Monday’s announcement that Berkshire Hathaway (BRK.A) is purchasing Lubrizol (LZ) for $135 a share is just one more example that Warren Buffett is the consummate value investor. Even after paying a $30 premium over the $105 closing price on Friday, we believe that Berkshire Hathaway is purchasing this specialty chemical company at a discount to …
Research Articles
Stop Losses Are for Losers: See Green Mountain, Garmin
Introduction First and foremost, the title of this article does not refer to people who use stop losses in their investing strategies. Instead, the title of this article refers to the actual status of the common stock that the stop loss is placed upon. Therefore, a clear and specific definition of a loser is required …
A Primer on Valuation: 9 Very Fast-Growing Super Stocks
Introduction This article is going to deal with growth stocks and how to value them. First of all, it’s important to point out that growth stocks are very different than ordinary stocks. Growth stocks need to be thought about differently, because they possess powerful attributes that their more ordinary cousins do not. Even though this …
A Primer on Valuation: 8 Examples of How Earnings Growth Drives Dividends and Returns
Valuation Based on Fundamentals In order to prudently answer the question of when to buy a stock, an investor first needs to know the value of the company behind the stock. At the most basic level, a company derives its value based on the fundamentals behind the business it operates. Focusing on, and calculating the …
A Primer on Valuation: Testing the Wisdom of Ben Graham’s Formula
If an investor is going to successfully invest in common stocks over their lifetime, there are three important questions that must be correctly answered. What to invest in? When to invest? When to sell? The first question deals with finding the right company or companies that you believe can deliver the returns you are seeking. …
Ben Graham’s Stock Valuing Formula: It Really Works
Ben Graham’s famed formula for valuing a stock works in the real world! V* = EPS x (8.5 + 2g) Ten Real World examples of companies growing between zero and 5% These ten examples are based on our article: “A primer on valuation: Testing the Wisdom of Ben Graham’s Formula” (part one) published on 2/08/2011. …
A Primer on Valuation: Testing the Wisdom of Ben Graham’s Formula
If an investor is going to successfully invest in common stocks over their lifetime, there are three important questions that must be correctly answered. What to invest in? When to invest? When to sell? The first question deals with finding the right company or companies that you believe can deliver the returns you are seeking. …
Would Ben Graham Give Warren Buffett an ‘F’ for Holding Coca-Cola?
As most everyone knows, Warren Buffett received much of his initial investing education from the father of modern security analysis, the venerable Ben Graham. Personally, I attribute most everything I know about investing from reading the teachings of both Graham and Buffett. To me, it only made sense to learn as much as I could …
6 High Yield Pharmaceutical Companies: Do They Justify the Risk?
Introduction Today Investors are keenly focused on income while simultaneously very risk averse.This current behavior brings with it a level of frustration.The appetite for yield is high precisely at a time when yields on the traditionally safest investments like bonds and CDs, etc. are at historic lows.On the other hand, dividend yields on many blue-chip …
3 Consecutive Double-Digit Years for the S&P 500?
The question posed by the title of this article is whether or not 2011 will be the third year in a row of double-digit returns for the S&P 500. In calendar year 2009 the S&P 500 returned 26.4% and followed this up in 2010 by earning 15.06%. As we look forward to 2011 we see …