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I have done both, mainly pertaining to real estate, but also I have read a wonderful book about making money on the Internet, called Multiple Streams of Internet Income, by Robert Allen. Lastly, after creating time to get rich, and educating oneself, one simply MUST buy assets that will create money for one, and not liabilities and toys such as a new car every other year, and boats. Article: Rich people: fortunate, lucky, selfish, and arrogant? Or highly educated, caring, steel-trap individuals? modest rich isn’t hard, but it does require a bit of time and knowledge. Having time to get rich, educating oneself, and purchase purse are the three key factors in attaining untold wealth. Rich people usually either have or make time to get rich. Most people that now own huge mansions, have wonderful riches, and drive the nicest cars usually set up taking the road to riches in their spare time. One plan, the most common, is to work at a low-risk, steady job until one has enough money to invest in something that will feed one for the rest of their life. But preceding one can invest in anything, one first has to educate oneself. Although the best way to educate oneself in a particular investment is to have a mentor, and thereby gaining valuable hands-on experience, additional excellent way to do this is to listen to tapes and CDs and to read invoice on the subject. I have done both, mainly pertaining to real estate, but also I have read a wonderful book referring to making money on the Internet, Multiple Streams of Internet Income, by Robert Allen. Lastly, agreeable to creating time to get rich, and educating oneself, one simply MUST buy frozen assets that will create money for one, and not liabilities and toys such as a new car every other year, and boats. These come only accommodated to one can prove that he is qualified of handling and keeping money. Simply put, attuned to multi-millionaire Robert Kiyosaki: “Assets will feed you, and liabilities will eat you.” An example of an effects is a rent-house, or stocks and stranglehold in a inescapable company. Only, that is, if the cohort is good and the stocks are ultimately going up in value. In conclusion, we see that the three most important ways the rich keep getting richer are: having or making time, subject education, and consumerism assets. These are the key factors influencing wealth. I personally plan on educating myself in real estate, as it seems the simplest and safest way of getting rich.** **Note: If you’d like to use this article, feel free to do so, but please remember to include this message, and my resource box in every copy. Thank you! Jesus: The Man And His Work. - Long lost lecture by Wallace D. Wattles, author of The Science of Getting Rich, reveals the shocking truth about Jesus! Amazing Returns, Real Estate For Pennies. - Tax Lien Certificate Investors Are Getting Annual Returns of 16% to 50% Guaranteed by the Us Government! Someone who reads the blog sent me this email:
Yes. "You Can Be a Stock Market Genius" is probably the most practical investment book out there. I'd say the 1949 edition of The Intelligent Investor - which includes a section on valuation - and Peter Lynch's books are probably the other practical books. Phil Fisher's book is also practical. But I don't think many people are going to actually adopt his approach. Almost no one I talk to is willing to limit themselves to just a handful of stocks that they research for hours and hours and hours before they buy and then hold for a long time. Even though I think – both for value guys and growth guys – that is by far the best way to go. Back to "You Can Be a Stock Market Genius". I'm not sure why you think the spin-off market is much more efficient than it once was. It may be by some measurement. But all the estimates I've seen - there were some really good ones over at a now defunct blog called the special situations monitor - show that spin-offs still do better than the rest of the market. In addition, spin-offs (like net-nets) aren't that hard to separate the possible very, very bad performers from the rest of the pack ahead of time. That's similar to net-nets where a stock with zero retained earnings, losses in most of the last 10 years, and some leverage is a lot more dangerous than a stock with a history of profitability and almost no use of liabilities at all. It may work out. It may even turn out to be one of the best net-nets. But, it doesn’t belong in the “safe” net-net category. Spinoffs – like net-nets – are a place where a little selectivity can remove a lot of risk. Obviously, that’s because they aren’t being very carefully scrutinized by the people selling the stock. Spin-offs are a great place to invest. And when folks ask me how they can learn about analyzing businesses and what is the best place to do it my answer is spin-offs. The big reason is that you don't see the price ahead of time. You can evaluate the business before it trades separately. There's no better learning experience than that. I haven't written about spin-offs in a while, because there haven't been many that interested me. Right now, you have Huntington Ingalls – a spin-off from Northrop Grumman (NOC) – which is interesting in the sense that it might work out well. But it's not something I'm likely to write about. There are a few reasons