11

Value InvestingValue Investing

Buying Good Companies thatBuying Good Companies that

Are out of favor with the market.Are out of favor with the market.

……CHEAP!CHEAP!

22

33

Value InvestorsValue Investors

To name only two of many:To name only two of many:

Warren BuffetWarren Buffet

David DremanDavid Dreman

44

Making Market Panics ProfitableMaking Market Panics Profitable

Be fearful when most others are investing Be fearful when most others are investing aggressively.aggressively.

Invest aggressively when most others are Invest aggressively when most others are fearful.fearful.– But invest selectivelyBut invest selectively

Think: Panic, time to make $$$ !Think: Panic, time to make $$$ !

Warren Buffet, approximate quotation

55

Tell ‘em what y’urTell ‘em what y’ur goin’ a tell em goin’ a tell em

I hope you read Dreman’s book.I hope you read Dreman’s book.This evening we’ll define Value & Growth This evening we’ll define Value & Growth InvestingInvestingShow you how to find Value companiesShow you how to find Value companiesGiven examples of “out-of-favor” companiesGiven examples of “out-of-favor” companies– And how to use CF, Book Value and the SSG to And how to use CF, Book Value and the SSG to

evaluate themevaluate them

Talk about dealing with the psychological Talk about dealing with the psychological barriersbarriersDiscuss when to sell themDiscuss when to sell them

66

Handouts, etcHandouts, etc

GE Cash Flow Statement from Sept. 2009GE Cash Flow Statement from Sept. 2009

JP Morgan Cash Flow StatementJP Morgan Cash Flow Statement

TEVA Income and CF Statement, latest TEVA Income and CF Statement, latest quarterly, (6-K)quarterly, (6-K)

77

Value vs. Growth Value vs. Growth

Value: Any company (growth or mature) that has Value: Any company (growth or mature) that has come upon bad times and whose price has come upon bad times and whose price has dropped.dropped.

Growth: A company whose sales and earnings Growth: A company whose sales and earnings are growing well above the market averages or are growing well above the market averages or GDPGDP

Growth in normal times if the stock is at a Growth in normal times if the stock is at a bargain pricebargain price

88

Value vs. Growth Value vs. Growth

Value dominates opportunities when Value dominates opportunities when economy is in crisiseconomy is in crisis– But also a few value opportunities in normal But also a few value opportunities in normal

timestimes

Again: Growth in normal times when the Again: Growth in normal times when the stock is at a bargain price. stock is at a bargain price. – Longer time horizonLonger time horizon

99

Possible Value CompaniesPossible Value CompaniesWe’ll check out a few of theseWe’ll check out a few of these

GEGEFRE, FMA, SMAFRE, FMA, SMAAIGAIGWFC, BOC, JPM, GS, C, WFC, BOC, JPM, GS, C, GM, FGM, F

Some of these will go out of businessSome of these will go out of business– Like Bear Stearns, Lehman BrothersLike Bear Stearns, Lehman Brothers– Don’t just buy them!!Don’t just buy them!!

1010

Finding Value CompaniesFinding Value Companies

The press dramatizes these and helps The press dramatizes these and helps drive the price downdrive the price down– Take advantage of itTake advantage of it

Screen for them, maybeScreen for them, maybe– Sales growth up, p/e down, cfo up, future Sales growth up, p/e down, cfo up, future

market opportunity = TEVAmarket opportunity = TEVA– Then the SSG screen and more analysisThen the SSG screen and more analysis

1111

Using SSG for Value Co.sUsing SSG for Value Co.s

Look for RR TracksLook for RR Tracks– Acceptable in prior years 2 through 5Acceptable in prior years 2 through 5

– Okay if broken in current years Okay if broken in current years IFIF

You can find evidence the You can find evidence the company will recover.company will recover.

Run SSGRun SSG

1212

Go to SSG’s ofGo to SSG’s of

GE General ElectricGE General Electric

FRE Freddie MacFRE Freddie Mac

JPM JP Morgan ChaseJPM JP Morgan Chase

TEVA Teva Pharmaceuticals TEVA Teva Pharmaceuticals

1313

Consider Buying CompaniesConsider Buying Companies that … that …

Had reasonable RR tracks in normal timesHad reasonable RR tracks in normal times

Are still financially sound with good Are still financially sound with good management.management.

