Some interesting links I’ve been reading over the last week.
  • John Mihaljevic’s answer to How can I find stocks that are undervalued? – Quora – Mihaljevic wrote the Manual of Ideas
    • Idea generation is both art and science. Not as simple as just doing quantitative screens and buying those stocks.
    • John shares many other value investor’s insights. Here are just a few quotes:

      “The principal method of idea generation is through the use of very long-term performance charts, which help to identify areas of currently depressed sentiment and hence probable low valuations. Ideas also come through more quantitative screening, subscription to quality newsletters like the MOI and general reading.” – John Lambert (GAM)

      “It’s just a long-term search process of opening yourself up to different ideas, don’t be closed off. Ideas come in many forms and many types of businesses, and even the way you evaluate them can be different on a case-by-case basis.” – Larry Sarbit

      “I try to read as few newspapers as possible. Maybe 80% of what you read is just entertainment, 10% is pure propaganda and 10% is information, some true, some false.” – Fernando del Pino

      “I literally spend almost all of my time reading. And while it, no doubt, makes me a bit of an oddball, my greatest pleasure is to be constantly searching for wonderful businesses that, for whatever reason, are mispriced.” – Mark Massey (AltaRock Partners)

      “I prioritize the companies that seem to be attractively priced, but a lot of the time I find myself researching companies in order to be prepared if the price becomes attractive in the future. Because of the very narrow focus on great businesses, I do not find as many interesting situations as many other investors do. A great deal of the work I do is simply expanding my knowledge base.” – Josh Tarasoff (Greenlea Lane Capital)

  • Charlie Munger answering questions at the Daily Journal 2016 Annual Meeting [transcript] [soundcloud] // AS ALWAYS, TONS OF QUOTABLES FROM MUNGER. HIGHLY RECOMMEND.
    • “Try to do a few things well, and it will work out. A few good decisions over a long period of time can lead to great success. You make your money by the waiting. A fair amount of patience is required. Like when we had all this money flowing in from the foreclosure boom, and we deployed it in a day. It wasn’t luck we had the money on hand.”
  • The Reality of Missing Out, Stratechery. // GREAT EXPLANATION OF HOW DIGITAL ADVERTISING 2.0 WORKS (BUT NOT FOR EVERYONE). GOOGLE AND FACEBOOK ARE BUILDING VERY LARGE MOATS IN A WINNER-TAKES-ALL BUSINESS. SOME EXCERPTS:
    • “Digital advertising is becoming a rather simple proposition: Facebook, Google, or don’t bother.”
    • “What Sandberg is detailing here is really quite extraordinary: Facebook helped Shop Direct move customers through every part of the funnel: from awareness through Instagram video ads to consideration through retargeting and finally to conversion with dynamic product ads on Facebook (and, in the not too distant future, a direct customer relationship to build loyalty via Messenger).”
  • Mark Cuban bets on gold due to confusion in market. [CNBC 11.Feb.2016] via ProfitConfidential – “When traders don’t know what to do, they go where everybody is. And I thought that would be gold,” said Cuban.

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