On October 15, 2007, I took a look at Nutrisystem (NTRI) about two weeks after a 25% drop. Running a fairly conservative analysis (in my opinion), I pegged the company as a $38 or so company. Add in a little uncertainty and a 50% margin of safety, and I said I'd consider investing under $19.50 a share.

Then, it fell off my radar.

Continue Reading Do As I Say, Not As I Do ››

Building on a theme started back in March (How Bad Will This Get), I think it is safe to say that the US economy is weakening. We can choose to ignore the fact that millions of homeowners have zero equity and super-high mortgage payments they can't afford; we can pretend that $4.20 per gallon gas prices have little effect on people, other than "mild" discomfort and anger.

When it comes to business and investing, it doesn't pay to be an optimist or a pessimist; the big money is made by realists. If you can take all of the emotion — yours and that of others — out of your investing, you can begin to more clearly predict the future with a degree of confidence and competence. Forget tomorrow. There is no tomorrow.

Here's your crystal ball question.

Continue Reading There Is No Tomorrow. ››

If you don't have a few thousand dollars to blow each month on a data service that scans the SEC's database, aggregates the full financial statements (instead of summarizing them like Yahoo! Finance), and puts relevant information at your fingertips, I've got good news for you — you no longer need it. On Wednesday I sat in on a conference call with the SEC to discuss some upcoming changes to their EDGAR filing standards. XBRL will be the new standard, and it is very exciting for "regular" investors.

Continue Reading XBRL: The New SEC Filing Standard ››

In yesterday's comments, Vik, Jeff, Miguel S, and likely a number of others that did not post comments were curious: How the heck did I find Graham, and why was I looking at it in the first place? I think that question is posed to a lot of non-conventionalists that preach "FIND THE CASH FLOW!" and "BUY BUSINESSES WITH MOATS!", and then buy a bunch of companies that look a lot like overpriced or soon-to-fail garbage with little or no cash flow.

Legendary investor Peter Lynch said, "The person that turns over the most rocks wins the game. And that's always been my philosophy." You won't find a Graham Corporation — or any Small Fish for that matter — in a traditional stock screen for solid companies. Let's look at how you can turn over more rocks.

Continue Reading Uncovering Opportunities in All Markets ››

Thanks all for your kind words. Amazingly, my brother should make a full recovery after three and a half weeks in the hospital (including two weeks in intensive care). Without going to much into detail, he was blindsided by severe pancreatitis which almost ended his life. Thanks again for your patience and understanding. Let's make some money.

On April 17th, I discussed the Art of Selling Your Stocks and briefly mentioned my investment in Graham Corporation. In doing so, I caught some feedback and lashings from a few visitors. David asked if this was a "cigar butt" investment; (MikeR) posted a Charlie Munger quote about assiduity — the art of sitting on your ass and doing nothing because your companies are great or the markets are not offering any wonderful opportunities. Was GHM a cigar butt? Did I forget to practice my assiduity?

Continue Reading Why I Bought (and Sold) Graham Corporation ››