Were slammed by events beyond their controlWere slammed by events beyond their control

Can come back… gorillas, Can come back… gorillas,

Are way under valuedAre way under valued

Are not necessarily “growth companies”Are not necessarily “growth companies”

Then, if a mature company, sell when the p/e Then, if a mature company, sell when the p/e and earnings reach historical levels.and earnings reach historical levels.

1414

Have an Exit StrategyHave an Exit Strategy

If a mature companyIf a mature company

Price growth may flatten when normal Price growth may flatten when normal times returntimes return

This is a shorter term situationThis is a shorter term situation

Thus, sell when price growth flattens; buy Thus, sell when price growth flattens; buy a growth companya growth company

1515

Financial Crisis StrategiesFinancial Crisis Strategies

Set aside cash reserve to last several Set aside cash reserve to last several years. years. Buckets of MoneyBuckets of Money approach, (Ray approach, (Ray Lucia).Lucia).

Put aside additional cash early to invest Put aside additional cash early to invest “at the bottom”“at the bottom”

Get out early. But there is a danger of not Get out early. But there is a danger of not having a real crisis having a real crisis

1616

Consider the Business CycleConsider the Business Cycle…an econometric model…an econometric model

Just a taste… Consider doing Just a taste… Consider doing more research on this if more research on this if

interested. interested.

1717

Qinsight’s InsightQinsight’s Insight

High at about14,200 Oct. ‘07

Ease offClose toPlunge

EaseOff

Plunge

EarlyRevival

Dow

05 06 07 08 09

1818

Financial Crisis StrategiesFinancial Crisis Strategies

Leading indicators: Wait for the “plunge” to end Leading indicators: Wait for the “plunge” to end and start value investing in sound undervalued and start value investing in sound undervalued companies in early revival phase.companies in early revival phase.

After “plunge”,Continue to buy regularly to dollar After “plunge”,Continue to buy regularly to dollar cost average back into the market.cost average back into the market.

Sell the mature companies you bought when Sell the mature companies you bought when their valuation reaches fair valuetheir valuation reaches fair value

1919

Qinsight’s InsightQinsight’s Insight

High at about14,200 Oct. ‘07

Ease offClose toPlunge

EaseOff

Plunge

EarlyRevival

Dow

05 06 07 08 09

2020

Leading IndicatorsLeading Indicators

Raise cash before “plunge”Raise cash before “plunge”

Begin re-investing in “early revival”Begin re-investing in “early revival”

Go to Go to www.qinsight.com/www.qinsight.com/

Read the free weekly advisoryRead the free weekly advisory

Subscribe if you find the weekly advisory Subscribe if you find the weekly advisory helpful and you want more.helpful and you want more.

2121

Risks of Buying Value StocksRisks of Buying Value Stocks

BankruptcyBankruptcy

Breakup of CompanyBreakup of Company

Sale of CompanySale of Company

Sale of Assets or Chunks of Company Sale of Assets or Chunks of Company while the company survives.while the company survives.

2222

BankruptcyBankruptcy

General Motors InvestorsGeneral Motors Investors– Common Shareholders are the last to eat at Common Shareholders are the last to eat at

the carcass. GM Common Stock went to zerothe carcass. GM Common Stock went to zero– Bond holders are among the first to eat at the Bond holders are among the first to eat at the

carcass. GM Bond holders recovered some carcass. GM Bond holders recovered some or all of their investment. or all of their investment.

NO More on GM… Now for NO More on GM… Now for GEGE

2323

Breakup or Sale of CompanyBreakup or Sale of Company

Generally sells at “premium to the market Generally sells at “premium to the market price”price”

Generally the shareholders get a piece (s) Generally the shareholders get a piece (s) of the buying company.of the buying company.

Risk is buying above the buy out priceRisk is buying above the buy out price

Reward is buying below the “premium Reward is buying below the “premium price”price”

2424

Company Sells Assets Company Sells Assets to Raise Cashto Raise Cash

For example Kodak and GEFor example Kodak and GE

Companies are in weak bargaining Companies are in weak bargaining positionposition

Companies often hold on for years at a Companies often hold on for years at a low price. low price.

See See “Comcast Advances in Deal For NBC”“Comcast Advances in Deal For NBC”

Why is GE selling NBC? Why is GE selling NBC?

2525

GE selling NBCGE selling NBC

About half of GE’s business comes from About half of GE’s business comes from GE Capital Services (commercial real GE Capital Services (commercial real estate) estate) – Big downtown office towers, etc.Big downtown office towers, etc.

