Soumen said, I would read them in the following order:
1. Buffet on the Market 1999
2. Buffet on the Market 2001
3. Buffet on the US Dollar 2003
4. Forbes on Buffett 1969
5. Forbes on Buffett 1974
6. How Buffett spends his day
Thank you for those articles from Soumen. You can get those files from
http://groups.google.com/group/value-investment-club/files
Saturday, March 29, 2008
The Buyer's Briefing: Basics of Acquiring a Biz
This is from our Greg.
You can get this file from
http://groups.google.com/group/value-investment-club/files
You can get this file from
http://groups.google.com/group/value-investment-club/files
Biz Appraisal Sample + Eval Sheet
From Greg, posted by Josh:
One is a sample business appraisal from my favorite business appraisal company, BEAR, Inc. www.bearval.com BEAR works with accountants and attorneys who work directly with the client to gather information and collaborate on the production of the appraisal. BEAR also does many appraisals directly with clients.
http://groups.google.com/group/value-investment-club/files
One is a sample business appraisal from my favorite business appraisal company, BEAR, Inc. www.bearval.com BEAR works with accountants and attorneys who work directly with the client to gather information and collaborate on the production of the appraisal. BEAR also does many appraisals directly with clients.
The other report is a report I created to help small business sellers understand the value of their businesses – this one is really more like a Comparative Market Analysis (CMA) that a Realtor would give to a homeowner rather than a formal appraisal. I attached the unlocked Excel spreadsheet rather than a pdf of the final report so everyone could play with the spreadsheet if they want. It is not set up to be particularly user-friendly since I am the only one using it besides my marketing administrator. She can turn around and ask me a question if she gets stuck.
You can get those reports athttp://groups.google.com/group/value-investment-club/files
Meeting on 3/25
Dear club members,
We had another very good discussion on past Tuesday. Those who are on the "To" list attended the meeting. We also missed some of you who couldn't join us due to spring break vacation. Look forward to seeing all of us together to elevate to the next level through our bi-weekly meetings and BLOG communications.
Meeting Summary:
* A-has:
compounding ( Te)
power of compounding through tax saving, consumer monopoly, predictable earning ( Josh)
how much biz can make money (Greg)
* New Ideas:
From Greg,
Here’s an idea for fun – since we are calling our group Value Investing Club why don’t we use the acronym VIC and come up with a stylized logo? Maybe even a cartoon character called “Vic” who looks like Warren Buffet.
Can all memebers provide your inputs on our next meeting?
Questions:
- where can we find cash-flow investment? ( Hubert)
- How to find a strong "compounding" company? ( Te)
- How can I differentiate consumer monopoly vs commodity types of biz? ( Jeff)
* Action:
- Share Buffets articles. Soumen sent me 6 excellent articles about Buffet after the meetin. Thank you Soumen for your contribution to the club!!
- Sharing of biz evaluation tools: Greg has provided three tools: basics of buying a biz, a sample of biz appraisal, eval spreadsheet. Thank you Greg for your contribution.
For more details. Please check the BLOG. You will also see a google group invitation to get those files.
Announcement: Next Meeting
Date: 4/8, Tuesday
Time: 12pm
Place: 1630 Oakland Rd, A105, San Jose CA
Home work:
1. Please read ch 11 to ch 15
2. Be available to share your A-has, new ideas or actions which you will take.
3. Bring the deals you like to discuss to the meeting.
Cheers,
Josh
We had another very good discussion on past Tuesday. Those who are on the "To" list attended the meeting. We also missed some of you who couldn't join us due to spring break vacation. Look forward to seeing all of us together to elevate to the next level through our bi-weekly meetings and BLOG communications.
Meeting Summary:
* A-has:
compounding ( Te)
power of compounding through tax saving, consumer monopoly, predictable earning ( Josh)
how much biz can make money (Greg)
* New Ideas:
From Greg,
Here’s an idea for fun – since we are calling our group Value Investing Club why don’t we use the acronym VIC and come up with a stylized logo? Maybe even a cartoon character called “Vic” who looks like Warren Buffet.
Can all memebers provide your inputs on our next meeting?
Questions:
- where can we find cash-flow investment? ( Hubert)
- How to find a strong "compounding" company? ( Te)
- How can I differentiate consumer monopoly vs commodity types of biz? ( Jeff)
* Action:
- Share Buffets articles. Soumen sent me 6 excellent articles about Buffet after the meetin. Thank you Soumen for your contribution to the club!!
- Sharing of biz evaluation tools: Greg has provided three tools: basics of buying a biz, a sample of biz appraisal, eval spreadsheet. Thank you Greg for your contribution.
