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Howard Ward’s Valuation Methodology (Gabelli Funds)

The points here are summarised from an interview with Howard Ward (Gabelli Funds) conducted by Kirk Kazanjian in his book Wizards of Wall Street. Without question, 1992 and 1993 both were difficult years for you [Aside: drug stocks hammered due to health-care spending concerns + threat of federal health-care and drug-price regulation when the Clintons … Continue reading

Robert Torray’s Investment Approach (Robert E. Torray & Co.)

The points here are summarised from an interview with Bob Torray (Robert E. Torray & Co.) conducted by Kirk Kazanjian in his book Wizards of Wall Street. What have you learned over the years? How has your investment approach matured? It is a tough way to make a living by investing in obscure companies, special … Continue reading

Frederick (Fritz) Reynold’s Valuation Methodology (Reynolds Funds)

The points here are summarised from an interview with Fritz Reynolds (Reynolds Funds) conducted by Kirk Kazanjian in his book Wizards of Wall Street. Look for companies with above-average growth characteristics, strong unit growth (>= 13%), are well managed, and enjoy good pricing power. Often that might be the number one or two company in … Continue reading

Bill Miller’s Valuation Methodology (Legg Mason)

The points here are summarised from an interview with Bill Miller (Legg Mason) conducted by Kirk Kazanjian in his book Wizards of Wall Street. How do you figure out what a company is worth? We use what we call a multifactor valuation methodology, i.e. we look at the value of the business every possible way … Continue reading

Trading Note #9: Buying a Battered Stock on Dividend Announcement

CSE is a stock that is beaten down in this mortgage crisis. Even though management affirmed that dividends will be paid as promised earlier, there are still shorts who believe that the dividend would not be paid (which was what happened in many other mortgage companies even though their managements also proclaimed great news before … Continue reading

Trading Note #8: Betting on FOMC Decisions

Well, I made a costly mistake this week: I betted that the Fed would not cut rates on 18 Sep 07. Apparantly, the futures market had a 100% expectation of a 25 basis point cut, and many news articles were clamoring for a 50 basis point cut. The reason that the market gave was that … Continue reading

Effects of the Liquidity Crunch on Financing by Mortgage Companies

I was doing a very quick compilation of the effects of the liquidity crunch on the financing of some of the mortgage companies that I’m looking at. To set the background, the average interest rate for traditional 30-year fixed-rate mortgages is 6.25%, and the average interest rate for one-year adjustable rate mortgages is 6.34% (from … Continue reading

Stable Growth Rate for DCF Terminal Value

Came across this web page by Damodaran which highlighted some good points on the stable growth rate (link here): The stable growth rate cannot be greater than the overall growth rate of the economy, since if a firm grows forever at a rate higher than the growth rate of the economy, it will be bigger … Continue reading

Book Review: Rocking Wall St. by Gary Marks

Rating: OK Background: Came across this book by Gary Marks. Picked this up because I saw that the Foreward was written by John Mauldin, and I like the weekly newsletters that John Mauldin puts out. Key points: The nice thing about this book is that it puts out its main point very early on =) … Continue reading

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