Commercial real estate is undergoing Commercial real estate is undergoing financial problems as small businesses financial problems as small businesses collapsecollapse

GE needs the cashGE needs the cash

2626

Things to ConsiderThings to Consider

Cash Position of the CompanyCash Position of the Company

Does the company have liquid saleable Does the company have liquid saleable assets?assets?

Is it “Financially Strong Enough to Is it “Financially Strong Enough to Weather the Crisis?”Weather the Crisis?”

2727

Things to Think AboutThings to Think About

Get a higher return for more risk.Get a higher return for more risk.

Is the company cheap because of the Is the company cheap because of the general economy?general economy?

What controls the company’s destiny?What controls the company’s destiny?– The market?The market?– The government?The government?– International events?International events?

2828

Key QuestionsKey Questions

Are they still the gorilla in their market?Are they still the gorilla in their market?

Has their stock price hit the bottom and Has their stock price hit the bottom and bounced at all.bounced at all.

What would be your sell strategy if you What would be your sell strategy if you bought this company? If they get back to bought this company? If they get back to their high price, will they continue to grow, their high price, will they continue to grow, or will they flat line?or will they flat line?

2929

David Dreman’s RulesDavid Dreman’s Rules

From: CONTRARIAN INVESTMENT From: CONTRARIAN INVESTMENT STRATEGIES, The Next GenerationSTRATEGIES, The Next Generation

Rule 29: … Buy during a panicRule 29: … Buy during a panic

Rule 30: … Analyze reason for lower Rule 30: … Analyze reason for lower pricesprices– Were they the company’s own doing?Were they the company’s own doing?– Is the management still in place?Is the management still in place?

3030

Plan for the Next PanicPlan for the Next Panic

Condition yourselfCondition yourself– Emotional responseEmotional response– Over reactingOver reacting

Plan aheadPlan ahead– Have dollars to investHave dollars to invest– Understand how to identify value situationsUnderstand how to identify value situations– Allow situations to lead you to value stocks Allow situations to lead you to value stocks

Think: A panic… Great! Time to make $Think: A panic… Great! Time to make $

3131

3232

Psychological Barriers to Psychological Barriers to Thoughtful InvestingThoughtful Investing

OrOrHow to Avoid Going off the How to Avoid Going off the

Deep EndDeep End

Adapted from Contrarian Investment StrategiesBy David Dreman

3333

Common Reasons Common Reasons for Bad Decisionsfor Bad Decisions

Over ReactionOver Reaction

Pressure of ‘social reality’Pressure of ‘social reality’– The consensus of the groupThe consensus of the group

Group peer behaviorGroup peer behavior

Psychological pressuresPsychological pressures– Powerful under conditions of uncertaintyPowerful under conditions of uncertainty

Unrecognized cognitive biasUnrecognized cognitive bias

3434

Understand Them!Understand Them!

Understanding these pressures is the best Understanding these pressures is the best protection against stampeding with the protection against stampeding with the crowd, but easier said than done.crowd, but easier said than done.

3535

Cognitive BiasCognitive Bias

Limitations of Information-Processing Limitations of Information-Processing CapabilitiesCapabilities

Systemic Bias of Information-Processing Systemic Bias of Information-Processing ‘Shortcuts’‘Shortcuts’

3636

ShortcutsShortcuts

Shortcuts highly efficient and timesavingShortcuts highly efficient and timesaving– Swamped with informationSwamped with information– Can react only to part of itCan react only to part of it– We use rules of thumb to simplify handling avalanche We use rules of thumb to simplify handling avalanche

of dataof data

Shortcuts work systemically against us in the Shortcuts work systemically against us in the marketplace.marketplace.– Reach different conclusions than what we should.Reach different conclusions than what we should.– Produce distortions about true oddsProduce distortions about true odds

3737

Cognitive Bias: Cognitive Bias: RepresentativenessRepresentativeness

Draw analogies and see identical Draw analogies and see identical situations where none existsituations where none existGive too much emphasis to the similarities Give too much emphasis to the similarities of events or samplesof events or samplesGive too little emphasis to the probability Give too little emphasis to the probability they will occurthey will occurMay reduce the importance of variables May reduce the importance of variables that are critical in determining the event’s that are critical in determining the event’s probabilityprobability

3838

Dreman’s Rule toDreman’s Rule to Overcome Overcome trap oftrap of RepresentativenessRepresentativeness

Look beyond obvious similarities between Look beyond obvious similarities between a current investment situation and one that a current investment situation and one that appears equivalent in the past. appears equivalent in the past.

