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Month: January 2015

Be Careful What You Short

Be Careful What You Short

Shorting on valuation alone is a risky business. Nine times out of ten, the analysis is sound, it’s clear the company in question is overvalued and should be due for a re-rating. However, it’s often difficult to maintain the short position for the required period as there’s no telling how long market exuberance can last. How successful are short selling campaigns? A recent article by Alon Bochman of investment firm, Stepwise Capital provides a real insight into how successful different…

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The Superinvestors of Graham-and-Doddsville: Walter Schloss

The Superinvestors of Graham-and-Doddsville: Walter Schloss

The Columbia University School of Business is synonymous with value investing. It’s where Benjamin Graham, the father of value investing taught and developed the style of investing we now know as deep-value investing during the 1920s. In 1984, in honour of the 50th anniversary of the publication of Benjamin Graham and David Dodd’s book, Security Analysis, the University invited Warren Buffett (undoubtedly Graham’s most successful student) to speak to students. Buffett’s speech became the driving force behind his now famous…

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Walter Schloss Part Seven: Learning From The Master

Walter Schloss Part Seven: Learning From The Master

Walter Schloss – Part seven: Learning from the Master As I’ve covered before, Walter Schloss never went to college. At 18, he started working as a runner on Wall Street at Carl M. Loeb & Co. After a year at the firm, Walter Schloss met with Armand Erpf, a partner of Loeb & Co, who was also incharge of the statistical department. Walter Schloss wanted a job in the statistical department but Armand turned him down. Instead he advised Schloss…

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Walter Schloss – Part Six: The Right Stuff

Walter Schloss – Part Six: The Right Stuff

Walter Schloss – Part Six: The Right Stuff In parts five and six of this series, I’m taking a look of some of Walter Schloss’ deep-value investments that he made over his six-decade long career on Wall Street. These examples have been taken from interviews with Schloss, conducted over the years by financial publications, and there’s plenty to choose from. Schloss was more than happy to talk about his investments and where he was directing his partners’ money. One such…

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Walter Schloss – Part Five: Making Money Out of Junk

Walter Schloss – Part Five: Making Money Out of Junk

Walter Schloss – Part five: Making Money out of Junk The first few parts of this series on Walter Schloss, have looked at the legendary investor’s background, how he got into deep value investing and how he went about finding suitable investments. However, as of yet, I’ve not looked into any case studies, or investments Walter Schloss made, the reasons why and what results they yielded for his portfolio. And with over 100 stocks in his portfolio at any one…

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Walter Schloss – Part One: Introduction To The Master Of Deep Value

Walter Schloss – Part One: Introduction To The Master Of Deep Value

This is the first part of a multi-part series on Walter Schloss, legendary value investor. To ensure you do not miss the rest of the series sign up for our free newsletter. Walter Schloss – Part one: Introduction Just like Seth Klarman, Walter Schloss’ success is virtually unknown outside of value circles. However, just like Klarman, Schloss’ returns over the past few decades were nothing short of impressive. Unfortunately, Schloss passed away during 2012 at the age of 95 but…

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Should investors use EBITDA – or is it a folly?

Should investors use EBITDA – or is it a folly?

“I think that, every time you see the word EBITDA, you should substitute the word ‘bulls**t earnings’.” — Charlie Munger The earnings before interest, taxes, depreciation, and amortization, or EBITDA metric has its uses, and has become an extremely popular standard to measure business performance. However, the figure is highly misleading, it’s easy to manipulate and should be taken with a pinch of salt. (The same can be said for almost all financial figures and metrics, but few are as…

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