However, I still owned some companies from before doing any real research, most of which I was in the red on, and didn’t want to sell them before I made my money back.  As you can imagine, that worked out horribly as you will see below.

Do not buy companies without doing research and do not hold on to bad investments just because you want to make your money back, it will end up costing you even more money in the long run like it did for me.  Do not be stubborn like I was.

Soon after I got serious about digging into companies I found Dole which was talked about in chapter 8.  That chapter was based on my second article about Dole but I actually wrote my first article about them in late May and early June of 2012 describing why I thought they were massively undervalued and how they could sell or spin-off some of their assets to get rid of their massive debt load which would help unlock that undervaluation.  I bought the company in that time frame for the portfolios that I manage but not in my personal portfolio because I was fully invested and in my stubbornness did not want to sell companies that I was losing money on as I described above.

Luckily for the portfolios I manage within 100 days of buying into them, Dole announced that it was going to sell its worldwide operations to Itochu which would enable them to pay off all of their debt if they chose to do so.  The cost basis of the shares I owned of Dole in those portfolios was $8.50 a share.  Dole’s shares had been slowly rising over time but after this announcement came out it sent the share price over $15 at one point and I ended up selling the shares in the portfolios that I manage around $14.50 per share for a gain of 66% in 104 days.

This still hurts a lot more than any actual losses I have had because I put together a good analysis, did the proper due diligence, the investment thesis came together like I thought it would, but I was too stubborn and emotional to sell those other companies so that the situation could be taken advantage of in my portfolio.  What would you hate more, losing a little bit of money on a bad company that you do not want to own, or losing out on a nearly 70% gain in around a 100 days like I did?  Unfortunately I know which hurts more.  Do not let your emotions take control of your investment decisions.

After this I decided that I needed to have solid sell decision processes in place so that I would no longer agonize over my sell decisions, help take emotion out of the equation, and alleviate my inherent stubbornness.

Instead of doing things on a case by case basis which would let emotions make the decisions for me, I now have a very regimented sell decision-making process and will sell in the following cases no matter what:

  1. If I find another company that is a better company to own; more undervalued, bigger margin of safety, better profitability, etc than the company I’m thinking about selling.
  2. If my original investment thesis turns out to be wrong.
  3. If the company’s management starts doing things that I do not like.
  4. If I buy into a company and it reaches the higher end of my valuation range quickly.
  5. If a company I own reaches the higher end of my valuation range and the market as a whole is overvalued.

If a company doesn’t meet any of those criteria I generally plan to hold onto the company for years if my original investment thesis continues to play out.  I also recommend revaluing each company you own at least twice annually as well because its valuation will change when its new quarterly and annual reports come out.

You need to factor the new numbers into your valuations to get a new valuation range when its operations and profitability change over time.  For example if a company continues to improve its operations and profitability over time, the company could remain perennially undervalued and become further undervalued over time.  Search Brazil Fast Food on my blog for an updated valuation of that company for a great example of the previous.  Obviously the reverse will be true also.

Biggest lessons from this section: Do not be like how I was as an early “investor”, do not let emotions and stubbornness rule your decisions, and come up with your own very sound, regimented buy AND sell decision-making processes, the earlier the better.

If you have enjoyed this and other portions of the book I have released thus far please visit this page to buy the book and to see the three reviews, all of which are 5 stars, that the book has received thus far.

If you would like to read other excerpts from How To Value Invest that I have released please view this page.

Chapter 15 of How To Value Invest Excerpt Part 1

Chapter 15 of How To Value Invest Excerpt Part 1

Chapter 15: Conclusion: Challenge To You, How I Do Research, Mindset, Patience, When To Sell A Company.

“Nobody ever takes note of [my advice], because it’s not the answer they want to hear.  What they want to hear is “Here’s how you get an agent, here’s how you write a script, … but I always say, “Be so good they can’t ignore you.” Steve Martin

“Unless you can watch your stock holdings decline by 50% without becoming panic-stricken, you should not be in the stock market.” Warren Buffett

I originally started my value investing blog, Value Investing Journey, and now this book, because of frustrations when I could not find any other single site, group of sites, or books that talked about the things that have been talked about in this book.  Most value investing blogs will talk about the companies they think are good investments, show some basic valuations, talk about why they think the particular company is a good investment, and go into a little detail about the company’s operations.

This approach is fine if you already know how to value and evaluate companies but if you do not you are in for a very long, often times frustrating journey, through the infinite internet until you finally piece enough disparate information together to start the process of learning and implementing valuation techniques, thought processes, and how to properly gauge whether a company is a potentially good investment into your own repertoire.