For more details. Please check the BLOG. You will also see a google group invitation to get those files.
Announcement: Next Meeting
Date: 4/8, Tuesday
Time: 12pm
Place: 1630 Oakland Rd, A105, San Jose CA
Home work:
1. Please read ch 11 to ch 15
2. Be available to share your A-has, new ideas or actions which you will take.
3. Bring the deals you like to discuss to the meeting.
Cheers,
Josh
Friday, March 21, 2008
Railrod Biz: Another Consumer Monopoly?
Burlington Northern Santa Fe Corporation (BNI), Up 13.96% Year to Date while S&P500 drops 10%
Warren Buffett keeps buying BNI over the past year. He bought BNI at the prices between $75 to $85. As of Jan., Berkshire owns more than 63 million shares, representing more than 18% of total shares outstanding.
Why railroad biz comes back? The chief reason that the railroads' long-term prospects look so good today is that they began upgrading their operations soon after the industry was largely deregulated in 1980.
It seems that BNI is/has/will be
1) consumer monopoly biz
2) increasing up trend in earning ( Net income increased 20% in 2 years)
3) Lots of debt ( 1.5 times revenue, 12 times net income) This item does not match the excellent biz criteria from the book.
4) Return on Equity 16% ( better than 12% )
5) Able to retain earning and make more money (productivity double since 15 years ago)
6) Not much needed to be spent to maintain its monopoly
7) Reinvest efficiently ( not yet study )
8) Can adjust the price based on inflation
9) Increased market value due to hard working from retained earning.
Questions:
A. can we use this list to examine our business?
B. Can you find another turn-around consumer monopoly biz? ( remember railroad biz used to need large amounts of capital, have tough unions, and stiff competition from the trucking business)
Thursday, March 13, 2008
You can make it to Critical mass with small busines
As a business broker for the last 22 years I have sold hundreds of businesses. My most successful small business client came into my office in 1994 to buy his first business. At that time he had a net worth of $75,000 consisting of $40,000 home equity and $35,000 cash. He bought a very troubled Denny's Restaurant and turned it around by hard work, cleaning, firing the thieves, hiring and training good people to staff the restaurant. He doubled sales in six months and tripled sales in a year. He had been working as a manager at Jack-In-The-Box for the previous 8 years.
CRITICAL MASS is a term coined by Bob Brinker, a hedge fund manager and talk show host you can hear on Saturdays and Sundays on KGO 810 and other ABC affiliates across the nation. Critical Mass is the status of having enough passive income from your investments that it totally supports your lifestyle including taxes and inflation. Bob Brinker also publishes an investment newsletter Bob Brinker's Marketimer which has provided me with valuable market information for the past several years. You can subscribe at http://www.bobbrinker.com/
My client reached Critical Mass after building his Denny's chain for several years. Today he owns 32 Denny's Restaurants and 6 Black Bear Diners in several states. He has built a great management team and has state of the art business systems. His revenues exceed $50 million and the pretax earnings are approximately 15% of revenues. He mainly works on business development now.
So you don't have to start the next Google to achieve financial independence!
CRITICAL MASS is a term coined by Bob Brinker, a hedge fund manager and talk show host you can hear on Saturdays and Sundays on KGO 810 and other ABC affiliates across the nation. Critical Mass is the status of having enough passive income from your investments that it totally supports your lifestyle including taxes and inflation. Bob Brinker also publishes an investment newsletter Bob Brinker's Marketimer which has provided me with valuable market information for the past several years. You can subscribe at http://www.bobbrinker.com/
My client reached Critical Mass after building his Denny's chain for several years. Today he owns 32 Denny's Restaurants and 6 Black Bear Diners in several states. He has built a great management team and has state of the art business systems. His revenues exceed $50 million and the pretax earnings are approximately 15% of revenues. He mainly works on business development now.
So you don't have to start the next Google to achieve financial independence!
Wednesday, March 12, 2008
Book 1: Buffettology
Buffettology
The book we've chosen to study from March to June is
Buffettology: The Previously Unexplained Techniques That Have Made Warren Buffett The Worlds (Paperback)
You can buy this book from local book stores or at amazon.com
http://www.amazon.com/Buffettology-Previously-Unexplained-Techniques-Buffett/dp/068484821X/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1203467850&sr=8-1
The book we've chosen to study from March to June is
Buffettology: The Previously Unexplained Techniques That Have Made Warren Buffett The Worlds (Paperback)
You can buy this book from local book stores or at amazon.com
http://www.amazon.com/Buffettol
Octagon of Value Investors
Octagon of Value Investor's Capabilities:
Liquidity, Analysis, Intuition, Charm(personality), Negotiation, Creativity, Valuation, Control.
