From Francis Chou´s Letter of the Manager from the Annual Report 2010: Before we invest in troubled companies we always ask questions and base our decisions on some of the criteria outlined below. It is impossible to list all the criteria but these are the main ones we look for: 1) Where does the debt … Continue reading Nugget: Francis Chou on Investing in Debt Securities
Category: Fundamental Finance
Francis Chou | Deep Value Investor
Francis Chou is a Canadian value investor and principal of Chou Associates Management Inc. In 1981, together with six fellow telephone repairmen, Francis Chou started an investment club with $51,000. He left Bell Canada in 1984 and became a retail analyst at GW Asset Management. He turned the investment club into Chou Associates Fund in 1986. … Continue reading Francis Chou | Deep Value Investor
Nugget: Damodaran on simulations, sensitivity analysis and decision trees
Damodaran on probabilistic approaches to risk assessments in finance: • In the most extreme form of scenario analysis, you look at the value in the best case and worst case scenarios and contrast them with the expected value. In its more general form, you estimate the value under a small number of likely scenarios, ranging … Continue reading Nugget: Damodaran on simulations, sensitivity analysis and decision trees
Nugget: Madison Square Garden Valuation
From Brian Griffin´s article "Madison Square Garden Seems Significantly Undervalued" : Valuation: I will keep it relatively simple as I've always felt that the more numbers you need, the less likely it is that you have a real winner. You can add up the low end of my estimates and come up with 800 + … Continue reading Nugget: Madison Square Garden Valuation
Warren Buffett on the Borsheim Business Model
Borsheim's Fine Jewelry is an Omaha-based jewellery store that in 1989 was acquired by Warren Buffett's Berkshire Hathaway. From the 1988 Berkshire Hathaway Letter to Shareholders You won’t be surprised to learn that this family brings to the jewelry business precisely the same approach that the Blumkins bring to the furniture business. The cornerstone for … Continue reading Warren Buffett on the Borsheim Business Model
Nugget: In praise of Vagueness
Excerpt from "In Praise of Vagueness; Malleability of Vague Information as a Performance Booster" by Himanshu Mishra, Arul Mishra and Baba Shiv "In the domains of goal setting and selfpresentation, research has found that people strategically distort vague information to perceive themselves as at an advantage. For instance, athletes were more likely to exaggerate their … Continue reading Nugget: In praise of Vagueness
Nugget: Third Avenue takes on a position in Madison Square Garden common
To my surprise, Curtis R. Jensen, Chief Investment Officer of the Third Avenue Small-Cap Value Fund, revealed in his letter to shareholders from April 30th. 2011, that the fund had added Madison Square Garden common shares to its portfolio. Third Avenue operates value oriented mutual funds, based on the principles of Ben Graham. Its founder, … Continue reading Nugget: Third Avenue takes on a position in Madison Square Garden common
Nugget: Why Shareowner Value?
Prem Watsa is one of those who has praised the quality of Roberto C. Goizueta´s article of the importance of shareholder value creation as a central mission for corporations. "We have one job: to generate a fair return for our owners, who have entrusted their assets to us. Without focusing on that job, we fail. … Continue reading Nugget: Why Shareowner Value?
Nugget: Biglari on taxes
An exerpt from the 2010 Annual Report of Biglari Holdings (link): "In the long run, all gains — realized and unrealized — are essential to the value of the company. But the timing of realizing gains or losses does not impact business value. Therefore, we do not realize gains or avoid realizing losses in order … Continue reading Nugget: Biglari on taxes
Francis Chou on Sovereign debt (in the Annual Letter of 2009)
"It is hard to believe that governments can and do default on their debts and, as the following table shows, even with their power of taxation and the ability to print money, governments have to obey the laws of economics. Just like an individual or a corporation, if governments cannot service their debt, they either … Continue reading Francis Chou on Sovereign debt (in the Annual Letter of 2009)