Professor Glen Arnold

Buffett’s shift to embrace the qualitative (while not abandoning the quantitative)

Nov 25 2015 @ 05:33
I’m sorry to report this, but there are no net current asset value shares meeting the criteria – now I’ll search the market for cyclically-adjusted price earning ratio bargains. Until such time as I find one I’ll discuss more of the Warren Buffett story. We are still in 1967-8. Growing from the Graham root The […]

Buffett’s incomprehension and frustration

Nov 24 2015 @ 05:50
Warren was so irritated by the market’s odd behaviour in the late 1960s that he wanted to get across the point that the market can do some strange and irrational things. It cannot, therefore, be predicted over short periods, meaning months and even years. In his July 1966 letter to partners he repeated that he […]

Buffett - A perplexing bull market

Nov 23 2015 @ 05:47
I’ve searched the entire market for net current asset value investments. It’s not looking too hopeful as only four were shortlisted for further investigation. If one of them does turn out to be worth investing in I’ll write about it next week. In the meantime here is some more of the Buffett story – timeless […]

TClarke - improvement of profit margin is on track

Nov 19 2015 @ 05:05
Just a quick note: I was very pleased to read in TClarke’s interim management statement today that the expected profit margin improvement discussed in earlier posts (5th -10th Nov.) is on track as customers become more willing to pay in a tightening market for skilled sub-contractors. Here are the key sentences: “We can see a […]

Associated Cotton Shops – the deal and the subsequent performance

Nov 18 2015 @ 04:09
When they first starting discussing a possible deal, Rosner offered to show Warren round a few stores so he could see what he might be buying. Warren turned him down flat. The details of retailing were beyond his circle of competence. But what was definitely within his circle was the financial situation of the company […]

Associated Cotton Shops – a Buffett success

Nov 17 2015 @ 05:39
By 1967 Warren is running a very unusual investment fund. Rather than following convention by only taking minority stakes in stock market quoted companies he positions the Partnership as the majority shareholder of a broken textile company, Berkshire Hathaway (with an insurance subsidiary to be added soon). In addition $5m of the partners’ money (about […]

Buffett’s reflections on the Hochchild-Kohn purchase

Nov 16 2015 @ 05:30
In his 1989 letter to Berkshire Hathaway shareholders Warren mused on his change in emphasis from the qualitative (balance sheet in particular) to the qualitative, a thought prompted in part by the mistake of buying Hochchild-Kohn. “Shortly after purchasing Berkshire, I acquired a Baltimore department store, Hochschild Kohn ….. I bought at a substantial discount […]

Buffett’s Hochschild-Kohn investment – How did things turn out?

Nov 13 2015 @ 04:19
In the summer of 1967 Warren described the progress of Hochschild-Kohn as highly satisfactory. Ironically, considering its future success, in the same letter, he was quite depressed about Berkshire Hathaway. In January 1968 Warren stated he was enjoying working with the leaders of companies that the Partnership controlled, and that he was determined to keep […]

Buffett – the department store failure

Nov 12 2015 @ 05:33
In the late 1960s, the thirty-something Buffett is a multimillionaire. For over a decade he has been entitled to 25% of the gain he makes for his investment partners above the threshold of 4%. Because he has averaged returns of around 30% per year and the investment fund has grown to more than $50m he […]

TClarke – Management and Stability

Nov 10 2015 @ 06:00
A share bought because it has a low price relative to its average earnings over ten years is one that gives serious cause for concern to Mr Market. What analysts, who are less emotional than Mr Market, have to do is examine the facts and judge if the worries are justified or the share is […]
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