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 - October 2009

Inspirational Figures – Benjamin Graham

The authors – Paul Orfalea, Lance Helfert, Atticus Lowe, and Dean Zatkowsky of West Coast Asset Management pay their tributes to the father of value investing – Benjamin Graham.

The authors write "One of the strongest points Graham repeated throughout his career emphasized the importance of distinguishing investing from speculation, and choosing only to engage in the former. "Investing is most intelligent when it is most businesslike," wrote Graham. He insisted that stock not be viewed as a piece of paper bought and sold based on price, but as a share of ownership in a real company. Thus, as in our own entrepreneurial investing style, Graham focused on the company, not the stock; the value, not the price..." Read more

Source: West Coast Asset Management WID

Inspirational Figures – Bernard Baruch

The authors – Paul Orfalea, Lance Helfert and Atticus Lowe of West Coast Asset Management pay their tributes to one of the greatest investors in history – Bernard Baruch.

The authors summarize Baruch's six quotes on the stock markets as gold mine of good advice for the investors. And that profound advice is :

Don't try to buy at the bottom and sell at the top. It can't be done except by liars.
I made my money by selling too soon.
I never lost money by turning a profit.
If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he is wrong.
The main purpose of the stock market is to make fools of as many men as possible.
When good news about the market hits the front page of the New York Times, sell. Read more

Source: West Coast Asset Management WID

Too big to fail or too complex to succeed

Two interesting articles about Wall Street and the banking crisis appeared recently. A story headlined "It Wasn't Me" in the October 10th issue of The Economist suggests that instead of declaring banks "too big to fail," we should recognize such institutions as "too big to run." The other article was a humorous editorial by Calvin Trillin for The New York Times.

These articles remind us that the complexity of an organization matters more than its size. Exxon Mobil is indeed a huge enterprise, but a relatively simple business focused entirely on energy. We remain wary of General Electric, on the other hand, not because of its size, but because it is a complex web of seemingly unrelated companies that has a massive debt load and is heavily reliant on inexpensive borrowing. At some point CEOs must accept the role of the “mere mortal” and simplify the business to allow greater oversight, also known as management. Read more

Source: West Coast Asset Management WID

Wall Street Smarts

Calvin Trillin in the Op-Ed of The New York Times begins "if you really want to know why the financial system nearly collapsed in the fall of 2008, I can tell you in one simple sentence." Read more

Source: The New York Times, October 13, 2009 WID

Too Much Trust, Too Little Worry

Howard Marks, Chairman, Oak Tree Capital Management writes "In past market crashes, it was relatively easy to narrow the list of causes and culprits: the Arab oil embargo in 1973; Long-Term Capital Management in 1998; bubblish technology stocks in 2000; Enron and the overbuilt telecommunications industry in 2002. Seventy-six years ago, Ferdinand Pecora named names in "Wall Street Under Oath," a scathing indictment of bank behavior during the Roaring Twenties. But in this crash, there are literally too many contributors to enumerate." Read more

Source: The New York Times, October 5, 2009 WID