Free Podcast – 21 Secrets of Tax Advantaged Value Investing 2 of 4 Q and A

Master Your Money Podcast

Mohnish Pabrai and Alberto Bacó Bagué answer questions from my MBA students.

The big continuation question of this podcast is for Mohnish, Benjamin Graham offered a simplified approach to value investing in 1976 at an academic conference when he said,

My first, more limited, technique confines itself to the purchase of common stocks at less than their working-capital value, or net current-asset value, giving no weight to the plant and other fixed assets, and deducting all liabilities in full from the current assets. We used this approach extensively in managing investment funds, and over a thirty-odd-year period we must have earned an average of some 20% per year from this source.  In January 1976 we counted over 100 such issues in the Standard & Poor’s Stock Guide — about 10% of the total.  I consider it a foolproof method of systematic investment — once again, not on the basis of individual results but in terms of the expected group outcome.” Graham’s full presentation is printed in Graham, Benjamin. 1976. Financial Analysts Journal 32(5). 20-23. Stocks with market capitalizations less than working capital can be found on the Value Line bargain basement list.  Do you also peruse the Value Line bargain basement list or other filtering lists such as these? If so, which lists are your favorites?

Podcast Part 2 of 4

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Podcast Part 1 of 4

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