If you are a stock market investor, you usually only have analysis and liquidity (money). Many times, your analysis is limited by what is on the public domain. Sometime, professionals such as fund managers can get more info than you and put you on a disadvantageous situation.
However, if you are buying a business, you can exercise other tributes such as negotiation, creativity and charm. You can hone more skills to achieve more control.
( shared by Edwin. very insightful.)
Liquidity, Analysis, Intuition, Charm(personality), Negotiation, Creativity, Valuation, Control.
If you are a stock market investor, you usually only have analysis and liquidity (money). Many times, your analysis is limited by what is on the public domain. Sometime, professionals such as fund managers can get more info than you and put you on a disadvantageous situation.
However, if you are buying a business, you can exercise other tributes such as negotiation, creativity and charm. You can hone more skills to achieve more control.
( shared by Edwin. very insightful.)
Meeting Format
Meeting Format:
At every meeting, we share
* A-has: surprising insights; things might not be open to you before; things open up for future possibilities. Sharing of your a-has will help you and others.
* New ideas: new vision and possibilities you can see now.
* Actions: actions to take so we can achieve our goals.
* Deal info: deals you like or deals you like the group to discuss
* Questions: asking question is one of most powerful ways to have breakthroughs.
At every meeting, we share
* A-has: surprising insights; things might not be open to you before; things open up for future possibilities. Sharing of your a-has will help you and others.
* New ideas: new vision and possibilities you can see now.
* Actions: actions to take so we can achieve our goals.
* Deal info: deals you like or deals you like the group to discuss
* Questions: asking question is one of most powerful ways to have breakthroughs.
Meeting on 3/11/2008
Dear all,
Thank you for joining us on the venture of mastering value investment in action. Your sharing and participation had made all of us a wonderful evening. People who are on the To list attended the meeting and people who are on the CC list were interested in joining but didn't get the chance to attend last night.
Below is the recordings of how we run the meeting, what we got and what will we do.
Meeting Format:
- At every meeting, we share
* A-has: surprising insights; things might not be open to you before; things open up for future possibilities. Sharing of your a-has will help you and others.
* New ideas: new vision and possibilities you can see now.
* Actions: actions to take so we can achieve our goals.
* Deal info: deals you like or deals you like the group to discuss
* Questions: asking question is one of most powerful ways to have breakthroughs.
Meeting Summary:
We together did many of the above last night. Highlights are
* A-has: Value of the business Vs value of the stock price ( Greg)
Focus on great business you love ( Cathy)
Intuition after many practices (Hubert)
What I will pay for a biz will depend on how much I can make. ( Josh)
* Octagon of Value Investor's Capabilities: Liquidity, Analysis, Intuition, Charm(personality), Negotiation, Creativity, Valuation, Control.
If you are a stock market investor, you usually only have analysis and liquidity (money). Many times, your analysis is limited by what is on the public domain. Sometime, professionals such as fund managers can get more info than you and put you on a disadvantageous situation.
However, if you are buying a business, you can exercise other tributes such as negotiation, creativity and charm. You can hone more skills to achieve more control.
( shared by Edwin. very insightful.)
* Action:
- start a BLOG.
- invite guest speakers
- come out with a deal with financials
Announcement:
- With votes from all attendees, we have decided our regular meeting will take place on every other Tuesday at noon from 12 to 1pm.
Please reserve your time on 3/25, 4/8, 4/22, 5/6, 5/20,....
- We will read 5 chapters per meeting. Please read chapter 6 to 10 by 3/25
- Club bylaw #1:
Confidentiality: All sharing from the group including people's name or business nature is for education purpose only and should not be discussed outside of the group.
Please let me know if I miss anything important. You can see my invitation to join our BLOG soon.
Cheers,
Josh Chen
Thank you for joining us on the venture of mastering value investment in action. Your sharing and participation had made all of us a wonderful evening. People who are on the To list attended the meeting and people who are on the CC list were interested in joining but didn't get the chance to attend last night.
Below is the recordings of how we run the meeting, what we got and what will we do.
Meeting Format:
- At every meeting, we share
* A-has: surprising insights; things might not be open to you before; things open up for future possibilities. Sharing of your a-has will help you and others.
* New ideas: new vision and possibilities you can see now.
* Actions: actions to take so we can achieve our goals.
