February 10, 2012

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The Problem with Tootsie Roll Industries for the Value Investing Crowd

May 12, 2010 By Leave a Comment
Tootsie Roll Stock Products

For more than 15 years, I have watched the Tootsie Roll company and waited for it to be "fairly" valued or undervalued relative to the stable profits that churn out year after year like the chewy candies for which the business is known.  It's the type of company that I would love to have a long-term investment in that sits on the balance sheet of my operating businesses and compounds over the decades.  In fact, I love the idea of being able to pass on to my grandchildren shares of the company … [Read more...]

Filed Under: Case Studies & Profiles, Value Investing Tagged With: , , , , , , , , ,

Put On Your Cowboy Hat Because We Just Took a Position in British Petroleum (BP) Stock Options

May 5, 2010 By 2 Comments

Most of you are aware of the natural disaster unfolding in the Northern Hemisphere thanks to a massive oil spill from an out-of-control well owned by British Petroleum. Wanting to find a way to take advantage of what is clearly a terrible situation, I spent the morning studying the BP mess in the Gulf of Mexico.  (As Buffett says, there are always intelligent things to do regardless of what is going on in the world.) Turns out, the stock actually looks cheap other than the fact no one … [Read more...]

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You Have to Focus on Valuation Metrics in the Stock Market!

April 23, 2010 By Leave a Comment
Stock Valuation Techniques

As an Apple, Inc. lover (and someone who spends tens of thousands of dollars a year on hardware and software from Apple for headquarters), I am incredibly excited about what Steve and his team have accomplished.  The results for Apple investors have been remarkable.  Here is the actual quote from a news story today: When Steve Jobs assumed the CEO position at Apple on July 9, 1997 Apple shares cost $3.42 and the company had a market cap of around $3 billion. This week Apple shares hit … [Read more...]

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Using Cash to Increase Your Value Investing Returns

January 10, 2010 By Leave a Comment
Cash In Your Value Investing Portfolio

One of the least discussed secrets of great practitioners of the value investing strategy is the use of cash, cash equivalents, and bonds to augment returns.  From Benjamin Graham and Warren Buffett to Wallace Weitz and Marty Whitman, intelligent use of excess funds has as much to do with growing your capital over the long run as does selecting individual common stocks.  We're going to look at some of the techniques that have been used by value investors to manage their reserves, and the role … [Read more...]

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Earnings Yield as a Value Investing Strategy

January 1, 2010 By 6 Comments
Earnings Yield Stock Valuation

Many famous portfolio managers that practice a value investing strategy have said they think of stocks as "equity bonds".  Instead of receiving a fixed rate of return, like you would when you buy a traditional bond, you receive a variable return based on the company's underlying profit.  This approach makes it easier to value a business.  The most common starting point for the valuation process is calculating a financial ratio known as earnings yield.  In this article, you will learn … [Read more...]

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