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Book: Sources of Value by Simon Woolley (BP) Review: Interesting topic. This aims to break down NPV and attribute the components into identifiable advantages of a company over its competitors. Most of the time when you identify sustainable competitive advantage for a company, its terminates as a qualitative judgment. This book takes it one step … Continue reading
Book: Valuation for Mergers, Buyouts and Restructuring, by Enrique R. Arzac (Columbia University) Review: Excellent book on valuation theory! Highly recommended! Key Points: Unlevered net income = net income + (1 – tax rate)*(interest expense – interest income) Unlevered net income + change in deferred taxes = net operating profit after tax (NOPAT) NOPAT + … Continue reading
Recently I had a conversation with a friend who is working as a forex trader in a leading investment bank. He was asking about when I would sell a position. The typical scenarios in which a value investor would sell a position are: It is overvalued. Mistakes were made in the analysis which led to … Continue reading
Journeys of a Bumbling Trader 