Dah Hui Lau (David): November 2006

Monday, November 27, 2006

Warren Buffett CEO: Al Ueltschi Video Interview with Robert Miles

Al Ueltschi shares his 75 years of contributing to the development and timeline of aviation - from Lindbergh crossing the Atlantic solo in an airplane, to learning to fly an open cockpit bi-wing airplane, to flying the founder of Pan Am and his distinguished guests, to developing safe ground based simulated pilot training, to using aviation to help solve worldwide blindness, and to selling his company to Warren Buffett.

Click on http://valueinvestorconference.com/ and then click on "watch video interview" after Al Ueltschi's name. After watching the video, you may want to meet and greet Al Ueltschi and hear his keynote address on "The History and Future of Aviation. " Simply register to attend the 4th Annual Value Investor Conference in Los Angeles on May 7 & 8.

Thank you Robert Miles for sharing!

David

Thursday, November 23, 2006

Happy Thanksgiving Day!

Happy Thanksgiving Day to everyone!

Best wishes,
David

Stockpickr: Collections of Great Investors holdings at Stockpickr

Worst Dow Stocks of the 21st Century

The Worst Dow Stocks of the 21st Century – The Dow Jones Industrials Average is at all-time highs, but here is a list of the 20 stocks in the index that have had negative returns over the past 7 years, despite earnings having doubled for almost all of them.

Please visit: Stockpickr.

Monday, November 20, 2006

CryptoLogic Inc. (CRYP) at $20.00

Dah Hui Lau (David) Conclusions:

"CryptoLogic is an interesting, cash-generative, cash-rich company in an expanding business (online gambling). It is reasonably priced because of many uncertainties i.e. change of CEO and headquarters, massive one-time charges this year and next year. Over a 5 years period, CryptoLogic seems like a good investment."

If you are interested in my analysis, send me an email.

All the best,

David

Berkshire Hathaway Intrinsic Value

What is Berkshire Hathaway Intrinsic Value?

Please visit: BRK Intrinsic Value Calculator.

Thank you Futile France for the link.

David

Friday, November 17, 2006

Comprehensive collections of Warren Buffett's resources

Thank you Value-Stock-Plus!

David

Milton Friedman: Influential Economist Has Died in California, at Age 94

Nobel Prize winner Milton Friedman, one of the most influential economists of the last century and a free-market champion, died today. He was 94.

Mr. Friedman was awarded the Nobel Prize in 1976. He long championed the cause of political and economic freedom and the links between the two. He originated, or was associated with, many breakthroughs in economics since the 1950s. He is best known for explaining the role of the money supply in economic and inflation fluctuations. He also developed, with this year's Nobel Prize winner in economics, Edmund Phelps, the theory in the 1960s that policy makers couldn't achieve a permanent tradeoff between lower unemployment and higher inflation, and that efforts to do so would simply result in the same unemployment rate and higher inflation, a view that holds sway at major central banks today, including the Fed.

To read the complete article.

Thursday, November 16, 2006

Bill Gates: Cascade investment vehicle shows strong influence of Buffett value style

'I've seen a migration of Bill Gates's investing mentality towards Mr. Buffett's over the years.' Timothy Vick, author of "How to Pick Stocks Like Warren Buffett"

To read the complete article.

Wednesday, November 15, 2006

Joel Greenblatt Buys Aeropostale Inc., Sells Lear Corp., Live Nation, Inc.

Famed investor Joel Greenblatt buys Aeropostale Inc., sells Lear Corp., Live Nation, Inc. during the 3-months ended 09/30/2006, according to the most recent filings of his investment company, Gotham Capital.

To read the complete article.

Mohnish Pabrai's Holdings: Sept 30, 2006

There are new names on the list:

FNF: Fidelity Nat'l Financial
LEA: Lear Corp.
DFC: Delta Financial Corp.

He sold all of his BRK.

To look at Mohnish Pabrai's holdings.

Thank you berkshiremystery for the wonderful link.

Dah Hui Lau (David)

Who is the Next Buffett?

Watch this short interview with Bruce Berkowitz, portfolio manager of Fairholme Capital Management, regarding "Who is the Next Buffett?": TheStreet.com .

What Boards Look for in a CEO

So what are the ingredients that determine the winners from the losers?

The basic attributes that separate the best candidates from the rest are:

Intellectual prowess: Don't underestimate the importance of sheer gray matter.
Having a well-founded point of view: Boards look for someone to stake out a sensible position with firmness.
Superior communications skills: This is the ability to unlock that gray matter and articulate that point of view in a clear and compelling way.
Values: There must be a strong match between what the individual stands for, and what the directors and the company stands for.
Executive presence: This is the intangible ability to inspire confidence in a group setting.

To read the complete article.

Happy learning,

David

The Dodge & Cox Mystique

In its 76-year history, Dodge & Cox has launched precisely four mutual funds. The firm doesn't advertise and has no marketing department. Yet investors are so taken with its funds that it has had to shut half of its tiny lineup to new customers to stanch the flood of money.

