Reveals the proprietary framework used by an exclusive community of top money managers and value investors in their never-ending quest for untapped investment ideasConsidered an indispensable source of cutting-edge research and ideas among the world's top investment firms and money managers, the journalThe Manual of Ideas boasts a subscribers list that reads like aWho's Who of high finance. Written by that publications managing editor and inspired by its mission to serve as an "idea funnel" for the world's top money managers, this book introduces you to a proven, proprietary framework for finding, researching, analyzing, and implementing the best value investing opportunities. The next best thing to taking a peek under the hoods of some of the most prodigious brains in the business, it gives you uniquely direct access to the thought processes and investment strategies of such super value investors as Warren Buffett, Seth Klarman, Glenn Greenberg, Guy Spier and Joel Greenblatt.
Written by the team behind one of the most read and talked-about sources of research and value investing ideasReviews more than twenty pre-qualified investment ideas and provides an original ranking methodology to help you zero-in on the three to five most compelling investmentsDelivers a finely-tuned, proprietary investment framework, previously available only to an elite group of TMI subscribersStep-by-step, it walks you through a proven, rigorous approach to finding, researching, analyzing, and implementing worthy ideas
Foreword xi
Preface xiii
CHAPTER 1 A Highly Personal Endeavor: What Do You Want to Own? 1
Give Your Money to Warren Buffett, or Invest It Yourself? 2
Cast Yourself in the Role of Capital Allocator 7
Owner Mentality 14
Stock Selection Framework 17
Key Takeaways 18
Notes 20
CHAPTER 2 Deep Value: Ben GrahamStyle Bargains Inelegant but Profi table Strategy of Cigar Butt Investing 23
The Approach: Why It Works 24
Uses and Misuses of Ben GrahamStyle Investing 34
Screening for Graham-Style Bargains 41
Beyond Screening: Working through a List of Deep Value Candidates 44
Asking the Right Questions of Graham-Style Bargains 49
Key Takeaways 53
Notes 54
CHAPTER 3 Sum-of-the-Parts Value: Investing in Companies with Excess or Hidden Assets 57
The Approach: Why It Works 58
Uses and Misuses of Investing in Companies with Overlooked Assets 60
Screening for Companies with Multiple Assets 64
Beyond Screening: Proven Ways of Finding Hidden Assets 69
Asking the Right Questions of Companies with Hidden Assets 78
Key Takeaways 81
Notes 82
CHAPTER 4 Greenblatts Magic Search for Good and Cheap Stocks 83
The Approach: Why It Works 84
Uses and Misuses of Investing in Good and Cheap Companies 91
Screening for Good and Cheap Companies 98
Beyond Screening: Hope for Improvement Springs Eternal 102
Asking the Right Questions of Greenblatt-Style Bargains 106
Key Takeaways 113
Notes 114
CHAPTER 5 Jockey Stocks: Making Money alongside Great Managers 117
The Approach: Why It Works 118
Uses and Misuses of Investing in Jockeys 121
Screening for Jockey Stocks 131
Beyond Screening: Building a Rolodex of Great Managers 141
Asking the Right Questions of Management 146
Key Takeaways 150
Notes 151
CHAPTER 6 Follow the Leaders: Finding Opportunity in Superinvestor Portfolios 153
Superinvestors Are Super for a Reason 154
Uses and Misuses of Superinvestor Tracking 157
Screening for Companies Owned by Superinvestors 160
The Superinvestors of Buffettsville 163
Beyond Screening: What Makes a Company Attractive to Superinvestors? 171
Key Takeaways 175
Notes 177
CHAPTER 7 Small Stocks, Big Returns? The Opportunity in Underfollowed Small- and Micro-Caps 179
The Approach: Why It Works 180
Uses and Misuses of Investing in Small Companies 185
Screening for Promising Small- and Micro-Caps 189
Beyond Screening: Other Ways of Finding Compelling Small- and Micro-Cap Ideas 197
Asking the Right Questions of Small-Cap Prospects 207
Key Takeaways 212
Notes 214
CHAPTER 8 Special Situations: Uncovering Opportunity in Event-Driven Investments 215
The Approach: Why It Works 216
Uses and Misuses of Investing in Special Situations 220
Uncovering Special Situations 227 Asking the Right Questions of Special Situations 231
Key Takeaways 236
Notes 237
CHAPTER 9 Equity Stubs: Investing (or Speculating?) in Leveraged Companies 239
The Approach: Why It Works 241
Uses and Misuses of Investing in Equity Stubs 242
Screening for Equity Stubs 251
Beyond Screening: An Ambulance-Chasing Approach 253
Asking the Right Questions of Equity Stubs 257
Key Takeaways 264
Notes 265
CHAPTER 10 International Value Investments: Searching for Value beyond Home Country Borders 267
The Approach: Why It Works 269
Uses and Misuses of Investing in International Equities 272
Screening for International Equities 280
Beyond Screening: Riding the Coattails of Regional Experts 283
Asking the Right Questions of International Equities 285
Key Takeaways 291
Notes 292
References 295
About the Author 303
Index 305
