Chroma Investing » Investing Links

Chroma Investing Links July 2011

chroma — Wed, 06 Jul 2011 15:20:51 +0000

I haven’t posted recommended investing links in a while. But, first I wanted to highlight a couple of links that I have removed. Not because they aren’t worth your time but because the authors have shut down the sites or not updated to the point where it seems shut down. These include Valuehuntr.com (shut down), Thefallibleinvestor.com (not updated in over a year), Myvalueidea.blogspot.com (not updated in over 9 months). Publishing a value investing blog without any compensation can not be sustained over time, unless you really love it. Even then the demands of our vocations must be answered before the love of our avocation. I am sorry that these sites are done.

I would like to highlight the following investing sites:

Inoculated Investor- Ben runs a terrific site and I am surprised that I didn’t add his blog to my links earlier. Inoculated Investor has become my go to site for notes on Value Investment conferences or meetings that he attends.

Greenbackd.com- This is not a new recommendation, but it seems Toby has restarted posting again after a 6 month break. This is definitely one of my favorite blogs. I am excited that he has begun to post again.

Value Investing Links February 2011

chroma — Mon, 07 Feb 2011 04:38:30 +0000

I haven’t posted Investing links in a while. In the meantime I have discovered a couple of websites worth checking out.

Stock Spinoffs – The website does a good job of laying out stock spin off opportunities. I have recently reread Joel Greenblatt’s book You Can be a Stock Market Genius. In one of the chapter’s Greenblatt deconstructs past spin off deals he made and why they were good. If you haven’t read this book, just this section is worth the whole book. You must of course realize that most spin offs are not good deals, but that you need to find the right spin offs, but that is the way of value investing, finding the gems in the rubble.

Citron Research - This company is the opposite of sell side research with their relentless buy recommendations. Citron looks for potential short candidates, fraudulent or otherwise and then lays out their case. They do not disclose their positions, which would improve the site for me. I like website’s to disclosure their positions so I can follow the tone of their comments to their positions. So, I would verify all their information before making any investments. But it is a handy place to check for as a check against investing in a company

Value Investing Checklists

chroma — Sat, 30 Oct 2010 06:46:53 +0000

Monish Pabrai famously discusses the importance of having an investing checklist. While he has been coy about what is on his checklist, proprietary information or some such notion, Jae Jun over at Old School Value has shared his investing checklist with us. You can find his website (highly recommended) and his checklist here. I am not sure it is actually a checklist as much as a profile on how Jae invests. It is still valuable for thinking about what is is important in your investing process.

There is a fair amount of research that shows the value of checklists. I think they are valuable because help short circuit the human brain in a way that it wants to work against us. Namely, that our species is supremely overconfident. A checklist can remind us that we are not infallible, that we do make mistakes, and not to be too sure about our decisions. It is useful to begin to develop your own checklist for investing and Old School Value has given you a head-start.

A Few Lessons in Behavioral Finance

chroma — Tue, 23 Mar 2010 05:35:38 +0000

My Investing Notebook has a presentation called Confessions of a Value Investor: A Few Lessons in Behavioral Finance. I am ordinarily not a fan of looking at presentation, because it is easy to make incorrect conclusions without understanding the context or the point the author is trying to make. In this case, I think the presentation lays out some of the fundamentals of behavioral Finance, in a clear way. It is vital to understand where we can get in the way of our own investments. If you have no experience with behavioral finance this is a good introduction. Enjoy.

Reviewing Forecasters – The Guru Grade

chroma — Fri, 19 Mar 2010 04:18:34 +0000

After listening to the noise, er, Financial bobble heads, I have often thought, wouldn’t it be great if someone recorded what these idiots said and then held them to their predictions. Well it turns out their is a place that has at least partially granted my wish. It is called CXO Advisory Group (Yes, I know it is a very sexy name) and they have something they call the guru grade. To be honest I really wish they had this for economists, because my perception is that economists are more wrong (My Talebian influence coming through) than the gurus that are currently being measured, and just 14 out of 35 them have a 50% or better success rate. Obviously, I am not an economist. Feel free to bash the film business. I will probably agree with you.

CXO Advisory is not just Guru Grade. As described on their website they, “… present models, research summaries, analyses and reviews designed for objective, unique and concise value to serious individual investors and traders, financial advisors and fund managers – a modicum of actionable conclusions found in a very noisy environment. The default approach is to challenge any and all conventional market wisdom with analytical skepticism.”

They have research that suggests what works and doesn’t work, including technical analysis. This is an interesting value investing link, none the less.