The Value Investing Journey blog was originally started to keep a journal of my thoughts and valuation and analysis articles so that I could see what I was learning, how fast I was learning, and come back to that later to see how far I had come in the time since I started the blog.

There was one other major reason it was started, and why I eventually decided to write this book as well.  I wanted to help newer to intermediate level investors who like me could not, or did not, want to go to a big time university to learn the techniques that have been shown and have talked about in this book so that you could jump-start your own investing journey a lot faster than the nearly 5 years it has taken me to gain the knowledge that I have.

Throughout this book and on the accompanying blog, I have shown and given you access to all the best information I have learned from that took thousands of hours and nearly five years to put together.  I have shown you how to do the valuation techniques for yourself, talked about my investment thought processes, why I did what I did, and have given you all the tools and necessary information so that you can become a truly excellent value investor without going to college and without having to spend potentially tens or hundreds of thousands of dollars.  While the potential money savings are great I also think that by following this book and the accompanying blog that you can save potentially thousands of hours of your precious time as well.

Now that we are coming to the end of this book the first thing I want to do is to tell you that if you have followed this book closely; have practiced the techniques, learned the terms, and have started learning from the some of the outside resources listed throughout this book and on the accompanying blog, that I guarantee you will now know more about how to value and evaluate whether a company is a good or bad investment better than most MBA’s and professional equity analysts while also saving hundreds of hours of time and tens of thousands of dollars.  It does not matter how much knowledge you have gained though because if you do not apply the knowledge through practice you will not retain any of this information and you will not grow and get better as an investor.

When originally getting serious about investing I used to just read books and websites constantly while never taking any time to practice the techniques that I was learning.  I never took the time to practice the techniques I was learning because I thought that I still didn’t know enough to start evaluating a company properly.  Finally I realized that the reason I wasn’t improving at all was because I was not practicing valuing companies and was not retaining any of the information that I was learning from because of not practicing.  Once again; if you do not practice what you are learning you will not retain the information, you will waste a lot of time having to relearn things, and you will not improve as an investor.  Be confident in your abilities and go out there and keep practicing and getting better.  If you are serious about becoming a much better investor faster, valuing and analyzing companies is not a once every month or so exercise.  You need to practice constantly to keep getting better and to develop your own thought processes about what you think makes a company an excellent investment.  No one else can answer that all important question for you, but you.

I highly recommend starting a value investing blog where you talk about your ideas and post your analysis for everyone to see.  Starting my blog was the number one factor in me getting better as an investor.  Starting a blog is a great way to keep track of your progress to see how much better you have gotten over time.

It is also a very valuable way to keep track of what has and has not worked in your analysis and thought processes because you can always go back to see what you need to improve on and where your thought process and analysis may have been flawed so that you can go back and fix those problems.  It is also a very good way to keep track of things you have done right so that you can keep improving on those thought processes and analysis and keep integrating more of those positive results into your evaluations.

You may have noticed that I have never once in this book said that I will guarantee that you will make a lot of money from the knowledge in this book once you learn the techniques and valuations.  In my opinion people who guarantee those kinds of things are selling you snake oil, should be viewed with skepticism, and should be ignored.  You can put together a great valuation and analysis article and the company’s stock may end up going south fast and you could end up losing a lot of money even if you have a bulletproof analysis put together. You may also not put very much work into valuing and analyzing a company but end up getting lucky by the company that you just bought into getting bought out for a quick double or triple.  Investing is a lot like poker where over the long-term luck does not play a very big role and generally the better players end up at the final tables a lot more often.  But like in poker as in investing luck plays a pretty big role in the short-term.

For example you could find an exceptional company that is undervalued and you see it as a potential double or triple once its full value is realized.  You could put a ton of work into the analysis, write-up a great analysis article, buy into the company and then boom the next day the stock market crashes and you are automatically down 50% the day after you bought into this company.  This is why you must do proper research into an investment decision and put a lot of work into analyzing companies because if you did your proper due diligence and you still feel that the company is an exceptional investment this would be a perfect time to buy more of that particular company and now you would think that instead of a potential double or triple the company could turn into a four bagger plus.

The goal of this book is to get you to be a better investor for the long-term so that over time luck will even out and your skill will show.  I have seen very prominent investors say that you should be happy if 4-6 out of 10 of your investments turn out well.  The goal of this book is to give you the basis to become a .400 to .600 hitter when finding investments.

