Old School Value Nugget Fest (Dec 19th Edition)

As we head into the holidays, this will be the last nugget fest of the year.

I hope you get to enjoy some time off for family and reflection. I know I will!



Introduction to the Essays of Warren Buffett: Lessons for Corporate America by Lawrence A. Cunningham [SSRN]

This is Professor Cunningham’s Introduction to his book on Buffett’s shareholder letters. If you haven’t read the book, or even if you have, the introduction is a good read (or re-read), as it’s largely his synthesis of all those letters.

Howard Marks: “I don’t see that we’re in a bubble.” [CNBC]

A 6-minute interview that covers impeachment, the 2020 election, the market and cycle, and more.

Pat Dorsey On The Value Of Moats At The Punch Card Value Investing Conference – ValueWalk Premium

A refresher on Pat Dorsey’s view of how moats lead to pricing power, and how moats are often inefficiently priced due to the qualitative analysis needed to assess them.

Markets & Investing

Savvy investor awards 2019 [PDF]

The Savvy Investor Awards celebrates the best asset management thought leadership content from around the world. This is the PDF collection of the best ideas, papers and articles in the world of investing this year. A lot of the best whitepapers I’ve read this year came from Savvy Investor, but I’m still working my way through all these winners.

How You Can Get Big Gains That Wall Street Can’t [Zweig, WSJ]

If you needed more reason to spend time on small and micro caps: “The best-performing stock of the past 30 years isn’t Warren Buffett’s Berkshire Hathaway Inc., Microsoft Corp. or Apple Inc. It’s little-known Jack Henry & Associates Inc., which provides technology to banks and other financial firms from its headquarters in Monett, Mo. (population 8,873).”


Geoff Gannon discusses the following among others:

  • Why EV/EBITDA Is the Worst Price Ratio Except For All the Others
  • Which Ratio You Use Matters Most When It Disagrees With the P/E Ratio
  • Don’t Assume Accountants See Amortization the Way You Do

What he’s driving at here is that all of us have different valuation methods that we overuse. The reality is that every ratio misses something. EV/EBITDA may be one of the best, but be aware of its shortcomings.

The Negative Value Anomaly and a Case for Active Management [PDF]

A nice follow-on to the post on our blog last week about Negative Equity, as this highlights how negative equity companies outperform.

Pick Winning Stocks and Fatten Your Portfolio