Tuesday, October 29, 2013

Short Stories

Artham Capital founder Amit Kumar has written a book called Short Stories, which covers the important basics of short selling. I'm not a short seller, nor do I envision myself becoming one anytime soon, but I read it anyway. I often find myself on the other side of a bunch of short sellers; knowing how they think and what their limitations are can be useful.

Friday, October 25, 2013

Reitmans Is Very Cheap

As Reitmans (RET.A) has seen declining same-store sales and reduced profitability, shares of the profitable retailer have been battered as of late, now down 50% from their year-ago levels. As a result, the company now trades for less than half of its sales, despite a strong net cash position representing one-third of the company's market cap. Furthermore, Reitmans is run by a management team with a strong track record that has implemented a number of initiatives to return margins to normal.Read more...

Thursday, October 24, 2013

InfoSonics...Again

For no reason I could find, shares of InfoSonics exploded yesterday, at one point trading up over 90 cents per. This represents a 100% gain from when it was discussed on this site just five months ago as a potential value investment. Interestingly, thanks to its enormous volatility, this also marks the second time InfoSonics will show up on the Value In Action page.

Tuesday, October 22, 2013

The Effective Executive

When I saw that Amazon's founder and CEO Jeff Bezos recommends The Effective Executive as one of only three books to all of his employees, I didn't think much of it. I had read Drucker before (as discussed here), and therefore had a decent grasp of the principles he expounded. But when I saw the other two books Bezos recommends (The Goal and The Innovator's Dilemma), I had to get this one. That's because, for me, those were two of the most eye-opening/educational books I've ever read.

Friday, October 18, 2013

Rocky Mountain: Way Too Cheap

Shares of Rocky Mountain Dealerships (RME) have fallen dramatically over the last few months, for issues that appear to be only short term in nature. As a result, the company can be purchased for not much more than its 2007 IPO price.

But since that IPO six years ago, both sales and operating income have tripled. Consequently, the company now trades at a P/E of less than 10 despite a history of stellar returns on capital, including an ROE* of 19% for 2012.Read more...

Thursday, October 17, 2013

Best Buy Lives Up To Its Name

One of the toughest (from a psychological perspective) companies I've ever owned is Best Buy. Until recently, that is: the shares are up 250% year to date. While the ending is happy (I'm now out of it), the journey had more than its share of downs, for several reasons.

Friday, October 11, 2013

Data Group Debentures Trade At Massive Discount

Shares of Data Group (DGPIF.PK) have a dividend yield of nearly 20%. In this low-rate environment, Mr. Market is making it clear he does not believe in the sustainability of this dividend. While Data Group has proven itself to be a cash cow, because of the company's debt load, Mr. Market may be right.

But investors don't have to take the downside risk associated with the company's equity, because the company's debt (DGI.DB.A) is trading at a massive discount to par. Data Group's debentures trade at just 58 cents on the dollar (as of Tuesday's close), providing an upside of over 100% should the company make good on these obligations due in 2017.Read more...

Thursday, October 10, 2013

1493

I first heard of 1493 when PlanMaestro called it his favourite book of the year. Until I looked into it at that point, I hadn't realized just how many had enjoyed this book.

Friday, October 4, 2013

Karsan Value Funds: 2013 Q3 Results

Karsan Value Funds (KVF) is a value-oriented fund, as described here. Due to securities regulations, the fund is not open to the public at this time. Should that change in the future, there will be an announcement on this site.

Wednesday, October 2, 2013

Entrepreneur's Guide To Customer Development

I know you think this is a blog on value investing, but to know what you're doing investing in businesses, you need to know a lot about business. How else can you identify when a manager is pursuing a sound strategy, and when he's pissing into the wind? When I first started investing, I don't think I could tell the difference. Now, however, I think I can *sometimes* tell when a strategy is a poor one; though of course I could always be wrong. (The worst position to be in is where you're wrong, but "know" you're right...you have to be vigilant to ensure you avoid that where possible!)

Tuesday, October 1, 2013

Urbana Goes On A Roll

For what seemed like an eternity, shares of Urbana (URB) went absolutely nowhere. After I discussed the company in July of 2011 as a potential value investment, shares continued to drift lower for a good year and a half. As the discount grew wider, investor patience grew thin. But in the last ten months or so, the shares have been on an absolute tear; the stock is up 50% from July 2011 and up more than 100% from its 2012 low.

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