DailyFinance.comhttp://www.dailyfinance.comDailyFinance.comhttp://o.aolcdn.com/os/df/2013/img/2-dailyfinance_logo_m.pngDailyFinance.comhttp://www.dailyfinance.comen-usCopyright 2013 Weblogs, Inc. The contents of this feed are available for non-commercial use only.Blogsmith http://www.blogsmith.com/Chasing Value: The Very Best Investorshttp://www.dailyfinance.com/2011/04/06/chasing-value-the-very-best-investors/http://www.dailyfinance.com/2011/04/06/chasing-value-the-very-best-investors/http://www.dailyfinance.com/2011/04/06/chasing-value-the-very-best-investors/#commentsFiled under: , , , , , , , , , , , , , , , , , , , ,

After five years, 900,000+ words and a lot of interesting ideas this will be my last AOL post; a casualty of the Huffington Post deal. Chasing Value will live on somewhere else. In thinking of what to write about today, I thought it had to be a "best of" post so that I could leave readers with something useful to ponder.

To that end, let us start with the very best investors, and those that had a profound influence on me and contributed to my investment acumen in a meaningful and profitable way. It has to start with "my pal Warren": Warren Buffett that is, the chairman of Berkshire Hathaway (BRK.A and BRK.B). Say what you will about his recent issues regarding David Sokol's improprieties, it is highly improbable the world will witness again the 50-year run Buffett has had.

Buffett gave me the courage to trust my own research; to invest when others are fearful; to be patient, and that reversion to the mean is more reliable than most things you can observe in an inflated market.

A shout out also goes to Peter Lynch, the retired manager of the Fidelity Magellan Fund, one of the most successful funds of all time.

Lynch gave me many examples of what to look for in a stock bringing some clarity to an often muddy picture. One example that always stands out in my mind is what I will call the data-versus-doughnuts analogy. If you own a technology stock you will be depending on the company's ability to invent and keep on inventing. If a competitor comes out with something like an iPhone or iPad, it changes the market instantly. However, If you own a chain of 150 doughnut shops on the East Coast and a competitor with a better, cheaper product has 150 stores on the West Coast, you would have years instead of months to prepare for the competition.

The other thing that stands out from Lynch is his PEG ratio, or the price-to-earnings-to-growth metric. It is not a precise tool but it is very useful one. It reduces the conflict between value versus growth investing by establishing a correlation between the two.

Another person that I have learned from is John Templeton. He too invested when there was "blood in the streets," buying a pile of stocks for pennies on the dollar in 1939. It got me to consider buying Newcastle Investments (NCT) for 60 cents a share when the market, and all investors, were in pain. It is trading around $6.00 a share now.

Recently I have been reading up on more contrarian investors. The best book on the subject to me is by David Dreman, the very comprehensive and comprehensible Contrarian Investment Strategies - The Next Generation. In it he reviews various investment strategies and makes a case for value investing with a very contrarian slant, just like Buffett, Lynch, and Templeton. There are many more great value investors and plenty to read on the subject. If you want to be the best you must learn from the best, reading everything you can get your hands on.

In my most recent investment presentations, there is a "slide" that has two columns. The one on the left is a list of great investors including the aforementioned and many more, such as John Paulson, Bruce Berkowitz, Carl Icahn, Kerk Kerkorian. The column on the right is a list of investment concepts. They include day trading, technical analysis, Elliot Wave Theory, penny stocks, quantitative analysis, indexing, momentum investing, market timing and more. I like to ask the audience if they can link anyone from the left column to anything on the right and look at their puzzled faces; because they can't. None of the most successful investors uses these ideas. They do one thing and one thing only --- THEY BUY CHEAP!

This part of the presentation is always the most intriguing because what it underscores is that the really great investors truly zig when everyone else zags. The column on the right probably includes 95% of the investment world, pros and amateurs alike. For some reason people want a short cut and will not do the work. To me it is like professing to be very interested in physics, yet skipping the chapters on Newton and Einstein.

