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2:13 pm
December 18, 2011
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ankitgu
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gtrockefellar said:
While everyone is sharing, I figure I'd share too.
My background is in Real Estate. I graduated with an Urban Planning degree, I've been a commercial real estate broker specializing in hotels and my family invests in New York real estate. I currently have some small investments of my own in mortgage notes which I've done well on.
One of my buddies was working at a broker-dealer which dealt with some of the bigger names in the industry and decided to start his own firm. I got curious and asked to tag along. I started picking up a few books on value investing and I've been hooked ever since. My portfolio has been up over 80% for the year.
What kind of returns do you see on your own mortgage notes and why would the borrower want to have it placed through a broker rather than just going to a standard bank?
Nice job on the portfolio's return – what kind of investments were those and care to share your thesis on any that worked out well?
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2:10 pm
December 18, 2011
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ankitgu
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Jae Jun said:
Nokia is an example. Management may be good, but the business is terrible. In the end, majority of companies can run by itself independent of who is in charge.
This is a really really good insight that I hadn't thought about. Buffett has described it by saying he likes a company that could be run by a "ham sandwich" because he knows that sooner or later, an idiot may become CEO and hold the keys to the entire company.
He even says that good management will produce more at a great company than amazing management at a horrible business, and this Nokia example makes sense to me now.
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10:34 pm
December 8, 2011
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eclecticvalue
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Hey Graeme,
I may be able to help you out. Email me at eclecticvalue@gmail.com and I can send you info. I am a real person, I just dont post on these forums as much. I randomly came across your post and I thought I could do something to help. Usually you can see my comments in various value blogs.
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6:01 pm
December 2, 2011
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Jae Jun
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excellent stuff. Would like to be where you are with your portfolio this year, but I'll try next year.
So do you work with your friend at the firm or are you just learning alongside him?
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7:44 pm
December 1, 2011
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gtrockefellar
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Post edited 11:46 am – December 1, 2011 by gtrockefellar
While everyone is sharing, I figure I'd share too.
My background is in Real Estate. I graduated with an Urban Planning degree, I've been a commercial real estate broker specializing in hotels and my family invests in New York real estate. I currently have some small investments of my own in mortgage notes which I've done well on.
One of my buddies was working at a broker-dealer which dealt with some of the bigger names in the industry and decided to start his own firm. I got curious and asked to tag along. I started picking up a few books on value investing and I've been hooked ever since. My portfolio has been up over 80% for the year.
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5:44 am
October 8, 2011
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Graeme
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| Member | posts 180 |
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Thought I'd ramp up this thread seeing as it's been dead for a while.
I have a Masters degree in Theology and Literature and I worked for the University of Toronto for a few years before getting married and taking a year long honeymoon in the Netherlands. While in Holland my wife and I worked as house parents at a private school where I also taught.
We're moving to the US in about a month or so (staying with her folks in Dallas) while we look for work either in Austin, NYC or Boston.
How does a Literature and Theology nerd get involved in value investing? Well, for lots of reasons, not the least of them being an enjoyment of research, trusting your own conclusions, trying to get to the central kernel of everything but also having the humility to say, "yeah, there's no figuring this one out." I'd love to write an article about it for Relevant Magazine or something some time.
But yes, this does mean that when I'm lost reading Tomas Aquinas or some other old master I am daydreaming about setting up a stand-alone mone management firm, if only so I can make a salary on dividends and then read all day. (I'm convinced the best money managers aren't just well read in finance and accounting, but in literature, history, psychology and the queen of the sciences–theology.)
Speaking of which, anyone have a couple of million they want invested?
(And all joking aside, if you know of any interesting opportunities, hit me up.)
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6:02 pm
June 1, 2011
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Jae Jun
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ankitgu said:
I just graduated from college after studying accounting and business management and value investing is what I do in my own time. I'll be in the insurance industry with finance/accounting rotational positions starting in August.
What I like about value investing is that you're on a hunt for value. I think there are many instances where you can gather that numerically and by researching, but my focus may end up being a little different. Ideally, I'd like to be buying stocks in businesses that I can hold onto forever. Why though?
I know that in finance we boil things down into numerical ratios, so earning $1 on $12 of invested capital would be a 12.5% ROIC. That 12.5% was created by the people there – assets alone won't generate anything on their own, because you have to have good people behind it. I need to learn to find an edge by understanding this side of it more, and a lot of that will be impacted by the compensation plan for management.
I've also thought about pricing a lot. If a company can raises prices, all else held constant, then our ability to increase profitability is *huge*. Imagine: $10 sale price, $8 COGS, $1 SG&A, no taxes/interest/etc., and you earn $1. If you can get the customer to pay $11, an increase of $1, you profitability jumps 100%. A 10% change in revenue resulted in a 100% change in profitability.
I almost want to buy businesses that have a lot of power, but choose to not raise prices a lot, because it could potentially invite competition. This would be a company without too much competition that provides a lot of value to their customers and won't be losing them at any time. A 10% decrease in revenue in that example would wipe out their profitability and that's why I want to avoid a situation where customers stop using a business.
Finally, I want to pay a price that is reasonable and *assumes* a depression-like environment to be occuring from time to time. I don't want to pay a price that assumes perfect operations indefinitely. For every period of 10 years, I want to assume that 1 or 2 will be bad for some reason or another whether it's the macro environment, government regulations, etc.