Obviously, results attract customers, and Dodge & Cox's results have been marvelous. D&C Stock, the biggest fund, with assets of $57 billion, has clipped Standard & Poor's 500-stock index seven straight years (including the first eight months of 2006). Over the past 15 years, its annual return of 15% tops the S&P 500 by an average of four percentage points per year. D&C Income, which invests mostly in high-quality, medium-term taxable bonds, has outpaced its average peer in 16 of the past 17 years. Balanced, the oldest fund, dating to 1931, has been in the top 20% of similar funds in each of the past six years. And International has surpassed its average rival in each of its five years of existence. (International and Income are the only funds that are open to new customers.)

What's behind the success of Dodge & Cox?

To read the complete article.

The greatest money manager of our time

What do ant colonies, novels and river systems have to do with making money? Ask Bill Miller, the man who's topped the market 15 years running. Fortune managing editor Andy Serwer reports.

To read the complete article.

Thank you Fu Lu for the wonderful link.

David

Friday, November 10, 2006

Tom Brown: Compucredit a Buy

From: Reuters.

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Tom Brown, who heads the $500 million hedge fund Second Curve Capital, said on that his best investment idea now is CompuCredit Corp., a subprime lender and credit card issuer.

Brown, who is an alumnus of Julian Richardson's Tiger Management hedge fund and who runs the Web site BankStocks.com, said CompuCredit is trading at six times estimates of 2008 earnings, and has $700 million of "excess liquidity" on its balance sheet, which it could use to make acquisitions or buy back stock.

Brown, who only invests in financial stocks, said Capital One Financial Corp. and First Marblehead Corp. are also among his top holdings. Brown said his holdings are giving his three funds "a great year," and added: "We're up over 40 percent in one of our funds."

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Bill Ackman: Borders Group a Buy

From: Bloomberg.

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Activist investor Bill Ackman said he purchased an 11 percent stake in Borders Group Inc., the second- largest U.S. bookstore company, sending the shares up the most in 10 months.

``The stock's cheap in our opinion, and the company seems to agree,'' Ackman said today at the Value Investing Congress in New York. Borders, based in Ann Arbor, Michigan, has ``one of the most aggressive share-repurchase programs I've ever seen.''

Borders shares may be worth $36 within the next 18 months, Ackman said. The stock rose $2.11, or 9.8 percent, to $23.65 at 4:16 p.m. in trading on the New York Stock Exchange, its biggest gain since January.

``They need to fix it or get rid of'' the international and mall business, Ackman said. ``I think management understands that. The reason why it's a passive investment is because we like what management is doing.''

The company had 62 million shares outstanding as of Aug. 25, an 11 percent decline from the 70.3 million shares it had a year earlier. The company authorized the repurchase of as much as $250 million of its shares in February 2005.

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Mohnish Pabrai: Pinnacle Airlines Corp a Buy

From: Bloomberg.

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Shares of Pinnacle Airlines Corp., whose sole customer is bankrupt Northwest Airlines Corp., were recommended by Mohnish Pabrai at the Value Investing Congress in New York.

``The next two years are going to be very good for the airline industry,'' said Pabrai, who manages $330 million at Pabrai Investment Funds in Irvine, California.

If the company were liquidated, it would fetch $9.55 a share, he said. That provides a ``floor'' for the stock price, Pabrai added.

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Monday, November 06, 2006

Whitney Tilson: Opportunity to sample the treats

From: FT.com.

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When it comes to owning stocks of the best-known businesses in the world, value investors usually feel like children looking through the window of the candy store, unable to afford the treats inside because they refuse to pay the prices such high-quality franchises typically bear. But a rare opportunity appeared over the past year for value investors to go inside the store and sample the treats.

First, buying low price-to-book stocks has produced superior returns over extended periods of time but there have also been periods of significant underperformance. Second, the average time in which growth stocks dominated was 37 months, whereas when value stocks returned to favour, they remained in favour for an average of 76 months. Interestingly, 76 months from the beginning of the latest value cycle in March 2000 took us to the middle of this year, which is when large-cap growth stocks started to outperform and traditional low price-to-book stocks started to underperform.

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David Winters: The Fat, Slow Pitch

From Forbes:

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The award for the most perplexing career move of 2005 goes to David J. Winters, formerly chief executive officer and chief investment officer of Franklin Mutual Advisers. Winters resigned from that $35 billion fund behemoth in order to found his own mutual fund. Repeat: mutual fund, not hedge fund. He calls his creation Wintergreen.

Ask him the question most often put to hedge fund jockeys by jumpy institutional investors: "What's your edge?" And he replies, "We're long-term investors."

Imperial Tobacco Group, whose stock is available in London as well as New York, is an example of what Winters means by fat and slow. He can hardly contain himself in describing this British cigarette manufacturer, which operates beyond the reach of the U.S. courts. "Ten years ago they were spun off from Hanson, and since then the rates of return are just wild," Winter says. "The compound rates of return have just been spectacular. They've taken it from being a domestic U.K. business to being a very global organization. And they've done a series of really intelligent acquisitions. They now buy back their own stock. They pay nice dividends. Excellent corporate governance and accounting." All this for the equivalent of 14 times the 2007 earnings estimate.

Newspaper publisher Gannett, for example, was trading at 12 times trailing net income, the lowest multiple in 15 years. "Wall Street loves companies that are growing at 35% a year," Winters said at the time, "but it has real trouble looking at companies that are either in decline or have some of the characteristics of a liquidation. The same thing was true when I invested in the steel industry a couple of years ago."

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