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Analysing Serial Acquirers

Quite some time ago I looked at John Wiley & Sons (JWA) and saw that it was a serial acquirer. Difficulties in Analysing Serial Acquirers It can be difficult to value a serial acquirer because of the unpredictability of the financials moving forward, it is hard to predict what kind of future acquisitions would be … Continue reading

Theoretical Valuation Methodologies (FCFF, FCFE, CCF, and APV)

4 major theoretical valuation methodologies: Discounting Free Cash Flow to the Firm (FCFF) at the Weighted Average Cost of Capital (WACC) Adjusts for the tax benefit of debt from the cash flow numerator (i.e. FCFF should be calculated as though the firm is all-equity financed) because it will be handled by a smaller WACC denominator (due to … Continue reading

Symbiotic Relationship Between Analysts and Hedge Funds

There is a study at the BNP Paribas Hedge Fund Centre at the Singapore Management University with an interesting conclusion. Source: here. Paper: here. The abstract captures it succinctly: We find that analysts are more likely to issue favorable recommendations for stocks predominantly owned hedge funds. Moreover, these optimistic recommendations translate into poorer stock performance over … Continue reading

Mechanics of a Short Sale

There is a pretty good presentation at Business Insider on the mechanics of a short sale. Link here. This is the first writeup I have come across on the mechanics of a trade that goes to a greater level of detail. I have summarised the key points, re-phrased and re-organised it below for easier reading. … Continue reading

Book Review of Credit Risk Management

Book review of Credit Risk Management by Andrew Fight. This is an ok book that gives an introduction to credit risk for specific loans, and not about quantitative credit risk measurement or credit risk portfolio management. A great thing about the book is a list of questions to ask / answer when making loans, so … Continue reading

Various Countries’ Responses to a Depreciating Dollar

With the U.S. dollar depreciating, thought it would be interesting to capture each country’s reaction and reasons. Maintaining the peg (i.e. depreciating their own currencies) China Maintaining their peg. Cutting their holdings of U.S. dollars, and increasing their Euro and Yen reserves. Fighting to prevent appreciation of their currency and losing Brazil Imposed a 6% … Continue reading

Book Review on The Dhandho Investor

The Dhandho Investor is a book written by a famous value investor, Mohnish Pabrai. He has another book on investing titled “Mosaic” but for some reason the book is pretty expensive. Some people have pieced together information on chapters of Mosaic that are on the web (see here). In Dhandho Investor, Mohnish highlights the typical … Continue reading

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