This book is about teaching you the techniques, valuations, and basic framework of how to become an excellent investor.  These unfortunately are not the most important factors that will decide if you are to become an excellent value investor however.

Thought process, temperament, patience, having confidence in what you are doing, and willingness and dedication to continue to learn and get better are what is going to determine if you become a fantastic investor.  It does not matter how much technique and knowledge of how to value and evaluate companies you have, although this will help greatly, if you are impatient, do not work to develop the proper thought processes for yourself, do not work to continually get better, and do not have the proper temperament you will most likely end up being a very bad investor and losing money.  The following traits are of utmost importance if you want to become an excellent value investor.

Thought/Decision Making Process:  Value investing is generally a very solitary endeavor where you put in a lot of hours of work by yourself to find one company out of hundreds that you think is going to be a good investment.  During those probably dozens or hundreds of hours of research into one company you will have to determine a plethora of things on your own:  If you think the company has a moat, if the company has a moat is it a big one and is it sustainable over the long-term, is it in a dying industry, is it a growing industry, are the companies margins and sales growing or declining, will the company be around in five years, can you trust management, is the company dominant or going to be dominant in its industry, and on and on.

The above examples are only a few of the many things you need to think about and to ask and determine for yourself before investing in a company.  Even if you do have a mentor that you can bounce ideas and thoughts off of and ask questions of (I would highly recommend finding someone you can bounce ideas off of because it will help you become a much better investor faster) still only you can answer investment specific questions for yourself and how these things integrate into your own personal idea of what makes a potentially great investment.  Outside of learning the terms, techniques, valuations, and how to evaluate a company, developing a proper thought and investment process for yourself is going to be the greatest investment you will make that will pay dividends far into the future.  The faster you determine the best thought processes for yourself and how to incorporate those into an excellent investment analysis, the faster you will become a much better investor.

Patience, Temperament, and Confidence:  I combined these three together because they are all needed in concert to become an excellent investor.  Having patience in most things outside of investing is not the same thing as having patience when you buy into a company and its stock goes down 50% shortly after you bought into it.  This is why you need patience, the proper temperament, and confidence all together.

I will go back to the example I used earlier to hit this point home.  Let’s say that after reading this book and evaluating a few companies you find a company that is undervalued, has a stable balance sheet, quite a bit of cash on hand, not a lot of debt, is growing efficiently, has fantastic margins, and has at least a small moat.  You think the company looks like a potential double or triple from today’s prices and its downside is protected at least partially by some land that it owns.  All things look good in your eyes and you can’t believe that the company is so undervalued so you decide to buy into it and put 20% of your portfolio into buying stock in the company.  A few days after you buy into the company the stock market crashes and the stock loses 50% of its value, what do you do? Panic and sell the company because you are afraid you are going to lose more money, wait and do nothing, remain calm and buy more?

If you did your proper due diligence this is when it pays to have written your ideas so you can go back and look at the reasons you bought in the first place.  Again, I highly recommend starting an investment journal or blog because it is a very easy way to keep track of your ideas.  If the company is still in sound shape financially and all that is different is that the company’s stock has dropped by 50% what would you do?

Until you can answer this question truthfully to yourself you should not be investing any real money.  If you still have confidence in your article/report you wrote and you still think the company is financially sound and will survive the market crash you would either want to do nothing or buy more shares.  Patience, proper temperament to remain calm when things are going crazy, remaining unemotional and analytical, and having confidence are especially important when something like this happens and if you do not have enough of these traits you need to work on improving them if you want to become an excellent value investor.

Willingness and Dedication to Continue to Learn and Willpower:  I have always loved learning about everything, have constantly sought out knowledge on my own, and have always pushed to constantly improve at every aspect of my life.  This is one of the reasons I find investing so intellectually stimulating is because there is always something new to learn, something else to get better at, and always another company or situation to research.  If you do not have the willingness and dedication to always learn, get better, and evolve your thought processes you will not grow as an investor.  Because value investing is a very solitary activity you will have to push and dedicate yourself to constantly getting better on your own.  This can kind of be like working out in some ways because if you truly want to improve yourself you will need to get up and do the work even on days you do not want to.

If you have enjoyed this and other portions of the book I have released thus far please visit this page to buy the book and to see the three reviews, all of which are 5 stars, that the book has received thus far.

