Years ago I had a job in a demo garage where we'd scour the neighborhood for junk cars sitting in the yard and we'd offer to take the vehicle off the owners hands…sometimes for a small fee, sometimes we'd pay them, all depends on them, mind you.
And yeah I'm familiar with Ben Graham's death bed statements, but he also talks about how you can strip the net net process to a few basic mechanics and do just fine. I think the real message is DO LESS WORK 😂
I truly think either/or is fine as long as one doesn't delude themselves. And like we've talked about. Investing with your temperament and personality. I love bargain hunting, I'm super A.D.D. and don't mind getting my hands dirty so it just works for me.
Love how you set it up! Is this a hypothetical company or real world example? If real world, are there any liabilities or does it have $12M of net current assets trading for a $5M market cap?
Thank you. And it's hypothetical. But soon I plan to detail some real world cases I have owned and/or own rn. I just wanted to get the basic points across for this piece. Ideally there are zero liabilities, or a very small percentage relative to the current assets, of which I mostly care about cash and accounts receivables.
Gotcha and I definitely agree in the micro cap world those opportunities still exist as there is not perfect information and/or the information has not been “digitized” for computers to pick up through screeners. My personal belief is that why Graham’s approach doesn’t work well is that these opportunities have been arbitraged away due to computing power being disseminated to the masses
If you ever read the 1970s version of The Intelligent Investor, Graham goes through in detail his system/process. However it is in his 2 or 3 page post script where I personally feel he is troubled. He spent his life looking for net nets but in those last 3 pages, he highlights his investment in Geico which outperformed all. Not saying your approach is wrong as I feel it’s “fun” and rewarding
Yeah all the work is in the searching. Once you hit on the right name it takes all of 10 minutes to crunch the numbers. You're absolutely right about MOST of the opportunity being cut away by digitization, but also, that's the edge, for people that care enough to look, there's stuff that will never show up on screeners. And people with lots of money will have a tough time with the illiquidity
And yeah I'm familiar with Ben Graham's death bed statements, but he also talks about how you can strip the net net process to a few basic mechanics and do just fine. I think the real message is DO LESS WORK 😂
I truly think either/or is fine as long as one doesn't delude themselves. And like we've talked about. Investing with your temperament and personality. I love bargain hunting, I'm super A.D.D. and don't mind getting my hands dirty so it just works for me.
Love how you set it up! Is this a hypothetical company or real world example? If real world, are there any liabilities or does it have $12M of net current assets trading for a $5M market cap?
Thank you. And it's hypothetical. But soon I plan to detail some real world cases I have owned and/or own rn. I just wanted to get the basic points across for this piece. Ideally there are zero liabilities, or a very small percentage relative to the current assets, of which I mostly care about cash and accounts receivables.
Gotcha and I definitely agree in the micro cap world those opportunities still exist as there is not perfect information and/or the information has not been “digitized” for computers to pick up through screeners. My personal belief is that why Graham’s approach doesn’t work well is that these opportunities have been arbitraged away due to computing power being disseminated to the masses
If you ever read the 1970s version of The Intelligent Investor, Graham goes through in detail his system/process. However it is in his 2 or 3 page post script where I personally feel he is troubled. He spent his life looking for net nets but in those last 3 pages, he highlights his investment in Geico which outperformed all. Not saying your approach is wrong as I feel it’s “fun” and rewarding
Yeah all the work is in the searching. Once you hit on the right name it takes all of 10 minutes to crunch the numbers. You're absolutely right about MOST of the opportunity being cut away by digitization, but also, that's the edge, for people that care enough to look, there's stuff that will never show up on screeners. And people with lots of money will have a tough time with the illiquidity