I think it's interesting that you can have cheap securities on crappy businesses or even expensive securities for amazing businesses. Sometimes, I feel it's easier to make money on the former, because it's cheap and value investors are very price conscious. At some price, a money losing business is worth it, because you could liquidate it and get the operations for free. Finding these "amazing" businesses is what I struggle with that are at acceptable prices, but I think I might have an idea of how to identify these and will post a write-up on why I think Coca Cola's earnings will significantly ramp up in the next 10 years :-)
Hey Ankit,
Great to see you back. Congrats on the graduation!
Just a couple of points I wanted to add.
Regardless of which industry, there will always face competitors and challengers. Smart people/competitors will see opportunity to either enter a market or expand. But in a niche, you will be fairly well protected even if you post 40% ROIC as the big competitors do not reap enough benefits and the new entrants have to fight for a niche that the company is dominating.
Lately, I've been stressing less importance on management and people depending on the business.
For a junior miner, it matters alot. For a company like Nucor, yes the management did a great job of turning what is a commodity business into an awesome company. However, companies like Nucor are very rare.
Nokia is an example. Management may be good, but the business is terrible. In the end, majority of companies can run by itself independent of who is in charge.
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5:54 pm
June 1, 2011
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Jae Jun
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Ryan B said:
Jae,
Where did you wife get her Masters in accounting? I am thinking about completing the same degree.
She did it through devry online classes. You cant go wrong with an accounting degree as an investor.
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3:27 pm
May 27, 2011
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ankitgu
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| Member | posts 49 |
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I just graduated from college after studying accounting and business management and value investing is what I do in my own time. I'll be in the insurance industry with finance/accounting rotational positions starting in August.
What I like about value investing is that you're on a hunt for value. I think there are many instances where you can gather that numerically and by researching, but my focus may end up being a little different. Ideally, I'd like to be buying stocks in businesses that I can hold onto forever. Why though?
I know that in finance we boil things down into numerical ratios, so earning $1 on $12 of invested capital would be a 12.5% ROIC. That 12.5% was created by the people there – assets alone won't generate anything on their own, because you have to have good people behind it. I need to learn to find an edge by understanding this side of it more, and a lot of that will be impacted by the compensation plan for management.
I've also thought about pricing a lot. If a company can raises prices, all else held constant, then our ability to increase profitability is *huge*. Imagine: $10 sale price, $8 COGS, $1 SG&A, no taxes/interest/etc., and you earn $1. If you can get the customer to pay $11, an increase of $1, you profitability jumps 100%. A 10% change in revenue resulted in a 100% change in profitability.
I almost want to buy businesses that have a lot of power, but choose to not raise prices a lot, because it could potentially invite competition. This would be a company without too much competition that provides a lot of value to their customers and won't be losing them at any time. A 10% decrease in revenue in that example would wipe out their profitability and that's why I want to avoid a situation where customers stop using a business.
Finally, I want to pay a price that is reasonable and *assumes* a depression-like environment to be occuring from time to time. I don't want to pay a price that assumes perfect operations indefinitely. For every period of 10 years, I want to assume that 1 or 2 will be bad for some reason or another whether it's the macro environment, government regulations, etc.
I think it's interesting that you can have cheap securities on crappy businesses or even expensive securities for amazing businesses. Sometimes, I feel it's easier to make money on the former, because it's cheap and value investors are very price conscious. At some price, a money losing business is worth it, because you could liquidate it and get the operations for free. Finding these "amazing" businesses is what I struggle with that are at acceptable prices, but I think I might have an idea of how to identify these and will post a write-up on why I think Coca Cola's earnings will significantly ramp up in the next 10 years :-)
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3:30 pm
May 24, 2011
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Ryan B
| | Toronto | |
| Member | posts 21 |
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Jae,
Where did you wife get her Masters in accounting? I am thinking about completing the same degree.
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1:22 pm
May 14, 2011
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Steven_B
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I drive for UPS. The job keeps me in shape physically but after over 25yrs theres not a whole lot of mental stimulation and thats were the markets come into play.
Sometimes I can get an early idea of a company or the economy by just watching the what and how much I deliver, but sometimes it can also give a local only reading.
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11:42 pm
January 11, 2011
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Clest
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| Member | posts 3 |
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All the internet related jobs never are full time . Your field should be in which you are good at , and your experience should be over the net for every one to see and to have benefits from it .
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11:55 pm
November 19, 2010
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Jae Jun
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I'm sure you've read my story, so I won't go into the details here.
But I'm an engineer for a Fortune 500 electronics company working with mobile phones.
I do investing on the side with my 401K.
If you are tax accountant, you have a big advantage. Understanding the tax laws and how it applies to companies is a big plus.
From my experiences with other people, it seems like all serious value investors want to do it full time.
I believe it's because it requires intellect, it's fun to learn and it's rewarding when your research pays off.
Since you are an accountant, my wife is trying to get into the industry as a staff accountant. She recently graduated her masters in accounting but without any experience, no one is willing to hire in this economy.
Do you happen to have any tips or leads to make things easier?
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9:36 am
November 19, 2010
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Shonen
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| Member | posts 15 |
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I am always interested in learning about peoples background and thought I would pose the question here as well. What do you do as a full time job? Are you value investing on the side?
To start us off, I'm a tax accountant working at a big 4 accounting firm. I have always been fascinated with value investing as it resonates with me. In addition to my daytime job, I invest on the side with the mindset of saving for retirement. While investing might be considered a "hobby", I have thoughts of trying to turn it into a full time thing. Anyone else get that feeling?
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