Jim Rogers - Interview

This is an excellent interview from Jim Rogers. Bloomberg don't allow embedding of videos so I have made do with a screenshot with a link you can click on.

Jim is always interesting to listen to - one of the things that I got from this interview is that the next six months to a year are priced in by the market so it is pretty pointless trying to invest according to the news. You can not respond quickly enough to have an edge - really you need to be there six months or a year in advance. This is where the market is. This is quite interesting because when there is real volatility that may be because something that is not expected is being priced in. The other thing that occurs to me is that this leads to an idea of the time horizon for value investing - you should be looking out there more than six months or a year.

Roger Montgomery - Value Investor

Roger Montgomery is an Australian value investor who has a regular spot on Sky. He is something of an enthusiastic self publicist and I suspect has a bit of of a cult following. He is very good. There are many you tube videos featuring Roger - here is one of them:

Roger's approach to investing is seemingly simple - he classifies businesses on a scale of A1 to C4. He then uses ROE to estimate intrinsic value. He then seeks to invest in A1 or A2 businesses that trade at a discount to intrinsic value and sells them when they exceed it significantly or he sees better value elsewhere.

Roger publishes a book "Valu.able" that is available mail order from his web-site. It is an excellent book and I heartily recommend it. The only thing that detracts from the book is the fact that it has a full-stop (period) in the middle of the name.

I got a huge amount out of this book. Roger's gift, as an author, is explaining things clearly with examples and counter examples. There is a book review here. If you are new or newish to value investing I would really recommend it. You can order it from Rogers web-site here.

Wear Sunscreen (Mary Schmich)

This video has nothing to do with investing. A friend of mine passed it on to me and I like it.

Ron Hosen - Value Investor II

"The company is at 61 and it deserves to be at 61 but it does not deserve to be bought there"

I spotted this new Video by Ron Hosen on Friday. Ron Hosen is a private Value Investor with an impressive track record - if I remember correctly he achieved something like a 20% return annually. Over the past couple of years he has generously shared his selections on YouTube. I first came across Ron something like a year ago and very much look forward to his videos.

In Ron's most recent video he also tackles the rather sad issue of his declining quality of life. Ron is in his 70s in, at times poor health, and has very limited fiancees - the investing is something that he does on behalf of his Niece rather than for himself.

The first of Ron's three videos is here - the other two can be found on YouTube.

Watching the Video I noted down the stocks, their price today and Rons suggested entry price - that is the price at which Ron would himself buy the stocks.

Company	Ticker	Price	Entry Price
Peabody Energy Corp	BTU:NYQ	$57.4	$45
Eog Resources Inc	EOG:NYQ	$98.2	$95
Occidental Petroleum Corp	OXY:NYQ	$98.6	$85-90
Seadrill Ltd	SDRL:NYQ	$33.4	$30
Canadian Oil Sands Ltd	COSWF:PKC	$26.6
Total SA	TOT:NYQ	$53.8	$50
Statoil ASA	STO:NY	$23	$20-22
Flowserve Corp	FLS:NYQ	$104	$85
CACI International Inc	CACI:NYQ	$63.7	$52
Innospec Inc	IOSP:NSQ	$30	$28
Rockwood Holdings Inc	ROC:NYQ	$51.8	$42
Teva Pharmaceutical Industries Ltd	TEVA:NSQ	$47.1	$44
Alliance Resource Partners LP	ARLP:NSQ	$74.6	$65
Aecom Technology Corp	ACM:NYQ	$26.4	$24
Macquarie Infrastructure Co	MIC:NYQ	$26.2	$25
Innophos Holdings Inc	IPHS:NSQ	$48	$40
KRONOS Worldwide Inc	KRO:NYQ	$28	$24
Covanta Holding Corp	CVA:NYQ	$16	$15
Ultra Petroleum Corp	UPL:NYQ	$43	$40
Suncor Energy Inc	SU:NYQ	$37.4	$35
Nexen Inc	NXY:TOR	$19	$20

I very much hope that Ron sticks around for a long time.

Parag Parikh - Value investor & the problems of Indexing

Parag Parikh is a value investor that I have a huge amount of respect for. I have mentioned him before in this blog and sure as eggs is eggs I will mention him again. Here is a video that was posted recently that features Mr Parikh talking about indexing and the folly that he sees in indexing. As an Indian investor Mr Parikh invests in the Indian stock market and so the examples that he draws on are different from other markets.

The particular thing that I have been thinking about having watched his video is that an index reflects price rather than value. The price of an index will change as bubbles occur. As Terry Smith points out that in buying and index you inevitably buy shares in companies that you would not normally buy. Similarly if you are invested in an index like say the FTSE100 or the S&P500 really good companies drop out of the index - they can be pushed out by what Parag Parikh calls "fancies" that people pay "fancy prices" - if you buy such an index inevatably, in such a situation, you will buy these companies as well as sell companies that are really good and will give you excellent earnings over the long term.

This is an insightfull presentation by Mr Parikh my only criticism is the quality of the sound which in contrast to the presentation is a little poor.

Margin of Safety - Seth Klarman

In 1991 Seth Klarman, a very well known and respected Value Investor, published a book "Margin of Saftey" it is out of print and I imagine a classic. I imagine that its a classic as you can buy only it costs more than a thousand pounds. With my rough grip on exchange rates I make it about two thousand dollars.

In here is an interesting conundrum. I generally hold that books are an interesting parallel to value investment philosophy. Why? Well a £100 stake in any company will cost you £100. The cost of a bad book is the same as the cost of a good book - all books are about £30 - well not quite but something like that.

Seeing the price on Amazon I looked for a Kindle edition, you would sort of get the Kindle free if it was available. But no it is not - what I did find was that there is a web site that has "made available" the margin of saftey as a PDF. There is a link to his page here. This is sort of the back to basics where, as a child, my friends and I used to record songs off the radio onto tape as tapes were affordable and the radio was, well, free.

Parang Parikh - Value Investor

Coming back from a weekend in away I discovered that there were a couple of new videos posted featuring Parang Parikh. Mr Parikh is a value investor that I have a huge amount of time for. Sadly for me, his firm is based in India and currently the indian stock market is not open to foreign investors.