Competition Demystified: Chapter 13

The author of the excellent book for beginners, Value Investing: From Graham to Buffett..., is back, this time with a book about how to understand and analyze competitive advantages. Investors interested in better understanding what gives a company a competitive advantage must give this book a read.

Amazon: Steady Growth

Amazon (AMZN) is the world's largest online retailer, with annual sales of $48 billion in 2011. The company is seen as taking share away from traditional retailers, and in so doing it has grown revenue at a rate of about 35% per year for the last three years, suggesting it may be a good long-term buy.

Value Investing With Currency Risk

To get the most out of the possibilities offered by value investing, investors should be prepared to buy outside of their home countries. For example, the natural disaster in Japan last year likely caused the prices of some securities to fall undeservedly from the viewpoint of the long-term investor. (Today, some areas of Europe may be in the same position due to less natural disasters.) But a major concern of international investors is currency risk. Long-term value investors situated in developed countries, however, shouldn't worry about it.

Equitable Group: Earnings Over Cash

When companies make investment decisions with their capital, such decisions should be based on the cash flows the investment is expected to return. Because cash flows are volatile, earnings calculations are a useful way of measuring how successful such investments have been. Unfortunately, this creates a management incentive to invest in a manner that maximizes earnings rather than cash flow, which does a disservice to shareholders.

Consider Equitable Group (ETC), a mortgage lender to single families and commercial interests.

GameStop: The Long AND Short

Is there a more polarizing stock than GameStop (GME) right now? The short interest in this company is almost 50% of the company's float! At the same time, the company's strong cash flow relative to its price makes it attractive to a number of value investors. So who's right?
Read more...

Effecting Change At Manhattan Bridge Capital

On Friday, Manhattan Bridge Capital issued a press release in response to my article from last week titled "More Wonkiness At Manhattan Bridge".

Competition Demystified: Chapter 12

The author of the excellent book for beginners, Value Investing: From Graham to Buffett..., is back, this time with a book about how to understand and analyze competitive advantages. Investors interested in better understanding what gives a company a competitive advantage must give this book a read.