Consider other important factors that may Consider other important factors that may result in a markedly different outcomeresult in a markedly different outcome

3939

Cognitive BiasCognitive BiasLaw of Small NumbersLaw of Small Numbers

The smaller the sample used (or the The smaller the sample used (or the shorter the record), the more likely the shorter the record), the more likely the findings are chance rather than meaningfulfindings are chance rather than meaningful

We over-generalize the meaning of a We over-generalize the meaning of a small number of supporting factssmall number of supporting facts

Limited statistical evidence seems to Limited statistical evidence seems to satisfy our intuition no matter how satisfy our intuition no matter how inadequate the depiction of realityinadequate the depiction of reality

4040

Dreman’s Rules to Overcome the Law ofDreman’s Rules to Overcome the Law of

Small NumbersSmall Numbers

Don’t be influenced by the short-term Don’t be influenced by the short-term record of a money manager, broker, record of a money manager, broker, advisor or punditadvisor or punditDon’t accept cursory economic or Don’t accept cursory economic or investment news without significant investment news without significant substantiationsubstantiationDon’t rely solely on the detail of the Don’t rely solely on the detail of the present situation: take into account the present situation: take into account the known prior probabilities of profit and lossknown prior probabilities of profit and loss

4141

Cognitive Bias:Cognitive Bias:Ignoring the Regression to the MeanIgnoring the Regression to the Mean

Over the long run, things trend back to the Over the long run, things trend back to the average instead of becoming more average instead of becoming more extremeextreme

Prevalent belief is that extreme returns, Prevalent belief is that extreme returns, both good and bad, will persist. Actually, both good and bad, will persist. Actually, they are outliersthey are outliers

4242

Dreman’s Rule to Overcome TrapDreman’s Rule to Overcome Trap

Don’t be seduced by recent rates of return Don’t be seduced by recent rates of return for individual stocks or the market when for individual stocks or the market when they deviate sharply from past norms. they deviate sharply from past norms. Long-term returns of stocks are far more Long-term returns of stocks are far more likely to be established again. If returns likely to be established again. If returns are particularly high or low, they are likely are particularly high or low, they are likely to be abnormalto be abnormal

4343

Cognitive Bias: Cognitive Bias: Inputs and Outputs Inputs and Outputs

should be Closely Relatedshould be Closely Related

Demanding immediate success invariably Demanding immediate success invariably leads to playing fads or fashions currently leads to playing fads or fashions currently performing wellperforming well

Actually, the value (input) is often not Actually, the value (input) is often not recognized in the price (output) for quite recognized in the price (output) for quite some timesome time

4444

Dreman’s Rule to Dreman’s Rule to Overcome the TrapOvercome the Trap

Don’t expect a good strategy to prove a Don’t expect a good strategy to prove a quick success in the market; give it a quick success in the market; give it a reasonable time to work outreasonable time to work out

4545

Cognitive BiasCognitive BiasAvailabilityAvailability

A mental rule of thumb by which people assess A mental rule of thumb by which people assess the frequency or the probability of an event by the frequency or the probability of an event by the ease with which instances of occurrences the ease with which instances of occurrences can be brought to mind.can be brought to mind.Usually recall events more easily that have Usually recall events more easily that have occurred frequentlyoccurred frequentlyRecall can be distorted byRecall can be distorted by– RecencyRecency– Emotional chargeEmotional charge– Extremely good or bad characteristicExtremely good or bad characteristic

These distortions move judgment away from These distortions move judgment away from long-term probabilitieslong-term probabilities

4646

SummarySummary

Cognitive biases are locked more firmly Cognitive biases are locked more firmly into place by group pressuresinto place by group pressures

When our own biases are reinforced by When our own biases are reinforced by the powerful influence of experts and peer the powerful influence of experts and peer groups we respect (and who interpret groups we respect (and who interpret information in the same way we do), the information in the same way we do), the pressure to follow becomes compelling.pressure to follow becomes compelling.

4747

SummarySummary

We are too apt to look at insufficient We are too apt to look at insufficient information in order to confirm a course of information in order to confirm a course of actionactionWe are too inclined to put great emphasis We are too inclined to put great emphasis on recent or emotionally compelling eventson recent or emotionally compelling eventsWe expect our decisions to be met with We expect our decisions to be met with quick market confirmationquick market confirmationWe need protective rules against the tug We need protective rules against the tug of prevailing fashionof prevailing fashion

4848

4949

Will the Will the Company Survive?Company Survive?

