As I write this at the beginning of September, the SnP-500 index - the index representing the 500 most valuable companies in The United States- marches on toward all time high levels. Other world stock indexes have rebounded rather quickly as well. The SnP-500, the FTSE100 (England), the Euronext index, and broad Canadian ETFs have all recovered most of the value that they lost after the catastrophic month of March, and now seem to be heading toward highs. Although many traders subscribe to the idea of buying something at a high price and selling it for an even higher price, riding the market's momentum can hardly be considered investing in my eyes. I would prefer to look into opportunities that have a lower chance of losing their speculative valuations, even if I am at risk of missing out on the gains of the Apples and Teslas of the world. So where is there value for nimble investors?  Carrying on with my discussion of net-nets from the previous posts, there is plenty of value for...

One of my friends who is not well versed in investing recently asked me what I thought was the easiest way to make money in the stock market without doing much work. For this same reason I focused my previous blog post on introducing net-net opportunities as investments.  I have recently been investigating various studies that document the performance of net-nets in different countries. All of these studies report that portfolios of net-nets picked at random significantly outperformed the market indexes over the sampling periods. Most famous among these studies is the one by Henry Oppenheimer, conducted over the 1970-83 period. The most notable findings that should be interesting to investors are as follows: -Portfolios with an average of 35-50 stocks were constructed every year of the study with US stocks that were trading for 2/3 Net Current Asset Value (NCAV - or "net-nets") or lower. - Annual Geometric Mean Return from investing into this strategy was 28.5% per year. -Por...

 Although countless investing styles have been used to pull profits out of the markets, I would argue that most investors will fall into either of the following two categories: - Balance sheet investing: the investor values the quality of the assets that the company owns and seeks to invest in the company when its net assets are relatively cheap. -Cash flows/ Earnings estimations: the investor seeks to find and invest in those companies that will yield strong profits in the future, and seeks to do so at an affordable price that will allow for his investment to appreciate when profits subsequently rise. Both of these approaches are perfectly valid for investing in public companies. It is to the preference of the investor to pick a style that best suits his skill set. I would argue that the first is more of a cerebral approach whereas the second may benefit from creative thinking, as well as from comparative and forward thinking. Net-net Investing: A simple balance sheet investing ap...