* Deal info: deals you like or deals you like the group to discuss
* Questions: asking question is one of most powerful ways to have breakthroughs.
Meeting Summary:
We together did many of the above last night. Highlights are
* A-has: Value of the business Vs value of the stock price ( Greg)
Focus on great business you love ( Cathy)
Intuition after many practices (Hubert)
What I will pay for a biz will depend on how much I can make. ( Josh)
* Octagon of Value Investor's Capabilities: Liquidity, Analysis, Intuition, Charm(personality), Negotiation, Creativity, Valuation, Control.
If you are a stock market investor, you usually only have analysis and liquidity (money). Many times, your analysis is limited by what is on the public domain. Sometime, professionals such as fund managers can get more info than you and put you on a disadvantageous situation.
However, if you are buying a business, you can exercise other tributes such as negotiation, creativity and charm. You can hone more skills to achieve more control.
( shared by Edwin. very insightful.)
* Action:
- start a BLOG.
- invite guest speakers
- come out with a deal with financials
Announcement:
- With votes from all attendees, we have decided our regular meeting will take place on every other Tuesday at noon from 12 to 1pm.
Please reserve your time on 3/25, 4/8, 4/22, 5/6, 5/20,....
- We will read 5 chapters per meeting. Please read chapter 6 to 10 by 3/25
- Club bylaw #1:
Confidentiality: All sharing from the group including people's name or business nature is for education purpose only and should not be discussed outside of the group.
Please let me know if I miss anything important. You can see my invitation to join our BLOG soon.
Cheers,
Josh Chen
Tuesday, March 11, 2008
Home work #1
Home work before the first meeting
Dear Friends,
This is a friendly reminder for our first meeting on coming Tuesday. If you have not got the book from Amazon.com, you may want to go to library to borrow the book or go to Borders and read it. It is only 20 pages for the first 5 chapters, 5 mini chapters:)
Date: 3/11, Tuesday
Time: 6pm
Place: 1630 Oakland Rd, A105, San Jose CA
Home work:
1. Please read first 5 chapters; make connections to the investment deals you heard in the news or your own
2. Be available to share your A-has, new ideas or actions which you will take.
3. Bring your questions. One example,
Why Warren Buffet and Ross Wilbur ( another billionaire investor) are interested in bond insurance companies? What values do they see now? What action can we take to realize similar opportunities?
Cheers,
Josh
P.S. I'm working with St. John's Capital Group. Although we will borrow its place for our meetings, this club is my personal initiative to hone value investment skills with like-minded investors.
Dear Friends,
This is a friendly reminder for our first meeting on coming Tuesday. If you have not got the book from Amazon.com, you may want to go to library to borrow the book or go to Borders and read it. It is only 20 pages for the first 5 chapters, 5 mini chapters:)
Date: 3/11, Tuesday
Time: 6pm
Place: 1630 Oakland Rd, A105, San Jose CA
Home work:
1. Please read first 5 chapters; make connections to the investment deals you heard in the news or your own
2. Be available to share your A-has, new ideas or actions which you will take.
3. Bring your questions. One example,
Why Warren Buffet and Ross Wilbur ( another billionaire investor) are interested in bond insurance companies? What values do they see now? What action can we take to realize similar opportunities?
Cheers,
Josh
P.S. I'm working with St. John's Capital Group. Although we will borrow its place for our meetings, this club is my personal initiative to hone value investment skills with like-minded investors.
Club Roster
Dear all,
Thank you for your support for this initiative and the possibilities we can create together. We already have 13 people sign-up and maybe more to join. However, the meeting schedule has been tough to coordinate.
We have changed the first meeting to the following schedule. Please try your best to be there. ( we will also finalize the future meeting schedule at the first meeting.)
Date: 3/11, Tuesday
Time: 6pm
Place: 1630 Oakland Rd, A105, San Jose CA
Home work: Please read first 5 chapters; pay attention to the deals you like to discuss from daily financial news or your own
FYI only. Those who sign up are
- Cathy C: M&A veteran
- David H, Te and Ming: multi-talent entrepreneurs to be
- Ed R: successful entrepreneur, RE investor
- Edwin Y: creative and successful biz owner, breakthrough coach
- Francis: savvy investor
- Greg C: M&A
- Hubert Y: can-do/private banking expert
- Jeff Y: Angel and VC investor
- Josh C: group lead and coordinator
- Ross J: experienced executive/angel investor
- William X: next high-tech star/investor
If you have fellow sophisticated or accredited investors in mind, please invite them and let me know. I bet our group energy will stimulate the best out of everyone.