Looking Outside to Get Inside

chroma — Thu, 18 Mar 2010 05:12:29 +0000

One of the things about the pursuit of knowledge, is that it is satisfying for its own sake. I have found that you can often find useful information, or perspectives in other disciplines. One of my new favorite blogs Psy-Fi is the kind of place that opens your mind to other perspectives, but then circles around in the behavioral Finance tradition. Or as their log line says, “a Sideways look at Psychology and Finance.” The latest post is just such an example where the author discusses a conflict within evolution and how that, loosely relates to finance. Does it get any cooler than that? The blog is very well written, thoughtful and insightful in ways that transcend the daily craziness that is often the investing world. If you have not checked the blog out, do yourself a favor and correct course.

An aid to Empirical Finance Research

chroma — Tue, 02 Mar 2010 04:37:14 +0000

I am a fan of empirical evidence that supports investing strategies. This sounds like an obvious statement, but many people don’t care, or at least that is how seems if you view their actions. I have previously highlighted evidence that could potentially enhance returns like Low price to book, and help protect against loss like the Altman Z score.

I have discovered a blog that sifts through Finance Studies to look for papers that can help with investing. The blog is called the Empirical Finance Research Blog. While it may sound dull, it is actually a terrific resource. The writer reviews financial papers and then evaluate them for practical investing on a scale of 1 to 10, 10 being the best. He also lays out his proposed investment strategy based on the research. One of the best aids I have found. I have one complaint. And it is selfish. The blog posts irregularly. His last post was from January.

New Beginning Investing Blog – The Fallible Investor

chroma — Tue, 23 Feb 2010 17:21:40 +0000

I came across a new investing blog that I think is terrific for beginning investors. It is the Fallible Investor. The writer is an Australian value investor who shares a lot of the same tastes as I do: Taleb, Montier, Klarman. I particularly like his concept of laying out scenarios for a business, good and bad and then describing the pros and cons of those scenarios. Even in a Net Net stock we need to look at the downside. Sure we may be protected by a margin of safety, but was is the likely scenario if everything goes south. IF liquidation is the likely outcome, have we really adequately calculated liquidation expenses and more importantly, would the liquidation be forced or as Klarman discusses “an orderly” liquidation. Each of these different scenarios effect the range of valuations. Also, what if our investment does better than expected? Having thought about the upside can help lead us to a better exit strategy.

The Fallible Investor recommends reading his posts from oldest first to get a sense of his investment philosophy. Enjoy!

F Wallstreet Returns – Investing Links

chroma — Mon, 08 Feb 2010 05:46:02 +0000

One of my favorite investing blogs was F Wallstreet, until Joe Ponzio stopped blogging because his hedge fund was taking up too much of his time. Joe has returned with an analysis of Breitburn, a natural gas and oil company that Ponzio thinks has been overly beaten up. Check it out and let me know what you think. He has a four page analysis that is interesting. I have no conviction about commodities, as they seem a speculator’s market to me. That is not a slight. I am just not very good at speculating about the future.

Free Magic Formula Lists – Chroma Investment Links

chroma — Sun, 06 Dec 2009 18:14:42 +0000

I haven’t posted many links lately. I have been busy researching new investing ideas. But I wanted to turn you on to some interesting sites. Todays links are all related to Magic Formula Investing. Joel Greenblatt of Gotham Capital fame devised this system of essentially low P/E, High ROIC companies. He outlined the Magic Formula Investing Approach in his Magic Formula Investing. He posts a “column” there. If you sign up you can get a list of recent Magic Formula Investing stocks by selecting number of stocks and minimum market cap.

Magic Diligence is another site devoted to the Magic Formula Investing strategy. Magic Diligence proposes to review the Magic Formula List weekly and give tips on the best companies from the list to invest in. It has a pay service element.

The last link is essentially a list of Magic Formula stocks.The list is updated weekly and should be a good alternative for anyone interested in this system of investing. He uses different criteria for his screener, by introducing a liquidity requirement and a higher minimum Market cap amount ($100) You can find the site here. Note this site has not be updated for a couple of weeks as of this posting.

Greenblatt is an interesting, witty guy and a phenomenal investor. Although I do not subscribe to the Magic Formula Investing Strategy, in an effort to present new investors with various viewpoints, I have included these links. After all the idea is to find companies worth investigating. This may be the ticket for you.

Disclaimer: If you purchase the book through this blog. I will receive approximately $.50. I have not actually made any money this way, but I thought it better to disclose the fact, in case someone actually did buy a book at Amazon. I no longer have an affiliate relationship with Amazon.

Chroma Investing » Investing Links

Chroma Investing Links July 2011

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