CIRCLE OF COMPETENCE

You need to Re-Subscribe, or Why I'm an Idiot

2008-06-18T10:29:00.002-04:00

Hi readers.I totally messed up the feedburner switch on the new site, I merely went about it the wrong way, but, long story short, I believe the new feed didn't carry over my old readers to the new site.If you visit this site, my old blog site, you need to go to the new site and re-subscribe to the new RSS feed. It's in the upper right corner of the site. If your feed, for some reason, did

Circle of Competence Has a New Address!

2008-06-13T21:14:00.006-04:00

I finally completing something I've been anticipating for weeks: The New Circle of Competence. Since I've decided that I rather enjoy writing the blog, and I've been gaining in readership, I felt a new home was better for the CoC. We now have our own domain:http://www.circleofcompetenceblog.comWhat does this mean for you readers? When you go over to the new site, the RSS feed will carry on

Lehman Drops Callan and 100 Readers for CoC!

2008-06-12T10:50:00.007-04:00

I don't have anything substantive to say on the issue, but Einhorn's vindication continues as Erin Callan has now been ousted as CFO of Lehman Brothers, downgraded to a lower position in the company. There is going to be some wild media coming out surrounding this issue in the coming days, I suspect, but needless to say all is not well at Lehman. For the record, I don't believe Lehman has Bear

Carlos Slim: Value Investor and Worldly Thinker

2008-06-10T21:26:00.006-04:00

cValue investing gets a pretty narrow rap. While, in essence, value investing should be defined as merely buying any asset for less than its worth, thus defining all intelligent investing, it often is just spoken of as buying equities with low PE ratios, low price to book ratios, and the like.In reality, value investors come in different flavors, invest in all asset classes, and are all looking

Todd Sullivan Interviews Liveris

2008-06-09T22:29:00.004-04:00

I always like to point out good commentary by others, especially in the financial blogger arena. I've been a long time reader of financial blogs, many of which inspired me to write my own, notably NoiseFreeInvesting, Fat Pitch Financials, F Wall Street, Controlled Greed, Reflections on Value Investing (to which I now contribute), and one I'd like to mention today, Valueplays, a terrific and very

Lehman: A Reader Responds

2008-06-05T23:33:00.005-04:00

My friend Sivaram Velauthapillai, who writes the terrific Can Turtles Fly? blog, responded to my article on Einhorn and Lehman yesterday with some of his thoughts. He brings up good points, though I disagree with many of them, and I'd like to try and give my perspective on his thoughts, and let my readers see a contrarian view on my own. Keep in mind that Sivaram and I have mutual respect for

CoC Battles an Insurgent Columnist

2008-06-04T22:03:00.009-04:00

The media never ceases to amaze me. You’d think that, over time, one would get used to the generalization, exaggeration, and pandering, but after reading a certain article this morning, I find that thesis incorrect.IntroductionThe article in reference is Lehman Battles an Insurgent Investor, from today’s New York Times, written by a lady named Louise Story. Unlike the Asia Times, an internet news

Simply Summing up Sears: A Lesson in Intelligent Investing

2008-05-31T21:53:00.006-04:00

Last week, I argued why Eddie Lampert's current strategy for investing Sears' capital was rational. This week, I'd like to write a little about why the future is bright as well.With all the nonsense media hullabaloo over Sears' awful fiscal first quarter, I thought it might be nice to put the whole situation in context. While the media is talking about how Sears is "ugly," the company "might go

The Next Buffetts? Maybe. Also, 3 Simple Rules from a Canadian Investor

2008-05-28T22:37:00.008-04:00

With much thanks to one of my favorite blogs, Controlled Greed, I found a terrific article written by the Canadian magazine Moneysense.The article is called The Next Buffetts, and it profiles 4 investors whom are thought by many to be "Buffett-like." While this is a recurring article topic, (remember The Buffetteers?) I find each one to be enlightening in that I often discover an investor

The Festival of Stocks May 26, 2008

2008-05-26T10:55:00.007-04:00

Welcome Everyone to the May 26, 2008 Festival of Stocks!We had a lot of great submissions this week to the Festival, so pay attention and read up! They should provide you with much reading material for the week ahead.For Past posts on the Carnival, or a

Einhorn speaks at Tomorrow's Children's Fund Conference

2008-05-25T13:27:00.008-04:00

I read David Einhorn's speech at the TCF charity conference, and once again, I'm impressed.In the first part of the speech, Einhorn goes through some thoughts on Allied Capital, recapping the trouble he's felt since 2002. In one swift analogy, Einhorn crushes the Allied naysayers:"When I speak of investors I am including hedge fund managers. An author onInvestopedia defined hedge funds as “

Einhorn Interview on TheStreet.com

2008-05-23T23:48:00.006-04:00

Here's a cool interview with David Einhorn by TheStreet.com on Allied Capital (ALD) and its devious ways... one I thought you guys might enjoy viewing. To this point, nothing about the man has struck me as fake or deceptive, and it's a shame that honest, analytical individuals like Mr. Einhorn are vilified in the general media.More recently, the publicity of the book has gotten Mr. Einhorn some