Check the Check the

Financial StatementsFinancial Statements

5050

Will the Company Survive?Will the Company Survive?

Necessary Financial StrengthNecessary Financial Strength– Can they service their debt?Can they service their debt?– With Cash With Cash – Or by selling Marketable SecuritiesOr by selling Marketable Securities– Saleable AssetsSaleable Assets

Book Value (ultra conservative)Book Value (ultra conservative)

5151

Financial StatementsFinancial Statements

We offer a separate financial statements We offer a separate financial statements workshop.workshop.

A GE Financial Analysis will follow. The A GE Financial Analysis will follow. The conclusions of the GE financial analysis will be conclusions of the GE financial analysis will be shown, not the whys and hows.shown, not the whys and hows.

Go to Go to www.betterinvestingsandiego.org/resourceswww.betterinvestingsandiego.org/resources and and look for the article on financial statements look for the article on financial statements

5252

Why GE Why GE

BI Magazine, September, 2009; p 8BI Magazine, September, 2009; p 8

Club Accounting #1 most active @ 147 Club Accounting #1 most active @ 147 buys and 30 sellsbuys and 30 sells

Bivio #2 most active @ 131 buys and 43 Bivio #2 most active @ 131 buys and 43 sellssells

SSG looks matureSSG looks mature

Big price dip looks valueBig price dip looks value

5353

Cash Flow AnalysisCash Flow Analysis

Having Sales and Earnings does not Having Sales and Earnings does not equate to having cash.equate to having cash.

Always watch Cash Flow from Operating Always watch Cash Flow from Operating Activities.Activities.– This is the net amount of cash the company This is the net amount of cash the company

took in (not necessarily earned) during the took in (not necessarily earned) during the reporting period.reporting period.

– A business can’t continue to operate without A business can’t continue to operate without cash.cash.

5454

Cash Flow AnalysisCash Flow Analysis

A healthy company generates cash from A healthy company generates cash from its operationsits operations

Uses cash to make investmentsUses cash to make investments

Uses cash to pay shareholders, debt Uses cash to pay shareholders, debt holdersholders

Has enough cash left to operate the Has enough cash left to operate the business for the next periodbusiness for the next period

5555

Saleable AssetsSaleable Assetson Cash Flow Statementon Cash Flow Statement

Check Cash Flow from Investing ActivitiesCheck Cash Flow from Investing Activities

Example (GE)Example (GE)

GE is selling NBC to Comcast for “around GE is selling NBC to Comcast for “around $30 Billion”$30 Billion”

Go to Go to http://sec.gov/edgarhttp://sec.gov/edgar to see how long to see how long that might last GEthat might last GE– Go over detail of GE Cash Flow Statement Go over detail of GE Cash Flow Statement

5656

Start with the GE Start with the GE Cash Flow StatementCash Flow Statement

9 months ended 9 months ended

Sept. 30, 2009Sept. 30, 2009

5757

Summary of GE so far Summary of GE so far

Income STATEMENTIncome STATEMENT– Interest coverage = how many times PTP pays interestInterest coverage = how many times PTP pays interest– Interest coverage = $7.7B EBT + $14.3B net interest ÷ $14.3B Interest coverage = $7.7B EBT + $14.3B net interest ÷ $14.3B

net interest = 1.54net interest = 1.54– Acceptable interest coverage is > 4Acceptable interest coverage is > 4– GE failed the interest coverage test, so dig deeperGE failed the interest coverage test, so dig deeper

Balance Sheet Balance Sheet – $160 B due in “Short Term…” Debt$160 B due in “Short Term…” Debt– $358 B due long term$358 B due long term– Mostly debt of GECSMostly debt of GECS

Cash & Cash Equivalents = $61 BCash & Cash Equivalents = $61 B

5858

5959

Will GE Survive?Will GE Survive?

Managing DebtManaging Debt– Cash & Cash Equivalents Cash & Cash Equivalents – For Sale SecuritiesFor Sale Securities– Short Term Borrowings Short Term Borrowings

Saleable Assets, see Business SegmentsSaleable Assets, see Business Segments

6060

For Sale SecuritiesFor Sale Securities

$53 B

6161

Short Term BorrowingsShort Term Borrowings

Due within12 Months

6262

Saleable AssetsSaleable AssetsBusiness SegmentsBusiness Segments

$30 B

6363

Saleable AssetsSaleable AssetsBusiness SegmentsBusiness Segments

$30 B

$65B ?$75B ?