When I started writing for AOL, a note about my best investment was included in my bio, that would be my wife. Our 30th anniversary is coming up and I still find her amazing in a hundred different ways. In the stock market my top five holdings have changed a little. Intuitive Surgical (ISRG) and Southern Company (SO) are still in the mix but three new stocks have advanced. They are EZcorp (EZPW), Royal Dutch Shell (RDS.A) and Prospect Capital (PSEC).

Having posted over 1,200 articles, it is hard to determine what I might bring to readers' attention that was most timely or valuable. The following is a small sampling of some from a few years back and some more recent:
You will still be able to find Chasing Value through your favorite search engine, and hopefully you will take the time to look. Thank you to all the wonderful editors that made me look good. This post started with the best investors, went through some of my best investments and stories and will conclude by saluting the many readers that have contributed to my posts with their thought-provoking comments; I thank you for also being the best.

Sheldon Liber is an architect and the CEO of Chasing Value[TM] Asset Management, Inc. He writes the columns Chasing Value[TM] and Serious Money and is on twitter: @ChasingValue. Disclosure: Mr. Liber currently owns shares and options of BRK.B, EZPW, ISRG, PSEC, RDS.A, and SO.

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]]>berkshire hathawaybrk.aBRKBChasingValueDavid DremanfeaturedJohn TempletonPeter LynchSheldon Liberstocksvalue investingWarren BuffettSheldon LiberWed, 06 Apr 2011 17:20:00 EST10 Value Stocks for 2010http://www.dailyfinance.com/2009/12/30/10-value-stocks-for-2010/http://www.dailyfinance.com/2009/12/30/10-value-stocks-for-2010/http://www.dailyfinance.com/2009/12/30/10-value-stocks-for-2010/#commentsIf you're looking for a few value stocks to start off the new year, consider these 10 picks. The theme is back to basics with a little something for everyone: energy, water, food, communications, household needs and the immediate cash to buy them.

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]]>Sheldon LiberWed, 30 Dec 2009 14:00:00 ESTChasing value while getting a 16 percent yieldhttp://www.dailyfinance.com/2009/11/05/chasing-value-while-getting-a-16-percent-yield/http://www.dailyfinance.com/2009/11/05/chasing-value-while-getting-a-16-percent-yield/http://www.dailyfinance.com/2009/11/05/chasing-value-while-getting-a-16-percent-yield/#commentsFiled under:

When you run across a stock with a 16 percent yield you at least have to check out the story. Prospect Capital Corp (PSEC) is just such a company. Last week, PSEC declared its 20th consecutive increased dividend.

In sharing my adventures and opinions in the investment world I try very hard to be candid without crossing the line into being a promoter. That said, I have been buying stock regularly over the last 12 months and buying on fear has paid off handsomely. As the market has catapulted upward since March, the opportunities have diminished. However, I did add PSEC in the last month.

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]]>Chasing Valuedividendshigh yieldmezzanine debtopportunity fundsprospect capitalPSECSheldon LiberSheldon LiberThu, 05 Nov 2009 15:30:00 ESTCitigroup bonuses: A simple solutionhttp://www.dailyfinance.com/2009/04/29/citigroup-bonuses-a-simple-solution/http://www.dailyfinance.com/2009/04/29/citigroup-bonuses-a-simple-solution/http://www.dailyfinance.com/2009/04/29/citigroup-bonuses-a-simple-solution/#commentsFiled under:

What's all the fuss about Citigroup (C) wanting to pay bonuses to top performers so that they don't abandon ship? Obviously you wouldn't want to lose employees that are bringing in big bucks. However, you don't need to take the money from the taxpayers for this.

The answer lies in the question. Simply take the money away from board members and senior managers on down, starting at the top, who are not bringing in noteworthy profits (a CEO bringing in TARP money doesn't count) and balance out the bloated payroll to the degree necessary to keep top staff.

