Sunday, November 23, 2008

Jeremy Grantham on WealthTrack

Jeremy Grantham was a guest on this week's Consuelo Mack WealthTrack for an exclusive interview and his television debut: Video - 11/21/08
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The complete interview is available HERE.

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Related previous posts:
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GMO: Quarterly Letter – Jeremy Grantham
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GMO - Jeremy Grantham: Q2 Letter
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Thursday, November 20, 2008

Berkshire Hathaway Credit Risk, Index Puts Are Overblown Worries - by Whitney Tilson

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Fairfax Removes Hedges on Equity Portfolio Investments

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"During our third quarter conference call on October 31, 2008, I disclosed that we had reduced our equity portfolio hedging from 100% to 65% of our equity investment portfolio and of course that at some point we may remove the hedge on our equity portfolio. That day has come," said Prem Watsa, Chairman and Chief Executive Officer. "Given the unprecedented decline of the equity markets during the past several months, we felt it was prudent to promptly inform our shareholders that we closed out our equity index total return swaps this week and effectively eliminated our equity portfolio hedge. While we believe the recession may be long and deep, we also believe that stock prices may have already discounted the worst of the economic decline. As value investors, we are finding an incredible number of investment opportunities across the world. That said, in the short term we recognize that stock markets can continue to fall significantly."
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Related previous posts:
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Wednesday, November 19, 2008

David Winters on WealthTrack

David Winters was a guest on last week's Consuelo Mack WealthTrack: Video - 11/14/08
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This week's show is going to feature Jeremy Grantham.
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The Other Reason for Warren Buffett's Success - by Jason Zweig

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Monday, November 17, 2008

The End - by Michael Lewis

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Thursday, November 13, 2008

Learning from Documentaries

If you are a fan of documentaries and looking to learn something new, check out Kevin Kelly's TRUE FILMS 3.0.
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Monday, November 10, 2008

Bruce Greenwald on Value Investing

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The first thing is that for value investors, you are not going to try to forecast the future. Most value investors would say if it's anything like credit crunches we've seen in the past, it will be gone in a year. That's what the betting has to be. It's a short-term problem and not something you focus on. It has, however created opportunities in debt markets. Banks are dumping senior secured debt, selling it on the market for 50-60-70 cents on the dollar. The implied returns are north of 15 percent, and because you're senior to everybody else in the event of bankruptcy, you're likely to get paid. That's where opportunities have been created by the credit crunch. If you listen to Buffet, it's where he's been investing up until now. Those opportunities are still there, but my guess is they're going to go a way.
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Related Books:
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Wednesday, November 5, 2008

Credit Analysis: Sanjay Bakshi - Lecture 12

Link to Professor Bakshi's 12th Lecture. He goes over an important lesson and filter from Ben Graham:
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Graham’s Version of Debt-equity ratio:
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Market Value of Enterprise/Debt
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Why not use the conventional Debt/Equity ratio?
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“The market value of stock is generally recognized as a
better index of the fair going concern value of a
business rather than balance sheet figures.”
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The Graham Standard:
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“Minimum stock equity at market prices for industrial bonds
should be at least 75% of total debt. This test must be passed
both currently and over the average of last five years.”
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