Wednesday, October 9, 2013

read "the little book that still beats the markets" - joel g

the main idea is that buying a good business at bargain prices is good investing. How to implement this idea? buy businesses with high return on capital at times/prices when earnings yield is high or in other words, PE ratio is low. Thats the main idea here. For folks who don't want to screen for such, he has a website magicformulainvesting.com where such a screen is peridically run and lists maintained. From the list, he recommends taking off financials and utilities and companies with PE lower than 5. neat little book.

read "the warren buffet way" - Robert Hagstrom

read the book, came away with basic idea that one should invest only after studying the business. read their financial reports and get to understand their numbers and future prospects. Then if you like it all, then (this is my contrib here) set up alerts for the price you will want to pay and move onto studying other businesses.
When asked that there are over 3500 businesses in america and how to even start studying them, he responded saying 'start with As'.

Thursday, August 1, 2013

reading "core concepts of financial analysis - a user approach" - gary giroux

I am about 35% through this book and I must say I like it very much. Its written in a very coherent and clear manner. The underlying example of analysis of 3 automakers, hotels and chemical companies, carries through the entire book and that makes it a winner in my opinion. As we go through understanding the industry and corporate overview concepts, we read through these companies industry/corporate details. Then we went through balance sheets/income statements/cash flow/statement of equity concepts, again looking at these 3 industries and companies financial statements. This continuity in terms of staying with these specific companies financials really really helps.
I would like to finish this book and repeat the analysis - chapter by chapter - on latest annual reports 2012/13.

Thursday, July 25, 2013

read "Comparing and Analyzing Financial Statements to Make an. Investment Decision: Case Study of Automotive Industry" - raju sharma

this is a thesis report about 100 pages long done by a student named Raju Sharma. He studies 4 automakers - Ford, General Motors, Nissan and Toyota - he dives deep into their financial numbers from the 3 financial statements for 2008-2011 and presents comparisions of various items on the balance sheet, income statement and cash flow statements. There wasn't any discussion of qualitative stuff from the financial statements. There also wasn't any conclusion in terms of which of the 4 offered the best risk-reward type scenario for coming years. But overall a good attempt.
After reading this thesis report, I had a idea of going in and doing a similar report upon studying financials from 2012-2013 (last 2 years basically) on the same set of those 4 auto-makers, also report on qualitative stuff I pick up from the financial statements, and comment on the valuation and stock performance too. 

read "guide to understanding financial statements" - costales

part 1 of the book was standard introductory material on balance sheet, income statement, cash flow statement and statement of net worth. But part 2 is where the book really shone - it was about 7-8 case studies of individual companies financial statements, eg a gardening supplies company, a leather manufacturer, a restaurant, etc -- the author reviewed the 4 statements and then provided his interpretations of the statements and conclusions. I enjoyed the second part of this book so much that I went online and started searching for more case studies of financial statements. 

Friday, July 19, 2013

read "use the news" - maria bartiromo

I must say this one was a pleasant surprise. Somehow, I did not expect much from this book but got plenty good ideas from it. Its filled with real life examples of what news stories affected stocks/sectors in the past decade or so. She really encourages you to have a framework in place, a calender of events in place and knowing what all rocks and nooks you will be looking under, again and again, periodically. Only by approaching the market and business world from such a framework, knowing what all events, things, companies, sectors, etc you are tracking and being selective about what you are going to track and anticipate, will you have a chance at being successful. Otherwise its a jungle of information out there and you can easily be overwhelmed and give up. Select your spots and track/anticipate them with a calender/plan in place -- is the key message I am taking away from this book. 

I am going to read this one again in the future.
I bought my own personal copy at Half Price bookstore, very very glad I bought it.