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]]>bonusesCCitiCitigroupExecutive payretention bonusSheldon LiberTARPSheldon LiberWed, 29 Apr 2009 17:30:00 ESTThe making of 'the world's cleanest Third World country'http://www.dailyfinance.com/2009/04/15/the-making-of-the-worlds-cleanest-third-world-country-mc-read/http://www.dailyfinance.com/2009/04/15/the-making-of-the-worlds-cleanest-third-world-country-mc-read/http://www.dailyfinance.com/2009/04/15/the-making-of-the-worlds-cleanest-third-world-country-mc-read/#commentsFiled under:

In an interview with the Financial Times, James Hackett, chairman and chief executive of independent oil and gas company Anadarko Petroleum (APC) said, "Washington's energy and environmental policy risks plunging the United States into an economic tailspin that could make it the world's cleanest Third World country."

Guess he won't be celebrating Earth Day with Al Gore, judging from his subsequent statement that, "The histrionic and maniacal focus on carbon dioxide is intellectually repugnant to me." But how does he really feel?

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]]>Anadarko PetroleumAPCcap and tradefeaturedglobal warminggovernmentgovernment regulationJames Hackettprofitssheldon liberstock picks 2009taxesSheldon LiberWed, 15 Apr 2009 08:30:00 ESTDon't play the bottom guessing gamehttp://www.dailyfinance.com/2009/04/13/the-bottom-guessing-game/http://www.dailyfinance.com/2009/04/13/the-bottom-guessing-game/http://www.dailyfinance.com/2009/04/13/the-bottom-guessing-game/#commentsFiled under:

It's been funny over the the past week watching various analysts, gurus, journalists and economists weighing in on whether now is the time to get back in the stock market. With the Dow and S&P at a one-month high, the technical analysts are out in force combing their charts for patterns of historical behavior. Is this a false dawn, the setup to an even bigger fall? Or should we call "bottom," even if that means technically we missed it by about four weeks?

I say "funny" because everyone knows it's virtually impossible to time the market, and that doesn't change just because it's lost nearly half its value in 18 months. A perfect example of the conflicting passions and neurosis currently at work came last Thursday.

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]]>bear market rallyDollar cost averagingMarket Bottomsheldon liberWell FargoWFCSheldon LiberMon, 13 Apr 2009 18:30:00 ESTFrom gold standard to no standards and inflation at the speed of lighthttp://www.dailyfinance.com/2009/03/28/from-gold-standard-to-no-standards-and-inflation-at-the-speed-of/http://www.dailyfinance.com/2009/03/28/from-gold-standard-to-no-standards-and-inflation-at-the-speed-of/http://www.dailyfinance.com/2009/03/28/from-gold-standard-to-no-standards-and-inflation-at-the-speed-of/#commentsFiled under: ,

In one of my previous posts, Is the stock market spring-loaded?, I coined the phrase Lightspeed Inflation in reference to the price pressures created by the breathtaking rate at which the government is now able to float new currency. It's time we stopped referring to the government's overspending as "printing money," because they don't really print much of anything anymore. In the electronic age, all it takes is a few simple keystrokes and -- blip -- another $7 trillion has been put into circulation.

Call me old-fashioned, but I'd actually prefer if the Federal Reserve did have to run the presses and slay trees every time they engaged in another round of "quantitative easing" (although I'm sure the environmental movement will have my head on this one). At least then they might exercise a little more discipline. In 1974, the year I started college, we went off the gold standard. Prior to that time we required ourselves to maintain the precious metal in sufficient supply to back up our currency. Now we just have flashing numbers on a screen backed up by the word of politicians. It reminds me of a cartoon I once read with the caption: "Our standards are very high. We even have double standards."

