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Intel : The power of a monopoly

August 11, 2007

A company with a monopoly is the best stock to buy. Of course, anti-trust laws have rightfully abolished most monopolies from existence, but in a few niches, natural monopolies still exist. Many of the richest people in the world became rich because they owned monopolistic companies (Bill Gates, Carlos Slim). The CPU market is a […]

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My blog thus far

August 10, 2007

Its been a pretty hectic few months for me. And I’ve failed miserably in my initial aim of writing 1-2 posts per week. This is due mainly to my academic instinct of not putting anything in print until I’m sure I’m absolutely correct. In practice, this means the posts I write tend to be long […]

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The Chinese stock market

June 3, 2007

Recently, I have been thinking about diversifying into foreign stocks, because of the strong possibility of a sharp fall in the value of US dollar denominated assets. The state of the US budget and trade deficits have been getting so ridiculous that even Warren Buffett, who has previously famously eschewed macroeconomic bets, has recently been […]

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SAFM : Modest Upside and Possible Short Squeeze

May 27, 2007

Sandersons Farms (Nasdaq:SAFM) is the third largest publicly traded chicken producer in the US, behind Pilgrim’s Pride (NYSE:PPC) and Tyson (NYSE:TSN). Stocks of chicken producers have been badly battered in the last couple of years, first by the avian flu scare, and then by the high cost of corn feed. The sharply rising cost of […]

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CRWS : Unrecognized value in a micro stock

May 23, 2007

A week ago, one of my contrarian stock screens picked up a jewel, namely Crown Crafts (Nasdaq : CRWS), which, at $4, is ridiculously cheap by almost any fundamental measure. Crown Crafts is a manufacturer of quality infant and juvenile products, and owns or licenses many valuable brands, including Disney Baby, Sesame Street, Classic Pooh, […]

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David Swensen’s core asset classes

March 18, 2007

I just read David Swensen’s book, “Unconventional Success”, over the last few weeks, which I found extremely interesting. David Swensen is the highly regarded manager of the Yale University Endowment Fund, where he has achieved 20% returns over 2 decades. He pioneered the use of alternative assets (timberland, hedge funds etc.) in mainstream portfolios, and […]

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Important investment terms and valuation principles

January 1, 2007

Time value of money : A dollar tomorrow is worth less than a dollar today, because one dollar today can be invested, yielding more than one dollar in the future. Because of the time value of money, a cash flow in the future must be discounted to the present to give its net present value. […]

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The equity risk premium

December 31, 2006

Recently, I have been thinking about what the “correct” value of the equity risk premium should be. The equity risk premium is the extra return over the risk-free return (typically set as the yield of a long-term Treasury bond) that investors demand for investing in a stock. Surveys of investment managers indicate that most use […]

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