Thank you for your support
Josh
Thank you for your support for this initiative and the possibilities we can create together. We already have 13 people sign-up and maybe more to join. However, the meeting schedule has been tough to coordinate.
We have changed the first meeting to the following schedule. Please try your best to be there. ( we will also finalize the future meeting schedule at the first meeting.)
Date: 3/11, Tuesday
Time: 6pm
Place: 1630 Oakland Rd, A105, San Jose CA
Home work: Please read first 5 chapters; pay attention to the deals you like to discuss from daily financial news or your own
FYI only. Those who sign up are
- Cathy C: M&A veteran
- David H, Te and Ming: multi-talent entrepreneurs to be
- Ed R: successful entrepreneur, RE investor
- Edwin Y: creative and successful biz owner, breakthrough coach
- Francis: savvy investor
- Greg C: M&A
- Hubert Y: can-do/private banking expert
- Jeff Y: Angel and VC investor
- Josh C: group lead and coordinator
- Ross J: experienced executive/angel investor
- William X: next high-tech star/investor
If you have fellow sophisticated or accredited investors in mind, please invite them and let me know. I bet our group energy will stimulate the best out of everyone.
Thank you for your support
Josh
Invitation
Invitation of Value Investment Club: Principles and Practice
Dear Friend,
Warren Buffett, through his value investment philosophy, has produced an annual average return of 21.5% from 1965-2005. Many people including me dream to achieve similar results. However, do we spend enough time to understand why and how he made his business decisions? If we can't practice those proven principles, our investment results may still be at the mercy of the stock market or luck.
What we will do
You are invited to join this Value Investment Study & Practice Club. These are what we are going to do
1. study one book about Buffet's investment principles
2. discuss and share what new insights we have (1/2 of the meeting time)
3. invest on some real deals by applying those principles. (1/2 of the meeting time.)
Book Study
The book we've chosen is
Buffettology: The Previously Unexplained Techniques That Have Made Warren Buffett The Worlds (Paperback)
You can buy this book from local book stores or at amazon.com
http://www.amazon.com/Buffettology-Previously-Unexplained-Techniques-Buffett/dp/068484821X/ref=pd_bbs_sr_1?ie=UTF8&s=books&qid=1203467850&sr=8-1
Investment Practice
In this club, we have located one adviser for business acquisition. We will invite business brokers who can bring business acquisition deals for us. You are also encouraged to bring your investment deals/examples so we can brainstorm and provide inputs as a group. If you know of someone who apply value investment in stock market, please invite them so we can add one more dimension of investment vehicles.
First Meeting:
It is tentatively scheduled as below. We plan to have our meetings every two weeks and will discuss the future schedule at the first meeting.
Date: 3/11, Tuesday
Time: 6pm
Place: 1630 Oakland Rd, A105, San Jose CA
Home work: please read through the first 5 chapters.
Objectives
We will invest in real deals and achieve the return we target.
RSVP
Please let me know if you are interested.
Thanks,
Josh Chen
Dear Friend,
Warren Buffett, through his value investment philosophy, has produced an annual average return of 21.5% from 1965-2005. Many people including me dream to achieve similar results. However, do we spend enough time to understand why and how he made his business decisions? If we can't practice those proven principles, our investment results may still be at the mercy of the stock market or luck.
What we will do
You are invited to join this Value Investment Study & Practice Club. These are what we are going to do
1. study one book about Buffet's investment principles
2. discuss and share what new insights we have (1/2 of the meeting time)
3. invest on some real deals by applying those principles. (1/2 of the meeting time.)
Book Study
The book we've chosen is
Buffettology: The Previously Unexplained Techniques That Have Made Warren Buffett The Worlds (Paperback)
You can buy this book from local book stores or at amazon.com
http://www.amazon.com/Buffettol
Investment Practice
In this club, we have located one adviser for business acquisition. We will invite business brokers who can bring business acquisition deals for us. You are also encouraged to bring your investment deals/examples so we can brainstorm and provide inputs as a group. If you know of someone who apply value investment in stock market, please invite them so we can add one more dimension of investment vehicles.
First Meeting:
It is tentatively scheduled as below. We plan to have our meetings every two weeks and will discuss the future schedule at the first meeting.
Date: 3/11, Tuesday
Time: 6pm
Place: 1630 Oakland Rd, A105, San Jose CA
Home work: please read through the first 5 chapters.
Objectives
We will invest in real deals and achieve the return we target.
RSVP
Please let me know if you are interested.
Thanks,
Josh Chen
Subscribe to:
Posts (Atom)