skarsa72

You probably won't find a lot of value investors in the solar industry. As a relatively nascent industry, it hasn't yet proved its economic viability. Moreover, that viability is based on the prices of substitutes (e.g. natural gas, wind power etc.) and perhaps the support of the agents of taxpayers (i.e. politicians). Finally, there is a commodity-like element to this industry, as companies fight to provide relatively undifferentiated products to customers only interested in price. This... Read Full Story

Through a series of experiments, Dan Ariely documents the many ways in which humans behave irrationally. By understanding these human tendencies, we can both learn to behave more rationally when it is to our benefit, and better understand why those around us are behaving in the way they are. It's likely that few would dispute that humans often make decisions when under emotional extremes that they wouldn't make otherwise. But Ariely suggests that because of our tendency to self-herd, many... Read Full Story

Through a series of experiments, Dan Ariely documents the many ways in which humans behave irrationally. By understanding these human tendencies, we can both learn to behave more rationally when it is to our benefit, and better understand why those around us are behaving in the way they are. Twenty-four hour news programming provides interesting insights into the tastes of media consumers. For example, people seem to be far more captivated by rescue attempts of a child that has fallen into... Read Full Story

Western Union's ( WU ) P/E fell below 10 the other day as a weaker than expected outlook resulted in a share price fall of almost 10%. The stock now trades some 30% lower than it did in 2008 even though the company's profits are higher now than they were then as the company has clearly benefited from having a moat. Western Union gets the vast majority of its revenues (and profits) from consumer to consumer money transfers. For example, an immigrant in the US will go to one of Western Union... Read Full Story

I recently read a paper on competitive advantages in which many value investors will be interested. It's from 2005, so it does talk about Apple as being a company with no competitive advantage, but I think it has many useful elements nonetheless. The paper whet my appetite for Competition Demystified , which I look forward to reading very soon. What do you think about the paper 's conclusions? Do you buy this take on competitive advantages? Read Full Story

Many value investors tend to favour quantitative over qualitative factors when evaluating stocks. Nevertheless, it is absolutely imperative that investors go beyond the quarterly reports in evaluating a company's prospects. In the past, we have seen many instances where qualitative information gleaned from conference calls has been useful in determining the future direction of the business. For example, it was clear that Acorn International was under pressure to pay out some of its large... Read Full Story

Micropac Industries ( MPAD ) looks cheap...very cheap! It trades for $13.5 million despite net cash of $10 million and a profitable history: in the last four years it has total income of around $7 million. I read about this idea at Whopper Investments . If you don't already subscribe to that site, you should, as it has a number of actionable value ideas weekly. Rather than just repeat everything he says about Micropac, I'll link just to his write-up of the company . Disclosure: No... Read Full Story

What makes these three words (the title of this post) so hard to say? Does it suggest ignorance, incompetence or lack of intelligence? In the investing world, the phrase is probably not used enough, which may lead to the very dangerous state whereby one thinks one knows something, but really doesn't. The author of Freakonomics (whose book is summarized here ) takes a closer look at this phrase, and how its incentives are aligned in the business world. You can listen to the podcast here... Read Full Story

Through a series of experiments, Dan Ariely documents the many ways in which humans behave irrationally. By understanding these human tendencies, we can both learn to behave more rationally when it is to our benefit, and better understand why those around us are behaving in the way they are. Markets are a useful way for coordinating buyers and sellers of a particular product/service. But they can sometimes fail. Ariely argues that they fail far more frequently than we realize, because we... Read Full Story

Through a series of experiments, Dan Ariely documents the many ways in which humans behave irrationally. By understanding these human tendencies, we can both learn to behave more rationally when it is to our benefit, and better understand why those around us are behaving in the way they are. Another way we adapt is in how we choose our mates or dating partners. Ariely notes that people of certain attractiveness levels appear to date others of similar levels (e.g. attractive people date... Read Full Story