So, you’re sold on using arbitrage to enhance your portfolio. In fact, you’ve always known that arbitrage can offer virtually risk-free profits; still, it can be somewhat scary to jump in with both feet. Rather than getting into the theoretical aspects of arbitrage, let’s take a look at some real…
If you’ve read Mohnish Pabrai’s The Dhandho Investor, you”ll likely recall a chapter entitled “Use Arbitrage!” If you”ve been following F Wall Street for a while, you”ll remember (and possibly have made money on) Use Arbitrage! The Tribune Company Example. Why do we say you should use arbitrage? In fact,…
There is a school of thought that says that the value of a business is entirely in its future cash flows and that all assets are tools that provide that cash flow. In essence, many people believe that assets and equity should be ignored entirely. Let’s look at it from…
This post is totally out of sync with my 1950s & 1960s Buffett discourse; however, Night ran into a problem that needs fairly quick solving. His sister gave him a sum of money to begin investing and, after explaining how the markets work, that price follows value, etc., he purchased…
If you recall from an earlier post, I showed a quick potential profit from Sharper Image – in that case, a few-day return of more than 40% because the stock was trading so far below its break-up value. As time marches on and the ability to generate cash seems a…
Welcome to 2008 all. I am going to spend the next day responding to all of the comments from the past two weeks. Let’s get to the heart of the matter: What is going to happen in 2008? It is a question I have been hearing for the past three…
As you can imagine, I am doing very little this week-hence the lack of posts. I hope everyone had a wonderful holiday! (I did) We ended the year on a strong note with the Tribune play. Some visitors have asked for more clarification as to how I analyzed the deal…
At $33.67, there is almost no upside and big potential downside if the deal falls apart last second. Just wanted to let you know that I sold TRB. Remember Buffett’s rule: Don’t lose money. There is very little risk left, but the few pennies on the upside do not justify…
The retail sector has been getting crushed lately. Though that breeds panic in most, it presents wonderful buying opportunities for long-term investors. Let me preface with this: I have heard it grouped in the same conversation with sub-prime loans. Are we really to believe that people will stop shopping? Can…
The markets have done some crazy things the past few days weeks months years. In fact, it is enough to make one’s stomach turn. That is, of course, until you remember the key to owning stocks: There is a business under there – and that is what drives the long…