Invest Like a Guru: How to generate higher returns at reduced risk with value investing

253 Pages·2016·3.04 MB·Russian

by  Charlie Tian

Table of Contents
Cover
Title Page
Copyright
Dedication
Acknowledgments
Introduction
The Bloodbath
The Bubbles
Notes
Chapter 1: The Gurus
Peter Lynch
Warren Buffett
Donald Yacktman
Notes
Chapter 2: Deep-Value Investing and Its Inherent Problems
Deep-Value Investing
The Problem with Deep-Value Investing
Notes
Chapter 3: Buy Only Good Companies!
What Are Good Companies?
Notes
Chapter 4: Again, Buy Only Good Companies—and Know Where to Find
Them
Asset Plays
Turnarounds
Cyclicals
Slow Growers
The Stalwarts
Fast Growers
The Cyclicity of Businesses
Shooting for the Stars versus Shooting Fish in a Barrel
Notes
Chapter 5: Buy Good Companies at Fair Prices
Discounted Cash Flow Model
Reverse DCF
Fair P/E Ratio
Growth of Value
How Can a Good Company Be Sold at a Low Price?
Wouldn't It Be Even Better to Buy Good Companies at Lower Prices?
Summary
Notes
Chapter 6: Buy Good Companies: The Checklist
Checklist for Buying Good Companies at Reasonable Prices
The Warning Signs
Positive Signs
Notes
Chapter 7: Failures, Errors, and Value Traps
The Wrong Companies
Value Traps
Options, Margins, and Shorts
Notes
Chapter 8: Passive Portfolios, Cash Level, and Performance
A Basket of Good Companies
Dividend-Income Investing
How to Look at the Performances
Notes
Chapter 9: How to Evaluate Companies
Valuation Ratio Approach
Intrinsic Value Calculations
Rate of Return
Notes
Chapter 10: Market Cycles and Valuations
Over the Long Term, the Market Will Always Go Up
It Will Be Cyclical
Market Valuations
Projected Future Market Returns
Notes
Epilogue
About the Author
Index
End User License Agreement
List of Illustrations
Introduction
Figure I.1: Price Chart of Corning
Chapter 2
Figure 2.1 Value Investing and Margin of Safety
Figure 2.2 Price vs. Value for Mediocre Business
Chapter 3
Figure 3.1 Price vs. Value for Good Businesses
Figure 3.2 S&P 500 Gain vs. Years of Profitability
Figure 3.3 S&P 500 Loss vs. Years of Profitability
Figure 3.4 Profit Margin Distribution
Figure 3.5 Gain vs. Profit Margin
Figure 3.6 ROIC vs. Capex Out of Cashflow
Figure 3.7 ROIC Distribution
Figure 3.8 Gain vs. ROIC
Figure 3.9 ROE Distributions
Figure 3.10 Gain vs. ROE
Figure 3.11 Growth Distribution
Figure 3.12 Gain vs. Growth
Figure 3.13 Gain vs. Predictability
Figure 3.14 Interest Coverage Profitable 10y
Figure 3.15 Interest Coverage Profitable 7/8y
Chapter 4
Figure 4.1 CVS DOW Net Income
Figure 4.2 Basic Materials Revenue
Figure 4.3 Basic Materials Net Income
Figure 4.4 Energy Net Income
Figure 4.5 Consumer Cyclical Net Income
Figure 4.6 Healthcare Net Income
Figure 4.7 Consumer Defensive Net Income
Chapter 5
Figure 5.1 CHD EPS vs. FCF
Chapter 6
Figure 6.1 Financial Strength Distribution
Figure 6.2 Profitability Distribution
Chapter 9
Figure 9.1 WMT P/E
Figure 9.2 LUV P/E
Figure 9.3 LUV EPS
Figure 9.4 GD Peter Lynch Chart
Figure 9.5 CVS Median P/E Chart
Figure 9.6 CVS Max/Min P/E Chart
Figure 9.7 LUV Median P/E Chart
Figure 9.8 LUV P/S Bands
Figure 9.9 JNJ P/S Bands
Figure 9.10 AMZN P/S Bands
Figure 9.11 BRK P/B Bands
Figure 9.12 Oil Price vs. XOM Net Income
Figure 9.13 CVX P/E, P/B, Shiller P/E
Chapter 10
Figure 10.1 Profit Margin and SP500
Figure 10.2 TMC/GDP
Figure 10.3 Projected Return vs. Actual Return
Figure 10.4 Insider Sales
Figure 10.5 Insider Buys
Figure 10.6 Insider Buy/Sell Ratio
List of Tables
Chapter 5
Table 5.1 Dependence of Value on the Growth Rate
Table 5.2 See's Candy Earnings and Discounted Earnings
Table 5.3 See's Candy Pretax Earnings as Discounted to the Year 1972 at
Different Discount Rates
Invest Like a Guru
HOW TO GENERATE HIGHER RETURNS AT
REDUCED RISK WITH VALUE INVESTING

Charlie Tian, Ph.D.
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To my parents, wife, and children
Acknowledgments
I want to thank Lei, my wife, for the strength and inspiration she gives me daily.
Thanks to my parents for their encouragement and trust throughout my life.
Thanks to my son, Charles, who programmed the first version of GuruFocus
DCF Calculator when he was 12; my daughter Alice, whose soccer games have
been my biggest joy; and my little son, Matthew, who has brought me so much
fun and happiness.
I also want to thank Don Li, Holly LaFon, David Goodloe, Vera Yuan, and many
others at GuruFocus. They have transformed GuruFocus from good to great.
Thanks to the 300,000 GuruFocus users and 18,000+ subscribers for their
constant feedback and suggestions over the past 12 years. They have helped us
make GuruFocus.com a better website.
I cannot express enough appreciation to Warren Buffett and Peter Lynch,
although they will probably never know this. Their teaching has unleashed my
full potential and led me to reach new heights in life. I am grateful to the United
States of America. This great land has given me the opportunity to fulfill my
dreams. I also give thanks to my alma mater, Peking University. The rigorous
training I received during my 11 years there prepared me for quick learning
across different fields.
I also want to thank the Gurus who gave me the opportunities to speak with them
and interview them over the years. These Gurus include Prem Watsa of Fairfax
Financial, Francis Chou of Chou Associates, Joel Greenblatt of Gotham Funds,
Tom Russo of Gardner and Russo, Don Yacktman and Jason Subotky of
Yacktman Asset Management, Jeff Auxier of Auxier Capital, Tom Gayer of
Markel Corp., and many others.
Thanks to Erin McKnight, Jennifer Afflerbach, who has edited my writing, and
my friends, LeAnn Chen and Wenhua Di, for their comments and suggestions.