Massive Mouse

Everything with money is either an investment or the sacrifice of one. This seems simple enough, but the more you think about it, the more shocking is it’s impact. What It Means For Business In short, all any business is about is creating positive returns on shareholder equity that are greater than the combined impact [...]

It is extraordinary to me that the idea of buying dollar bills for 40 cents takes immediately with people or it doesn’t take at all. It’s like an inoculation. If it doesn’t grab a person right away, I find that you can talk to him for years and show him records, and it doesn’t make [...]

People are often surprised that I never consume traditional media (newspapers, TV, etc). I call it “selective ignorance“. “Selective” because I pick and choose what my brain gets exposed to, and “ignorance” as a joke. Why be selectively ignorant? Because the mainstream media is worthless, sensationalist, ill-informed and devoid of any intrinsic obligation to deliver [...]

…under many commonly encountered strategic situations, growth in sales and even growth in earnings add nothing to a firm’s intrinsic value. This statement seems to contradict an article of faith about a company’s sales and profits—[that] growth is good. However, as we explained earlier, growth on an even economic playing field creates no value. It [...]

“Approval, though, is not the goal of investing. In fact, approval is often counter-productive because it sedates the brain and makes it less receptive to new facts or a re-examination of conclusions formed earlier. Beware the investment activity that produces applause; the great moves are usually greeted by yawns.” — Warren Buffett, in his 2008 [...]

The fourth dimension of any stock investment involves the price-earnings ratio — that is, the current price divided by the earnings per share. In the attempt to appraise whether the price-earnings ratio is in line with a proper valuation for that specific stock, trouble begins to arise. Most investors, including many professionals, who should know [...]

I went to a seminar on flow-through shares. Then I went home, did the math, and confirmed what I suspected: although pitched as investments, flow-through shares favor the sellers (resource companies and stock brokers), not the buyers. What are flow-through shares? At first glance, flow-through shares seem like a great way to keep more of [...]

I tend to obsess over things. Over the past two years, it’s been Warren Buffett and the stock market. I approach it like this: the most ideal situation would be to have lunch with Warren Buffett and get his take on things. I suspect that anyone who sat down with him and heard him say, [...]

A discount rate is a negative percentage applied to a value on an annual basis. It is often used to determine the net present value of future cash flows. For example, the Consumer Price Index can be used as a discount rate to determine the future value of present dollars. Officially, the CPI measures the [...]

In my last post, I criticized the question, “Would you rather own 100% of a $2,000,000 company or 10% of a $100,000,000 company?” The speaker was trying to justify business partnerships by implying that they guarantee growth. Wouldn’t it be nice if growth were that worthwhile and that easy to come by? The original question [...]