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]]>bill clintonColumnscurrencyfeaturedGeorge W. Bushgold standardgoldman sachsGSInflationlightspeed inflationpresident obamaSheldon LiberSat, 28 Mar 2009 11:30:00 ESTDefending Jim Cramer: Don't take entertainers too seriouslyhttp://www.dailyfinance.com/2009/03/16/defending-jim-cramer-dont-take-entertainers-too-seriously/http://www.dailyfinance.com/2009/03/16/defending-jim-cramer-dont-take-entertainers-too-seriously/http://www.dailyfinance.com/2009/03/16/defending-jim-cramer-dont-take-entertainers-too-seriously/#commentsFiled under:

If you have been following Wall Street news the past two weeks, you can't have missed Jon Stewart's trashing of CNBC, video clips and all. On Thursday, Stewart dragged James Cramer into the fray, showing various video clips of his blatantly bad calls.

Stewart has been roasting CNBC mercilessly and for good reason. The business news channel has been been a great promoter of all that is Wall Street with nary a criticism, and ignored investigative journalism altogether. This is not leadership in business news; it's cheerleading disguised as journalism.

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]]>Bear Stearnsin focusJames CramerJim CramerJon StewartJPMsheldon liberSheldon LiberMon, 16 Mar 2009 12:00:00 ESTLas Vegas or Detroit? America's emptiest cityhttp://www.dailyfinance.com/2009/02/17/las-vegas-or-detroit-americas-emptiest-city/http://www.dailyfinance.com/2009/02/17/las-vegas-or-detroit-americas-emptiest-city/http://www.dailyfinance.com/2009/02/17/las-vegas-or-detroit-americas-emptiest-city/#commentsFiled under: ,

It was brought to my attention by a business associate, Howard Brown, CEO of CircleBuilder Software, that there is one city that rivals Detroit in resembling a ghost town as of late and that is Las Vegas. Howard's home base is in Michigan (I'm in California) and we converse frequently about the economy and our business dealings several times a week.

It is hard not to despair at least a little about the demise of the US auto industry, and the sad fact that Michigan has the highest level of unemployment in the nation of any state. California ranks third, with budget deficits as far as the eye can see topping $40 billion at last estimate.

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]]>Americas Emptiest CitiesDetroitLas VegasSheldon LiberunemploymentSheldon LiberTue, 17 Feb 2009 16:00:00 ESTCourt rules the government is short sightedhttp://www.dailyfinance.com/2008/05/21/court-rules-the-government-is-short-sighted/http://www.dailyfinance.com/2008/05/21/court-rules-the-government-is-short-sighted/http://www.dailyfinance.com/2008/05/21/court-rules-the-government-is-short-sighted/#commentsFiled under: , , ,

On Tuesday an appeals Court ruled paper money discriminates against the blind. Since I'm quite sure paper money cannot take a position on the subject, clearly it was the U.S. Treasury that was at fault for its short sightedness. Having given the case a good look the appeals court refused to overturn a lower court ruling.

It would appear to me that the court system should have recused itself entirely based on the conflict of interest in the case since there is a long standing tradition of blind justice making impartiality most difficult.

Nevertheless the court did rule 2 to1 that it is entirely possible for the government to design paper currency so that the blind will be able to easily discriminate between different denominations.

While the court took issue with the government's lack of sensitivity on the subject they felt that sensitivity could easily be added to the paper currency by the use of a textured surface or varying the size of the notes as is commonly done in other countries that are more sensitive than our own.

The American Council for the Blind sued for such changes but the Treasury Department has been fighting the case for about six years. "I don't think we should have to rely on people to tell us what our money is," said Mitch Pomerantz, the council's president.

Unfortunately for all of us what our money 'is' only deals with a small aspect of our currency problem. The more pressing issue has to do with what it's worth!

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: sometimes I can be silly.


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]]>CurrencyDescriminationMoney DesignMoneyDesignSheldon LiberWed, 21 May 2008 16:00:00 EST