Value Investor Today

Anymore video links and I’ll turn into a miniature Youtube but I couldn’t pass up the opportunity of sharing this one. I enjoy the work that the BBC does and as always they’ve done a brilliant job on this one. Here’s part one of the video and from this link you should be able to navigate your way safely enough to find part 2, part 3, and so on and so forth.

Part 1

I have a list of investors who I believe are in the league or will be in the league of Warren Buffett, Ben Graham, Philip Fisher, and others. It’s a very short list. Bill Ackman is on that list. Here’s the latest video I’ve found regarding him:

Video

Here is an interview Warren Buffett gave to CNBC on the 20th of January 2010.

Part 1

Part 2

I’ve finally found the ‘accurate’ data I was looking for and have settled on using the Wilshire 5000 to compare against the Gross National Product. I will include a time-line with the chart in the near future.

Here’s the Chart (click to enlarge)

Here is a 10-year look at the Wilshire 5000 Index as a percentage of total GNP (Not GDP that many erroneously use – big difference). Warren stated in the above article: “For me, the message of that chart is this: If the percentage relationship falls to the 70% or 80% area, buying stocks is likely to work very well for you. If the ratio approaches 200%–as it did in 1999 and a part of 2000–you are playing with fire. As you can see, the ratio was recently 133%.“

I start this chart where Warren left off at the 133% ratio. If someone using this chart as a reference (I don’t advocate using charts for your stock picking metrics and don’t worry, I’m not turning into a chartist), that person using a Margin of Safety could have placed some very nice bets starting in January of 2009 such as many value investors did.

[I will expand on this in the near future to backdate the ratio to previous years when I have finished collecting all the relevant data.]

It would seem to appear that these two are saying quite similar things when in fact they are very different.

Irrational:

Rational:

Warren Buffett on Taxes.

Here’s a couple funny Carl Icahn video clips.

This chart illustrates the Gross Public Debt from 1792 to the present. I’ve added a very condensed timeline.

Timeline:

1775 to 1783 – Revolutionary War

1812 – War of 1812

1860 – American Civil War

1913 – The Federal Reserve Act

1917 – U.S. entered WWI

1929 – The Great Depression

1941 – U.S. entered WWII

1980 – Federal Reserve’s “contractionary monetary policy”, the recession of the 80’s, the Federal Reserve Bubble, & deregulation’s by the Clinton administration are just few examples

2001 – Recession & The Bush War

2007 – Recession – ’stated income loan’, sub-prime mortgages.

As of 2007, the owners of U.S. Debt are:

1. U.S. Citizens – $2.67 Trillion

2. Japan – $649 Billion

3. China – $354 Billion

4. U.K. – $249 Billion

5. OPEC – $102 Billion

6. Korea – $66 Billion

7. Taiwan – $63 Billion

8. Caribbean Banks – $63 Billion

9. Germany – $56 Billion

10. Hong Kong – $55 Billion

11. Brazil – $54 Billion

12. Canada – $49 Billion

13. Luxemberg – $38 Billion

14. Mexico – $36 Billion

15. France – $31 Billion

16. Singapore – $29 Billion

17. Switzerland – $27 Billion

18. Turkey – $24 Billion

19. Sweden – $19 Billion

20. Ireland – $19 Billion

21. Dutch – $18 Billion

22. Thailand – $17 Billion

23. Israel – $17 Billion

24. Belgium – $15 Billion

25. India – $15 Billion

26. Italy – $14 Billion

27. Poland – $13 Billion

28. All others – $148 Billion

29. U.S. Government – $3 Trillion

30. Federal Reserve – $786 Billion

It is my personal belief that war has been the most influential factor in the deterioration of our county’s economic advance. In each of the largest gains of the chart, war was prevalent to a high degree. Unlike the past in which the country was allowed to recover from its war expenses for long periods of time, in recent history added taxation and new monetary policies, mainly from the Federal Reserve, haven’t been granted the same respect; escalating our debt rather than allowing us to recover from it.

Although it is true that during war time aspiring entrepreneurs have acquired large sums, in the long term excess taxes and changes in monetary policy have done much to erode any short term advancements.

It is my viewpoint that our country would be best served to allocate its capital in such a fashion as to provide more for a defensive purpose rather than what we have done in the past which is that of an offensive purpose. This viewpoint coincides with my libertarian point of view that Government was put in place to protect its citizens from tyranny and not to provide for its citizens monetarily. The Government should also not engage in activities of the same tyranny it is to protect its citizens from.

It will be quite interesting to look at this chart 10 – 20 years from now to see what kind of effects will be revealed through the passage of a universal health care policy. I believe it will add significantly to the deterioration of our economy.

On a lighter note, no time is better than the present to benefit financially from this country’s growing debt obligations by purchasing a company that specializes in collecting debt. Asta Funding (ASFI) – currently trading for less than its liquidation value with 10 years of successful and rapid growth.

Disclaimer: I currently hold a position in Asta Funding (ASFI). This is neither a recommendation to buy or sell any securities. All information provided believed to be reliable and presented for information purposes only. Do your own research before investing in any security.