LG focuses on ROIC

2008-05-21T22:25:00.005-04:00

I put up a new Reflection this evening on the use of ROIC metrics to improve and value an organization. Go over to Reflections on Value Investing and enjoy.Here's an excerpt:Warren Buffett has made it clear that Return on Capital is one of the most useful metrics in evaluating the strength of a given company.In an interview with the WSJ, LG CEO Yong Nam talks about how an organizational shift to

Primus Investor Presentation Out

2008-05-21T15:11:00.009-04:00

Just a quick note for you guys today: Primus (PRS) presented at a Lehman Brothers Investor Conference this morning and they have posted the webcast from the event, along with their supplemental Powerpoint (32 slides), on their Investor Relations Page.If my last post on the company interested you at all, I'd highly recommend you read the presentation and/or listen to the webcast. The presentation

Buffett Opens Europe in Frankfurt, Switzerland

2008-05-20T14:44:00.004-04:00

On Monday, Buffett held court at a press conference in Frankfurt, Germany to begin his trip through Europe. He commented on buying great businesses, European acquisitions, and the real purpose of his trip. As always, he was in good humor and dropped many investing gems. Watch the Video HereOn Tuesday, Buffett's news conference moved to Switzerland, where he discussed further his thoughts on

Another Attack on Eddie

2008-05-17T19:55:00.007-04:00

src="http://www.valueinvestingnews.com/sites/all/scripts/externalvote.js"type="text/javascript">I read an article called "Sears majesty to hedge-fund dust" at the behest of a reader on the gurufocus message boards, and I have to say it is one of the most uninformed and incomplete articles I've ever read. There are so many misguided and shallow statements that it's hard to know where you'd even

Primus Guaranty: Prime Value

2008-05-16T17:24:00.007-04:00

Since all of my readers know how successful my past forays into financial institutions have been, I’d like to introduce you to another today, a company called Primus Guaranty (PRS). Primus’ main line of business is selling credit default swaps (CDS) to institutions needing to hedge their corporate bond portfolios, and their market value is about $215mm. They call themselves a CPDC, or credit

Buffett Reflects on Great Business: Rising Prices Equal Rising Profits.

2008-05-16T00:46:00.009-04:00

Buffett has reflected many times on the workings of a great businesses. In looking at the transcripts of his speeches to students, this theme and many other recurred. I put my first post up at Reflections on Value Investing today with some Buffett quotes and two terrific transcripts of his talks to MBA students at Notre Dame and the University of Florida.Go over to Reflections and enjoy.

What do Buffett, Pabrai, and Jim Rogers Have in Common? They Look For the Obvious

2008-05-15T02:34:00.005-04:00

It sounds crazy that Warren Buffett and Jim Rogers might have something in common besides intellect and wealth. Buffett has owned the Washington Post for 35 years, Coca-Cola for 18 years. Jim Rogers owns exotic commodities and currencies, usually leveraged up to the hilt, and was once partners with the most famous speculator in the world, George Soros.However, I’ve now read enough about Rogers

Fooling Some of the People All of the Time

2008-05-12T23:00:00.007-04:00

I finished David Einhorn’s investing “novel” Fooling Some of the People All of the Time this afternoon, and I have nothing but praise. I mentioned here that I’d write up a quick review, so I’d like to do just that.The StoryIn the early chapters, Einhorn does a great job introducing us to himself and the beginnings of his firm, Greenlight Capital. He talks of his early years working as a hedge

Jaclyn, Inc.: Success

2008-05-12T14:33:00.004-04:00

Update May 23: Cash Received, JLN transaction officially closed. I just wanted to give everyone a quick update on the Jaclyn transaction. My shares were taken from me this morning, and "submitted for cashout" to JLN. According to my broker, they are merely waiting on a cash out date, which should be sometime in the next few weeks.I bought in at $7.82 / share, and I should receive 10.21/share

Joining Reflections

2008-05-11T21:17:00.006-04:00

I just wanted to update everyone quickly on a great new situation for me. I've been invited by the current contributors of Reflections on Value Investing, a terrific site that features "Reflections," stories of interest to the value investing community, with excerpts and a link to each interesting item. The site was started by Shai Dardashti, who runs Dardashti Capital Management, and has some

First Marblehead Update

2008-05-10T14:29:00.006-04:00

First Marblehead released their earnings for their FY 08 3Q (their fiscal years run summer to summer) on Thursday. As I expected, the numbers were not pretty, but I actually saw some things I like in there, and their balance sheet remains viable. Read my original take on First Marblehead here.Here's the DealFirst, the actual earnings: the company lost $229mm on a GAAP basis, compared to a $71mm

Of Toads and Princes: The Yahoo! Deal Falls Apart

2008-05-04T01:32:00.001-04:00

I’d like to focus CoC mainly on intelligent investing topics- stock analysis, mental models, margin of safety and the like. That’s what we here at CoC love most. With that said, I can’t resist a comment on this Yahoo!-Microsoft nonsense.My first reaction when hearing about this potential transaction was…huh? Take a terrific business, one of the best on the planet in Microsoft, and spend $40

Jaclyn: Arbitrage for the Little Guys

2008-04-29T18:52:00.001-04:00

Arbitrage is as time-old as any market "technique" out there. When we talk about arbitrage spreads, we are speaking of two companies merging, a large tender offer, or other “workout” situations with a defined shareholder payout and a (relatively) defined time period. There are also defined reasons why our investment won’t work out. Buffett called it “upsetting the applecart.”IntroductionWhen