A while back someone asked me why so many investment bloggers stop blogging.
I didn’t have an answer for him.
Bloggers stop blogging for a lot of different reasons. But, that wasn’t the question? The question was why investment bloggers stopped – especially good investment bloggers. Why, once established, and with some number of regular readers would an investment blogger stop blogging?
Good question.
I still don’t have a good answer.
My own experience with blogging has been mixed. I’ve had some wonderful exchanges with readers and especially with other bloggers. But, I’ve also had a lot of listless exchanges. A lot of people write to you – they don’t comment so much on my blog as email me directly – with questions that aren’t really questions. See, they want a certain answer, and if you don’t give them that answer – well, I’ve found almost everyone to be exceedingly ...
Politicians are always telling us about gas prices.
So I thought maybe gas prices would like to tell us something about politicians for a change.
These “pump points” are based on gapitem data. I’ll explain gapitem in greater detail in a later post. For now, just know that it’s a unit of fuel consumption equal to gas consumption per person per day.
Gapitem = Gas per capita per diem
As the following scores use gapitem, a decrease in per capita gasoline consumption is just as effective in scoring highly as a decrease in the price per gallon of gasoline. The converse is also true – higher consumption, even at the same price per gallon, would result in a lower score.
Tree-hugging environmentalists will love this; laissez-faire capitalists not so much. The latter have a legitimate beef in that people may ...
What strange times we live in when a candle company’s 10-Q reads like an investment bank’s:
The Company invests in a number of financial securities including debt instruments, preferred and common stocks, a joint venture, and a limited partnership that primarily invests in other limited partnerships who invest in real estate investment trusts and marketable securities…Certain preferred stocks are bought and sold on a short-term basis with the sole purpose of generating a profit on price differences…These securities are valued based on quoted prices in inactive markets… the Company held…ARS classified as available-for-sale securities. Auction rate securities are generally long term debt instruments that provide liquidity through a Dutch auction process that resets the applicable interest rate at predetermined intervals in days.…The recent uncertainties in the credit markets have prevented the Company and other investors from liquidating their holdings ...
I don’t usually write on macro topics; however, I do get lots of emails asking me about the economy, markets, etc. I try to respond to these emails. Here are some excerpts from an email response I sent out tonight (some of the following has been edited):
The Fed is in a very tough position. This is a credit problem. It's serious. It's hard to say what the result will be - but it could potentially be very bad. You can have some pretty catastrophic things happen when people start to panic - as far as what happens with money and how all sorts of things can seize up at once. It's really a psychological problem - a spiral of negativity and panic that feeds on itself. People start to do irrational things and then others respond in irrational ways to their irrational actions and so on and so forth.
The possibility of terrible outsized effects from the kinds of problems we're seeing with Bear Stearns etc. is real. The housing problem is real. The economy can deal with ...
In finance, liquidity is not a physical state it is a psychological state. Liquidity is a state of mind. Worse yet, liquidity is in the eye of the beholder. That is not merely to say that liquidity is subjective. Liquidity is subjective, but it’s also more than subjective – it exists in the minds of others – others who can and do transact business with you. So liquidity is – to a great extent – uncontrollable.
Good assets may not necessarily be liquid assets. As a result, good decisions do not necessarily lead to good outcomes when an actor is dependent upon liquidity. An actor is dependent upon liquidity whenever liabilities are great relative to assets. However, an actor can avoid insolvency and make good decisions that will almost certainly lead to good outcomes if the actor can studiously avoid disbursing cash or other assets to meet obligations in the near-term. An actor who can finance an asset by selling a thirty-year zero-coupon bond does not have to worry much ...
This question – more than any other – dogs every discussion of Berkshire Hathaway (BRK.B). It isn’t immediately visible to those arguing on either side (“Berkshire is overvalued”, “No! Berkshire is undervalued”) but it underlies their arguments all the same.
What do I mean when I say Berkshire Hathaway is worth more alive than dead? I mean that Berkshire as a continuing whole is more valuable than a Berkshire that is dismembered into its constituent parts this very day – a Berkshire that is cut up and dished out like a Christmas ham.
Why?
A lot of people value Berkshire as a closed-end investment fund. Peter Lynch wouldn’t make that mistake. He’d see that Berkshire fits the bill as one of his stalwarts:
“Stalwarts are companies such as Coca-Cola, Bristol-Myers, Procter and Gamble…and Colgate-Palmolive. These multibillion-dollar hulks are not exactly agile climbers, ...
Books are an important part of value investing and an important part of this site. They were an important part of value investing right from the beginning – when Benjamin Graham and David Dodd published Security Analysis in 1934 and they were an important part of this site right from the beginning when I reviewed that august title and others on my podcast back in early 2006. Since then, Steven Rosales of Value Blog Review has helped fill the void on this site by supplying ...
in 1934 and they were an important part of this site right from the beginning when I reviewed that august title and others on my podcast back in early 2006. Since then, Steven Rosales of