for this. One, it's carrying a lot of debt relative to EBIT and it’s got slim margins. So, it really depends on EBIT expansion to survive and thrive. The stock is leveraged and that's where your returns will come from. You’re depending on an uptick in EBIT margins being multiplied by a lot of leverage – they’re borrowing at 7% in a low ROC business – to make you money. That might happen. And if you know a lot of about shipbuilding for the federal government, you might want to buy that stock. That one comes down to a qualitative analysis of how much of a risk there is that a business like that could ever get so bad it can't cover its interest. Basically, you’d have to feel much better about the risk that nothing especially bad can ever happen in that business than I’m ever going to feel. It’s just not something I know or feel I can know well enough when you’ve got that much debt. I talked about Hanesbrands (HBI) when it was spun-off from Sara Lee (SLE) in 2006. That was definitely my favorite stock idea around the fall of 2006. I mentioned it in a roundtable discussion as being my favorite idea. It was (and is) leveraged. But it's got a good position in a good business. The competition in the U.S. is just Hanesbrands and Berkshire Hathaway owned Fruit of the Loom. I understand underwear better than shipbuilding. That’s the difference there. Part of the problem with writing about spin-offs is just the audience that I'm writing for. Spin-offs and special situations are - well - special. People would like to learn some tools in addition to some stock picks. Or at least I'd like to think I'm giving people the ability to find stocks on their own. Spin-offs are pretty simple. They just involve reading. You read about them yourself and then you value them. If they trade at a very much lower price from what you think is right, you buy them. That's it. It’s not even that important exactly how you value them. You don’t need the perfect model. You just need to be able to read about a business, appraise a company, and tell an elephant from a mouse. I mean, if you look at Hanesbrands, I think it was spun-off in the $18 to $19 a share range. It’s at $28 right now. It’s leveraged. That’s the part you can argue about. But it’s not like $28 is expensive. In fact, if it can handle the leverage it’s got, the stock is worth more than $28 a share. And yet $28 is about 50% higher than where that stock was spun-off. I wouldn’t say anything especially good has transpired at Hanebrands. You just had a brief period where people were willing to sell something for $18-$19 that was in all probability worth $30+. So, the impediment to people understanding what I'm writing about enough to buy the stock really isn't some concept they don't get. It's just that a lot of people who read my blog or my articles at GuruFocus aren't going to read the SEC reports, the investor presentations, etc. Spin-offs are very basic that way. You look at them and try to value them a bunch of different ways and then you just judge if the market is way off. If it is, you can buy stock. I'd be happy to discuss spin-offs in the future. And this is an area where I think there should be a lot more coverage. Even bloggers don't write enough about spin-offs. So, yes, spin-offs are an area I'm very interested in. And yes, it's the general approach Greenblatt uses - and the way the book is written - that makes me say “You Can Be a Stock Market Genius” is the best investment book ever written. It's extremely practical. It's really not about how great spin-offs are. It's about how you just need to analyze a few situations independently of the market and have confidence in your independent analysis. It's like Buffett says... Don't look at the stock price before doing your analysis. Value the company. Then check the price: You can do that in micro caps as well as spin-offs; foreign stocks as well as domestic stocks. The key is doing that totally independent analysis - just an honest appraisal of the business. If you have the skill to make that honest appraisal of a business all you have to do is go looking for neglected stocks. They can be neglected because they are illiquid, family-controlled businesses with market caps under $100 million or $50 million or whatever. They can be neglected because they are spin-offs. They can be neglected because they are in Japan. But the basic idea is that if you can understand the appraisal idea that Joel Greenblatt talks about in "You Can Be a Stock Market Genius" or Ben Graham talks about in "The Intelligent Investor" all you have to do is find neglected stocks and appraise them. That's it. So, I don't really think of “You Can Be a Stock Market Genius” as being about spin-offs. I think of spin-offs as being places where people can easily - in a psychological sense - appraise businesses honestly, because they don't have the stock price and stock price history skewing their brains. It’s just very natural to appraise assets where you don’t have a price quote. And if you want to invest in stocks, you need to be able to appraise them apart from that quote. You can’t rely on the market. You have to do the work yourself. And spin-offs are all about working out what a company is worth on your own. Article Index: | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | 25 | 26 | 27 |
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