Dollar Panic; Valuation Ratios; Buyback Mania, CEFs by CSInvesting
If you think nobody cares about you, try missing a couple of payments.- Wright.
Oil service, oil producers, mining companies etc. are being hammered by a dollar “shortage.” Opportunity may be knocking. Remember what Klarman said about forced selling.
An overview of the situation: Dollar Shortage. With money supply rising in the US there is no dollar “shortage”, but there is a fear of inter-bank lending.
A Reader’s Question on Valuation Ratios. This sheet may be good as a guide to go through an annual report, but none of those ratios means anything without context. Is growth good? It depends. Only profitable growth within a franchise. How about asset turnover? For some companies like Costco asset turnover is critical but not for Boeing (gross margin). Why not take those ratios and work through the financials of these trucking companies. Which company is doing the best? Why? Follow the money! Those ratios may help you structure the information you pull out from the financials. But first focus on how does the company provide a service to its customers and then trace the financial effects back to your returns as an investor.
Buy-Back Mania (a yellow light of caution)
Case Study in capital allocation: Dr. Singleton and Teledyne A Study of an Excellent Capital Allocator (must read!)
Gold is in a hyper bubble……………….
But now not so much…………………
Gold is stupid-cheap compared to all the money out there…………………
A Case Study in investing in Closed-End Funds
Prof. Greenblatt once said that sometimes people just go crazy.
Investors ran to pay a 90% PREMIUM to NAV AFTER a six-year boom and now after a seven-year decline they sell at a 10.5% DISCOUNT. Go figure.
Interesting video on China–a country brimming with centrally planned mal-investment. Is China Already in a Hard Landing?
Read more at reality-check-how-fast-is-china-growing.
We will get back to Deep Value next week and I will post links to valuation class videos. Have a great weekend and if you do try to emulate someone, then: