How to Search for Opportunities
Learn how to uncover hidden gems and avoid value traps by using the EDGAR database, stock screeners, and more.
Where to Look For Ideas in This Market
10/8/2008 | Joe Ponzio | 20 Comments | about: ORHI
Everybody knows that Warren Buffett gets his investment information largely from annual reports. Today, companies call him; but, fifty years ago, Buffett was not the go-to guy if you wanted to sell your company or raise capital for your failing bank.
In an interview with Warren Buffett, Adam Smith, author of Supermoney, asked how “regular” investors can find good investment ideas.
Warren Buffett: [Investors should] do exactly what I did forty-odd years ago, which is to learn about every company in the United States that has publicly traded securities, and that bank of knowledge will do him or her terrific good over time.
Adam Smith: But there are twenty-seven thousand public companies.
Warren Buffett: Well, start with the As.
Here’s how.
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XBRL: The New SEC Filing Standard
5/16/2008 | Joe Ponzio | 7 Comments
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.
Uncovering Opportunities in All Markets
5/15/2008 | Joe Ponzio | 9 Comments | about: GHM
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.
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Keeping Up With Your Businesses
3/10/2008 | Joe Ponzio | 23 Comments
I have to admit – going to the EDGAR database every day to look for new filings is not one of my favorite tasks. When engaged in workouts, I find myself checking EDGAR multiple times a day to see if there is anything upsetting my applecart. Then there’s the issue of, “I bought this business and I want to stay on top of it, but I can’t check all my businesses every day – I’ll never have time to find new ones!”
So, I put my web designer to the test. The result? Sit back, put your feet up, and let your companies come to you.
The EDGAR Database: Watching Warren
2/21/2008 | Joe Ponzio | 6 Comments
I want to invest like Warren Buffett. Who doesn’t? To understand how he invests, I have purchased and read every book ever written on the man. A good starting point. The problem is that they all talk about the same few investments (e.g., Coca-Cola, American Express, GEICO). The no-brainer type investments. What else has he dabbled in?
See for yourself with the EDGAR database.
The EDGAR Database: A Primer
2/19/2008 | Joe Ponzio | 10 Comments | about: HD / MSFT
For seven months now, I’ve been talking about “going straight to the source” to find information and financial statements to analyze companies. Websites like Morningstar are great starting points and usually have accurate financial information; still, nothing beats reading quarterly and annual reports, proxy statements, and contracts as they were filed with the US Securities and Exchange Commission.
Of course, those discussions were based on the premise that everyone is familiar with the EDGAR database. For those that are not, let me introduce you to EDGAR.
How Do I Screen For Investment Opportunities?
10/10/2007 | Joe Ponzio | 21 Comments
I’m a business owner so I know what it means to be cheap. Okay, that sounded bad; still, I like the philosophy of “why pay for what you can get for free.” In business, just as in your personal finances, cash is king-so you don’t want to blow it unnecessarily.
There are three rational ways to value a business: break-up value, ongoing enterprise (F Wall Street) value, and buy-and-resell (Pabrai or Williams) value. If you can buy at a discount to any of those three valuations, you’ll be on your way. Let’s find some opportunities.
How To Find Companies Worth Analyzing
9/13/2007 | Joe Ponzio | 15 Comments | about: RATE
Analyzing companies is fairly straightforward. Finding companies to analyze is a different ballgame. In the U.S. alone, there are more than 10,000 publicly traded companies. With the power of the internet, we can now invest worldwide-bringing the number of available investment options to staggering proportions.
Let’s narrow it down a bit.
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How To Find A Stock With A Moat
8/3/2007 | Joe Ponzio | 13 Comments
Moat-one of the most important concepts in value investing. Every company has a value; but, the companies with big moats are generally less sensitive to outside forces which means you can invest with more confidence and comfort.
There are a million different types of moats. Some are economic; some are brand; some are position. Some are right in front of our faces; some require a bit of digging.
