Weekend Reading at VIN

Long weekend so here is the list a day early…visit Value Investing News for more.

1. Betting Big, Winning Big: Interview With Bruce Berkowitz
(via online.barrons.com)

Barron’s: You run a very concentrated portfolio, with the top 10 holdings of the Fairholme Fund accounting for roughly 70% of the assets. Why is that?

2. Gannon On Investing: On Ignorance Admitted
(via www.gannononinvesting.com)

How well defined is your circle of competence? How honest are you with yourself? Join Geoff as he discusses these topics and current market environment.

3. Bruce Berkowitz on Sears Holdings (Video)
(via www.bloomberg.com)

4. How value investor Chou wins with bonds
(via www.theglobeandmail.com)

Mr. Francis Chou’s method can be boiled down to a few principles. As he wrote in his 2007 report to unitholders, “the cardinal principle of investing is to think first about preserving capital before thinking about making money. The greater the probability of permanent loss of capital, the greater the spread should be between a particular debt instrument and risk-free treasuries.”

5. Does the magic formula work?
(via www.contrarianvalueinvesting.com)

Ever since its release, much has been written whether or not Joel Greenblatt’s “Magic Formula” works. Joel Greenblatt has consistently said that results should be measured over time and every once in a while there would be stretches where the magic formula does not work.

6. How Bad Will This Get? The US Dollar.
(via www.fwallstreet.com)

“When the markets are flying high, value investors tend to sit back and let things happen. When they crash, we must start looking for opportunities — dissecting information, scouring annual reports and proxy statements, and evaluating which companies will survive and which ones will die. (That’s why I haven’t been around as much lately. Sorry.)”

7. Altria’s Spin: Your Questions Answered
(via valueplays.blogspot.com)

Answers to the most common PMI spin questions

8. How Bad Will This Get? The Recession.
(via www.fwallstreet.com)

Through our investing, we can combat the recession, achieve growth, and keep our heads above water (or fly high). To help us in that endeavor, we must understand the effects of the recession so that we pick the opportunities out of the blood on the streets.

9. World Wrestling (WWE): Cramer is Wrong – Buy for the Dividend
(via collegeanalysts.com)

A look at Cramer’s track record on the stock, and why you should buy even if the capital appreciation will be limited.

Billytickets will vote this down.

10. A Bear Stearns Market
(via www.washingtonpost.com)

“Panic is old hat on Wall Street. Rarely before, however, has there been a crisis so comprehensive as this one. It first materialized last summer in the shape of a disturbance in the low-rated, or subprime, mortgage market. “Contained,” the regulatory establishment hopefully pronounced.

11. Gannon On Investing: An Email on Economic Catastrophe
(via www.gannononinvesting.com)

Excerpt: “The Fed is in a very tough position. This is a credit problem. It’s serious. It’s hard to say what the result will be – but it could potentially be very bad. You can have some pretty catastrophic things happen when people start to panic – as far as what happens with money and how all sorts of things can seize up at once.

12. Mutual Fund Companies Make Better Investments Than The Funds They Manage
(via amateurassetallocator.com)

The stocks of mutual fund companies often make better investments than the funds they manage.

13. Understanding Valuation Measures
(via magicdiligence.com)

The second in a three part series, this article examines several valuation based formulas, explaining for each what it means, how to calculate it, what’s a good or bad number, and a simple example.

14. Special Situation: Steak N Shake a Landslide Victory!
(via streetcapitalist.com)

With the company now trading at about $8 per share there seems to be quite a bit of fear. One of the walls that stood in the way of the company’s value was their stubborn and entrenched management. With Biglari’s landslide win, change becomes very possible.

15. NVIDIA – The Fleeting Advantage
(via magicdiligence.com)

NVIDIA is a leading graphics processor maker. Over the last 3 years it has crushed it’s rival AMD (formerly ATI) in the technology battle, delivering huge revenue and earnings gains to shareholders and improving margins by 400%. But in the face of strong competition, does the company really have any durable advantage?

16. Bloomberg Interview with Jean-Marie Eveillard
(via www.bloomberg.com)

Bloomberg Interview with Jean-Marie Eveillard.

17. Sham Gad : Cash Is King Again
(via www.fool.com)

You usually don’t realize how good something is until it’s gone. For most investors, the red-headed stepchild in their portfolios is cash. When markets are advancing, it’s easy to see cash as a weak, underperforming asset that needs to be put to better use. After all, who wants sit on an asset earning low-single-digit returns when the markets are serving up double-digit gains?

18. Can’t Grasp Credit Crisis? Join the Club
(via www.nytimes.com)

It has been going on for seven months now, and many people probably feel as if they should understand it. But they don’t, not really. The part about the housing crash seems simple enough. With banks whispering sweet encouragement, people bought homes they couldn’t afford, and now they are falling behind on their mortgages.

19. Sooner Fed bail-outs than the 1930s revisited
(via www.telegraph.co.uk)

Put a clothes peg on your nose. The moral stench of bail-outs for the über-rich will be sickening. None of us wants to pay a farthing to rescue the bankers and assorted debt pimps who got us into this financial mess, and in doing so exposed our societies to such harm.

I found the comments to be the best part. Very thought-provoking

20. Why Paying $5 Per Share For Bear Stearns Might Make Sense
(via stockmarketbeat.com)

Bondholders can use options to hedge a stock buy, and effectively buy the right to vote in favor of the deal for $0.35 per share.