“Warren Buffett once wrote that value investing is like an inoculation--it either takes or it doesn’t--and when you explain to somebody what it is and how it works and why it works and show them the returns, either they get it or they don’t.”
-Seth Klarman of the Baupost Group
The following is my latest piece (in Scribd to preserve formatting) about the large amount of cash on the balance sheets of US corporations. Based on the number of proposed M&A deals announced recently, it appears that companies are starting to put their cash hoards to work. But, is this good news for shareholders? Given the dismal performance of many big mergers you will forgive me if I do not trust the majority of US CEOs to allocate capital in a way that is optimal for shareholders. For this reason and a number of others, it is our position at West Coast Asset Management that companies with huge net cash positions should begin returning cash to shareholders as opposed to letting it languish on their balance sheets.
A version of this article was posted on WCAM's website at: http://wcam.com/newsroom. If you are looking for a value-biased, long only manager for your assets, feel free to contact former TV star Andrew Firestone at afirestone@wcam.com to inquire about WCAM's investment philosophy.
Welcome to The Inoculated Investor. The reason I have created this blog is that I believe my insights and research can help both professional and non-professional investors improve their investing acumen. Through my commentary, links to high level articles and blogs, my own investment research, notes from conferences and speakers, and suggested reading lists I hope to add to my readers' understanding of investing, the US/world economy, and behavioral finance.
Since I am a dedicated value investor, much of the focus will be on links to commentary from value mangers I respect, my own value-biased equity research, and readings & media that are informative regarding the principles and disciplines of value investing. I happen to believe that to become a successful value investor a person must read constantly (like Buffett and Munger do) and actively live and breathe the philosophies. I also believe that it is imperative to develop an even temperament and demeanor that enable a person to go against the herd, refrain from panicking when others are fearful and avoid falling in love with specific stocks, themes and sectors.
My goal is to post high level links and longer pontifications on the markets or investing a couple of times a week. I will also periodically post interesting things that I come across so it will be important to check in on a regular basis. My promise is that every external link, reading recommendation, or piece of research has been read by me and is shared as a result of its pertinence, relevance and quality.
Everything included in this blog is my own opinion and does not reflect those of my current or former employers. I really hope you enjoy all of the components of this site and I encourage you to email me if you have any comments, questions, or suggestions on ways to improve the site. Also feel free to share my site with others if you feel it is valuable and insightful.
Posts