Excerpt From How To Value Invest: My Investment Philosophy

Excerpt From How To Value Invest: My Investment Philosophy

“Nothing in the world can take the place of Persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan ‘Press On’ has solved and always will solve the problems of the human race.” Calvin Coolidge

Throughout the rest of the book you will be seeing my actual analysis and evaluation articles where that will show you the valuations and analysis that I have done on real world companies.  You will be shown how to value companies using various valuation techniques and how to adjust the numbers for yourself, and what those numbers and valuations mean for the overall investment thesis.  You will also be shown my reasoning’s and thought processes for why I decided what I did and why the particular company was a buy or sell decision for me at that particular point.  Before we get to that though I need to state my investing philosophy so that everyone knows what frame of mind I am approaching the analysis with.

I look for companies that have some combination of the following criteria: Some kind of long-term sustainable competitive advantage, or moat as it is also called, companies that produce and sell products in niche markets, companies that I find to be substantially undervalued, have very good management, high insider ownership, are fantastically profitable, have a lot of cash and/or hidden assets, etc.

I only take into consideration in the valuations and analysis what I can see now, and pay almost no attention to rumoured future possibilities or estimates of revenues and margins into the future.  The only time future possibilities play even a small role in my articles are in situations where there is a clear catalyst: Activist/value investing firm or individual involved, the company is undergoing a strategic review and is owned and controlled by a few people as in the case with Dole (DOLE) that you will see later in the book, or the company’s management is trying to figure out ways to unlock the companies undervaluation by asset sales or spin offs as in the situation with Vivendi (VIVHY.PK) that you will see later in the book.  Even with the above mentioned companies I only valued and analyzed the company as it stood then, and treated future potential as icing on the cake that played almost a zero role in the evaluations.

My number one rule when I buy into a company is preserving capital and making sure that I do not lose money.  The fewer losses I have, the more money that is kept and is able to compound faster when I do find winners so I am a very strict, disciplined, and conservative value investor.  I generally only buy into companies that are selling at a substantial discount, or margin of safety, to my estimate of value for the company so that this way if I do make a mistake in the analysis or valuations then I will still have a chance to make some money.  I usually look for a catalyst that could help unlock the undervaluation of a company such as: Potential for spin-off or asset sale, land or buildings that are not being used that could be sold, activist funds/investment firms that own stock in the company and could push for changes to be made, etc.  I try to find areas of the market where a lot of investors do not or cannot invest and I generally only research companies that have market caps of less than $100 million or special situations like spin offs.  Now that I am more confident in my abilities to value and evaluate companies I do not hesitate to put 20+ percent of my portfolio into one or more companies.  The fewer companies I own the better I know each company.  I am also a very contrarian investor and try to find companies that are either unknown, unloved, or are having problems for potential investments as well.  The less competition there is the better when looking for investments so I try to steer clear of the herd who generally concentrate on bigger companies.  I do not forecast numbers years or even months in advance at all and only value and analyze what I see in the company now so you will not see any DCF valuations in this book.  There are a lot of books out there that explain how to do DCF valuations and I would highly recommend Aswath Damodaran’s free online course on valuation where he teaches how to do DCF valuations if you are interested in those kinds of valuation techniques.

I generally plan to hold the companies I buy for years, decades, or hopefully forever if it turns out to be an exceptionally good company and generally only plan to sell if the companies if their share price rises to the high-end of my valuation range quickly or far above what I think its intrinsic value is after I have bought into it, or if I can find another company that I think is a better investment.

Having stated all of this you now have a frame-work for my thought process going forward and how I manage my personal portfolio and the other portfolios that I manage. If you come across any terms that you do not know refer to as it is the best site I have found that explains investing terms and it is still a site I use to this day when coming across things I do not know or understand.  If you do not find a definition that you find satisfactory or just want to study something further you should search for the term, person, book, etc on my blog or through Google.

I would also like to mention that I have received no formal training in evaluating companies and some of the ratios that will be talked about throughout the book I came up with on my own and have never seen used anywhere else such as the total obligations, commitments, and debt/EBIT ratio which will be talked about later.  I am sure that some professional investors and college professors out there will say that I am technically probably not doing some of the things in this book properly or “How they should be done” but since I had to learn on my own, I have learned to do things that make sense to me, help me to understand the inner workings of a company, and help me to make an informed decision about whether or not a company is a good investment.  In my opinion understanding these things in your own particular way, which makes sense to you, is more important than doing things just because someone else says they are proper.  If something in this book doesn’t make sense to you, don’t use it, find your own way to make sense of things, and come back to it later.  This book is meant to be a practical guide of learning how to evaluate and decide if a company is a good investment without having to spend potentially hundreds of thousands of dollars on a college degree.  Use what makes sense to you, skip the rest, and come back to it later when it does make sense to you and you want to learn how to use it.