About Watheeqa Investor Digest
Some of the world's renowned investors when asked what makes them great - the unusual but common answer is "We read and think". The main goal of WID is to bring our clients the best interviews, articles, research and thought provoking material that we come across, read and thoroughly enjoy. Our collections are old, nevertheless timeless treasures while some are recent and highly recommended.
We thought, why not put these fascinating gems together each month and share the collective wisdom of what we read. WID is our contribution from that inspiring idea. We truly believe - what you read and how much of that you internalize, reflects who you are. We suggest you archive our premium collections, read them and re-read them.
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Watheeqa Investor Digest - April 2010
Interview with legendary investor Peter Lynch
Peter Lunch is one of the best mutual fund managers in US history. Though he retired some two decades earlier; his commonsense approach, wisdom and knowledge on investing and markets – are timeless.
In this exclusive interview with Globes (Feb 2010), Peter Lynch argues "the average person can get to know 5-10 companies very well and once every few years he will come across an opportunity to make a good investment. In principle, you need 3-4 good companies to invest in over ten years. You don't need 3-4 good stocks every week, if you are a private investor.
You can't understand and be familiar with all of the market all of the time. You have to exploit your advantage to invest in what you really understand in depth, and not in what you don't. If you gamble and buy oil stocks one year and retail stocks the next and electronics stocks the year after that, that's not investment. That's just a bet."
Source: http://www.globes.co.il WID
Mario Gabelli; The legendary value investor talks
In an exclusive interview with Outlook Profit, Gabelli shares his investment philosophy. Gabellio says "There are times when people will pay more for a business but that does not necessarily mean that the value of the business has changed - it only means they are willing to pay more now".
When Gabelli was asked "What do you recommend investors should read?" He said "If you want to read about what happened in the US, you need to read J P Morgan's Jamie Dimon's 2008 Chairman's Letter, that's all. I read a lot of annual reports. To the readers, I would recommend reading the past 10 years of Berkshire Hathaway's annual reports."
Source: Outlook Profit, September 2009 WID
Parsimony is extremely profitable – Mason Hawkins
Mason Hawkins founded Southeastern Asset Management in 1975, and today the firm manages over $30 billion in value investments. The firm built on its tremendous track record in 2009, with its Longleaf Partners Fund posting its best absolute annual return of nearly 54%.
In this interview to Graham & Doddsville (An investment newsletter from the students of Columbia Business School) Mason Hawkins says "We clearly remind our associates that you’re right because of your facts and reasoning, not because someone agrees or disagrees with you."
Source: The Heilbrunn Center for Graham & Dodd Investing WID
Buffett Casts a Wary Eye on Bankers
Anderw Ross Sorkin takes a close look at Buffett's comment "Don't ask the barber whether you need a haircut." Sorkin begins "That little nugget was buried in Buffett'ss 2009 annual letter to Berkshire Hathaway shareholders. It was his thinly veiled dig at Wall Street bankers and the perverse incentive system for corporate "advice" on mergers and acquisitions - namely that bankers are paid only if a deal is completed. (Bankers typically earn nothing if a deal is abandoned or collapses, giving them little reason to recommend against pursuing a transaction.)
Source: The New York Times WID
I cannot value most businesses - Whitney Tilson
"Value investing is just buying something for less than it is currently worth. Why is it so misunderstood? It seems simple to understand but most people don't get it, why? Asks Jacob Wolinsky to Whitney Tilson.
Tilson argues "1. Value investing requires patience -- it is get rich slowly investment philosophy and most people want to get rich quickly. So the natural human inclination is to try to find a stock that will beat earnings by a penny next week and therefore the stock will jump 10%. People play short-term games trying to guess quarterly earnings.
2. To be value investor you have to be able to estimate intrinsic value. It is really hard to value businesses. You have to make predictions about the future and industry dynamics and that is very hard to do. I can tell you after getting a Harvard MBA and spending 11 years in the business it is still really hard to do.
I cannot value most businesses because they are out of my circle of competence. Even Buffett says he can't value most businesses. I'd guess that 90% of investors do not have skill or training or experience to value businesses. And if you can't value businesses you can't be a value investor by definition.
Therefore you play the momentum game or short term game or some other game."
Source: www.gurufocus.com WID