Investors who buy stocks without reading the company's disclosures leave themselves open to risks of which they are not even aware. Consider Escalade (ESCA), a diversified producer of sporting goods and office equipment.Escalade is cheap across a variety of metrics. It trades for just $10 million, despite having operating income exceeding $10 million in each of the years 2005, 2006 and 2007. Though the recession turned results negative in 2008, the company has cut costs aggressively and has ... Read Full Story

I am pleased today to announce the launch of Karsan Value Funds (KVF), a long-term oriented, value investment fund that I will manage. The fund will take equity positions in public companies which trade at discounts to their intrinsic values and where downside risk is low compared to upside potential.As it can take many years for such companies to return to trading at their intrinsic values, the investment horizon of the fund is of a long-term nature. To that end, investors will be discourag... Read Full Story

Most (though surprisingly not all!) investors like the idea of buying a stock for less than it is worth. But it's the calculation/determination of what a company is worth that trips most investors up. For some securities, however, determining this value can be relatively easy. For example, if a large proportion of a company's assets have a liquid market (e.g. a mutual fund), the calculation can be asserted with much more certainty.While real estate is not quite as liquid as most stocks and b... Read Full Story

Many people take comfort in buying stocks that others have as well. After all, if other people think a stock is good, there must be something to it, right? Therefore, it should come as no surprise that people love to know what star investors are buying, so that they can buy the same stocks. For example, shares of CarMax rose 7.5% on the day it was released that Berkshire-Hathaway was buying in.To fill this investor need for knowing what other investors are buying, a plethora of websites exis... Read Full Story

Charlie Munger is Warren Buffett's right hand man at Berkshire Hathaway. Over the next few weekends, we'll be summarizing the text he authored titled "The Psychology Of Human Misjudgement", where he describes some of man's tendencies. By understanding and learning from these tendencies, we better equip ourselves to avoid psychological biases when investing.The perfectly sane mother of a soldier who had not been heard from since World War II refused to believe her son was not alive and well. ... Read Full Story

Charlie Munger is Warren Buffett's right hand man at Berkshire Hathaway. Over the next few weekends, we'll be summarizing the text he authored titled "The Psychology Of Human Misjudgement", where he describes some of man's tendencies. By understanding and learning from these tendencies, we better equip ourselves to avoid psychological biases when investing.Humans tend to form judgements based on factors that may be irrelevant. This tendency of humans to be influenced by association is well u... Read Full Story

Charlie Munger is Warren Buffett's right hand man at Berkshire Hathaway. Over the next few weekends, we'll be summarizing the text he authored titled "The Psychology Of Human Misjudgement", where he describes some of man's tendencies. By understanding and learning from these tendencies, we better equip ourselves to avoid psychological biases when investing.Humans tend to form judgements based on factors that may be irrelevant. This tendency of humans to be influenced by association is well u... Read Full Story

All too often, investors either ignore or are unaware of historical precedents to today's economic issues. Whether it be the oft-repeated bullish proclamation "They're not making any more land!" (due to a lack of recognition of the repeated boom and bust nature of the housing industry), or beliefs that well-operated, efficient businesses will be quickly erased by emerging technologies, the lessons of history often go unheeded.One site that offers temporary reprieve from the mentality that we... Read Full Story

Some of our regular readers may have noticed that this site recently celebrated its first birthday! We'd like to thank all our readers for making it a success. This is hopefully only the beginning of the value investing community that is being built here, and to that end there are some exciting new announcements coming up in the next few weeks!This site also recently eclipsed the 600 subscriber plateau, but we can also tell that there are many visitors who are not subscribers. To subscribe (... Read Full Story

During recessions, with this one being no exception, value investors usually rejoice at the opportunity to purchase stocks at discounts to their net current asset values. That is, stocks that trade for less than their current assets minus their entire liabilities. While purchasing an "index" of net-nets should result in above average profits (if history is any guide), further careful analysis can lead to even higher returns.Not all net-nets are worth investing in. If the company is burning i... Read Full Story