Old School Curated Links and News (April 18th Edition)


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I can’t help but get excited when looking up cheap stocks.
With net nets, you associate it with Graham, don’t forget that Buffett was a prized student of Graham’s.

So it’s actually interesting to see a real example of Buffett’s Net Net Working Capital calculation to value Dempster Mill in 1961.
(see image below of how Buffett did it)
 Image
Rather than using the conventional NCAV method of current liabilities minus total liabilities, Buffett made adjustments to the balance sheet based on a quick fire sale valuation.

He discounted accounts receivables by 85%, inventory by 60% and prepaid expenses by 25%. By default, I use 75%, 50% and 0% respectively. 
There’s much more to it than just a quick calculation, but cheap stocks like net nets are easier to analyze than the complex ideas where there are many scenarios to consider.

Wanted to share that with you before you dive into this weeks Old School curated links.

Old School Value Articles You May Have Missed

What We’re Reading in the Media

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