Chroma Investing

Value Investing for beginning & small time investors and the value investing strategies of Graham & Klarman

Good Decisions, Bad Outcomes in Investing

One of my readers, Parker, pointed out in his comment on my post about Mistakes in Investing, that “one of the trickiest things about investing is determining when a bad result stems from a mistake (an oversight or error in process), or just from inevitable bad luck.” I felt that it was such an important distinction I would post about it.

Intrinsic Value – Beginning Investing Terms

Intrinsic value may be the most important concept in value investing. It is the foundation of everything else. Value Investors all agree that you start with the intrinsic value of a company. Now, how you arrive at that value is a different proposition, there you will have a lot of disagreement.

Investing Risks – What is Risk?

Looking at the risks of an investment is vital to understanding whether or not it is a sound investment. In a speech Alice Schroeder, author of Snowball, said that Warren Buffett starts his examination of a potential company by looking at the risks involved. If the risk is too high, he won’t go any further. We would be wise to follow this example.

Ben Graham’s Stock Selection Criteria – Value Investing Series

I found this idea in Tweedy Browne’s What Has Worked in Investing. And after a little more research I have included it in my Value Investing Series. In a “Test of Ben Graham’s Stock selection Criteria,” Henry Oppenheimer studied whether or not a set of Ben Graham’s investing criteria actually worked. Toward the end of Graham’s life he espoused a different, although related criteria to what he espoused in his master works Security Analysis and the Intelligent Investor.

Qiao Xing Universal Telephone (XING) – Update – Is anything going on?

I am not big on updates on Portfolio stocks for no reason. A little over a month ago I said I was purchasing XING a Chinese Net Net Stock. I purchased the stock at $1.91/share and in the last five weeks the stock has risen to $2.73/share or about 42% increase. I am not complaining but I found myself asking, Why?

Top Ten Investment List for 2009

Everyone loves lists it seems for this time of year, so I have complied my own. They are not all the same type of items, just important things that came up this past year. They are certainly not all the best investment ideas I had.

Why Does Value Investing Rock? – The Series

As part of a new series of Posts I am going to discuss why Value Investing is my preferred investment philosophy (although I have been known to stray now and then). I am going to sum up some of the most important studies that demonstrate why these theories are better than other strategies, in the long term. This does not mean that Uncle Homer didn’t make a killing buying Apple at $12 and selling it over $200. There will always be exceptions. But who wants to be an exception? I would rather have sound trading strategies on my side and not just luck. Although I will take good luck any time I can get it.

Net Net (NCAV) Stock Screeners

I am going to give up the best net current asset value (NCAV) stock screeners I know, but it is really a plea to find new ones, because the one’s I know have become either dated, less relevant, or are not cheap. First, for the beginning investors, I will describe a stock screener. As it’s name implies a stock screen sifts through stocks and winnows the wheat from the chaff. On a good one, you get to decide what is chaff and what is wheat. On the less than great ones, the you are told what is wheat and chaff.

Small Money Investors – Don’t Invest like Warren Buffett

When I say don’t invest like Warren Buffett, I mean don’t invest like Buffett does now. We can look at this in two parts.

Beginning Investor Terms – Price/Book ratio

It has been a couple of weeks since we had our last Beginning Investor Terms post, so lets get back in the saddle.

The Price to Book ratio (P/B) is a classic Value oriented term that is vital to understand, for understanding most schools of value investing. The equation is PB = Price per share/book value per share. Or an alternate is Market Cap/Book Value.

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