June 20, 2008 –
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RELATED TICKERS: BGP
, BKS
, AMZN
From my first blog post: My goal is to seek long term capital appreciation while minimizing risk, risk being a permanent loss of capital. Borders Group (BGP) currently $7.00, Target price = $17 (~140% discount). The business headlines of Borders putting itself up for sale in March 2008 initially got me interested in opening a position. My wife will tell you that I am a complainer. Not only do I complain, but my complaining covers a wide variety of subjects. One of those subjects is brick-and-mortar bookstores. “Who would ever buy a book from here?” I ask every single time we browse a Barnes and Noble (BKS) or Borders bookstore. I am an avid Amazon (AMZN) user and cannot fathom why anyone isn’t. Such rationale has kept me from ever looking at an investment in BKS, BGP, or BAMM (and AMZN has always been too richly valued for my investing appetite). Over the years, though, I have learned that my inability to understand the other side of the equation has prevented me from making otherwise smart investment decisions. Even though I do not understand the consumer attraction to a brick-and-mortar bookstore, I do understand that BGP is undervalued as an investment at current prices. [more]
June 08, 2008 –
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RELATED TICKERS: AXP
, V
American Express (AXP) currently $45, 2010 Target price = $65 (44% discount). There are only three financials I am touching with a 10ft. pole: Goldman Sachs, Visa, and American Express. Okay, Visa is not really a financial. Regardless, people are expecting the entire financial sector to “turn around” in a blink of an eye, but it’s not going to happen. There are a few good reasons, but most importantly, their business models are changing. As a result of the “credit crisis / sub-prime mortgage / exotic derivative business I cannot even fathom” fallout, the rules of the game have changed. How can I accurately value stock in a company that does not even know what it is carrying on their own balance sheet? Investing under those conditions is called speculation, and it’s not for me. I tend to agree with Charlie Munger when he said, “All intelligent investing is value investing.” [1] And value investing is what I’m doing buying American Express. [more]
June 07, 2008 –
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RELATED TICKERS: MCD
, POT
Does anyone else find the following chart to be mind boggling? [more]
June 07, 2008 –
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RELATED TICKERS: BRK-A
, BRK-B
Berkshire Hathaway is one of my larger holdings, so I can’t help but notice a headline like Some Bombs In Buffett’s Book. I know it’s hard to believe, but there are some bears on Berkshire Hathaway. I’ll give you a second to get your breathing back under control. [more]
June 01, 2008 –
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RELATED TICKERS: SHLD
Sears Holdings (SHLD) currently $85, 2010 Target price = $115 (30% discount). Despite all the negative things I have to say about Sears as a store, Sears Holdings is cheap right now. My initial investment in SHLD was qualitatively based, and wrong, as the stock chart clearly states. However, sticking with SHLD as it plunges below $90 again this year is quantitatively based. I believe SHLD is a classic case of the sum of the parts being worth more than the whole. [more]
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