August 27, 2007 by Joe Ponzio

The two most important factors that go into buying companies are moat and margin of safety. You could, and likely will, be wrong on your future owner earning projections. You may be overly optimistic or overly cautious and end up buying too soon or passing on a great opportunity. Your…

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August 24, 2007 by Joe Ponzio

Interestingly enough, quick asked a question that was going to be the topic for today. When does the discounted cash flow model work? When does it not? Is this a method that can be used for all businesses at all times? The short answer is: The discounted cash flow method…

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August 23, 2007 by Joe Ponzio

We’re in a tough spot-financial services companies, particularly banks, are getting hammered right now because of the sub-prime mess. When a stock gets hammered, the underlying company may become very attractive at the new price. Unfortunately, Morningstar doesn’t give us the free cash flow data for these companies, so we…

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August 22, 2007 by Joe Ponzio

I believe that 401k plans, in theory, are phenomenal. I also believe that Wall Street F-ed them up so bad and use them as tiny, recurring profit centers to ignore the “little guy” and sell their mutual funds. Oh, they’ll call you when you’re ready to roll over your old…

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August 21, 2007 by Joe Ponzio

401k plans seemed like a good idea at the time. Individualized retirement plans. Personalized portfolios to replace the stogy old pension. Real growth for young, aggressive investors; safety for senior employees facing retirement. Many years ago, there was no 401k-it simply didn’t exist. Companies had pensions-giant pools of money conservatively…

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August 20, 2007 by Joe Ponzio

Worried about the markets? Are things a little too crazy or volatile right now? Guess what: You probably hold too many investments or you hold investments for the wrong reasons. If you can’t get excited when the markets drop suddenly, you should check your portfolio and strategy to find (and…

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August 17, 2007 by Joe Ponzio

When valuing a business, you discount the expected future cash back to today to get an idea of what the company is worth. Of course, predicting future cash flows is part art, part science. Piled on top of that is the fact that the discount rate you use greatly affects…

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August 16, 2007 by Joe Ponzio

I’ve been asked a number of times to analyze Wal-Mart. My goal here is not to offer stock tips; rather, I want you to be able to do it yourself. Still, I looked at (and bought) Wal-Mart for myself, so here it is: To preface, investors that comb Morningstar to…

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August 15, 2007 by Joe Ponzio

Every three months, Buffett and Berkshire have to report their holdings to the SEC. Good news for us because we can see them for free. Click here for the report. Let’s see what Buffett is buying, selling, and arbitraging.

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August 14, 2007 by Joe Ponzio

In 1934, David Dodd and Benjamin Graham (Buffett’s teacher) wrote what would later be known as the foundation for value investing. Security Analysis knocked Wall Street for focusing on reported earnings and pointed the finger at the brokerages for dismissing their fiduciary responsibilities to clients, ultimately causing the Crash of…

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