$90B ?$20B ?

6464

Let’s Add it up!Let’s Add it up!

GE needs $70B to $160 B to service debt in next GE needs $70B to $160 B to service debt in next 12+ months12+ months

Cash Flow Operations Est. > $15 BCash Flow Operations Est. > $15 B

Cash & Equivalents = $61 BCash & Equivalents = $61 B $ 76B$ 76B

Saleable Securities = $53 B Saleable Securities = $53 B $ 129B$ 129B

Sale of NBCUSale of NBCU = $24 B= $24 B $153B $153B– $6 B to Vivendi for its share of NBCU$6 B to Vivendi for its share of NBCU

Sale of rest of company = $250 BSale of rest of company = $250 B

6565

How How COULDCOULD GE Manage its debt? GE Manage its debt?

Assumes $ & debt is all accounted forAssumes $ & debt is all accounted forService current debt.Service current debt.– Pay interest and principle duePay interest and principle due

Pay off or roll short term borrowingsPay off or roll short term borrowings– Roll means to write a new loanRoll means to write a new loan

Reduce “net interest” by managing interest Reduce “net interest” by managing interest coverage upwardcoverage upward– Move ratio of PTP to net interest from 1.5 Move ratio of PTP to net interest from 1.5

ultimately to 4 or higherultimately to 4 or higher

6666

6767

More ConclusionsMore Conclusions

Leverage is not a good thing !Leverage is not a good thing !

Borrowing more money is costly or Borrowing more money is costly or impossible when they can’t service their impossible when they can’t service their debt from earningsdebt from earnings– Debt is a terrible thing to have in a financial Debt is a terrible thing to have in a financial

crisis.crisis.– Not well positioned to buy good dealsNot well positioned to buy good deals– Won’t have the cash to speed their recoveryWon’t have the cash to speed their recovery

6868

Speculation about the Speculation about the Financial AnalysisFinancial Analysis

GE will be a smaller company for a whileGE will be a smaller company for a while– May need to sell off more parts of GEMay need to sell off more parts of GE

GECS may be monetizing future GECS may be monetizing future commercial real estate receivables.commercial real estate receivables.– ““Do I have a deal for you! Pay me now and I’ll Do I have a deal for you! Pay me now and I’ll

give you a great bargain”give you a great bargain”

6969

7070

HomeworkHomework

Understand the calculation of GE Book PriceUnderstand the calculation of GE Book PriceLook at JPM and TEVALook at JPM and TEVA– Financial Statements attached to your notesFinancial Statements attached to your notes

JPM, a bank that took TARP $JPM, a bank that took TARP $TEVA, an Israili Pharmacuitical CompanyTEVA, an Israili Pharmacuitical Company– Growing salesGrowing sales– Somewhat flat earningsSomewhat flat earnings– Flat stock priceFlat stock price– Growing cash flow from operationsGrowing cash flow from operations

7777

When to Sell Crisis StocksWhen to Sell Crisis Stocks

When the crisis is over and the economy When the crisis is over and the economy has recovered.has recovered.

When the P/E reaches the average for the When the P/E reaches the average for the industry.industry.

Rule 21: Sell when P/E reaches that of Rule 21: Sell when P/E reaches that of the overall market, regardless of outlook.the overall market, regardless of outlook.

Rule 19: Buy mid to large cap companiesRule 19: Buy mid to large cap companies

Rule 15: Buy blue chipsRule 15: Buy blue chips

7878

Tell em what yu told emTell em what yu told em

We recommended Dreman’s book.We recommended Dreman’s book.

We’ve defined Value & Growth InvestingWe’ve defined Value & Growth Investing

Showed how to find the companiesShowed how to find the companies

Discussed the psychological barriersDiscussed the psychological barriers

Given examples of out of favor companiesGiven examples of out of favor companies– And how to use CF, Book Value and the SSG And how to use CF, Book Value and the SSG

to evaluate themto evaluate them

We discussed when to sell themWe discussed when to sell them

7979

Do you have Questions?Do you have Questions?

8080

Next BI EventNext BI Event

Mark your Calendars !Mark your Calendars !

February 4February 4thth, 2010, 2010

Thursday between 6:30 and 9:00 PMThursday between 6:30 and 9:00 PM

Right hereRight here

Club AccountingClub Accounting

Using Took Kit 6, The Stock Selection Using Took Kit 6, The Stock Selection GuideGuide