1. When a country is in the initial phases of development it must focus on gardening agriculture. That means land has So a few ideas out of this book:
1. When a country is in the initial phases of development it must focus on gardening agriculture. That means land has to be redistributed equally so that all people have a right to compete. Garden agriculture is by a factor of 3 to 6 more efficient than industrialized agriculture output wise. It is not efficient in human hours , but guess what , when you have a poor country manpower is all you have in excess so gonverment must make use of it. Gonverment must start incentivizing people with fertilizers and freebies so that people produce more , food grts cheaper and somewhere along the way you start exporting.
2. Once you have a powerful agriculture then you start building industry. Gonverment must invest in the learning phase of manufacturing , must steal know how. It must be very careful not to join joint ventures with other international brands without stealing their know how. The key thing here is to learn as much as possible and to start having an EXPORT DISCIPLINE. This is the theme of this book. There is no other way a gonverment can know how good a company is then by checking its exports , my seeing how that company behaves in the world market and by setting export expectations for future freebies , if its conpetitive enough. It is a critical part since the entrrepreneur will always go on the easy path of real estate without creating value in the country. it is the duty of the state to incentivize and keep a tight leash on its high performing entrepreneurs. Gov must also start weeding losers and incentivizing winners.Along the years this turns to consolidation of great big firms that have huge leverage of said gonverment , but tat that point the country is already past development stage and does not make the discussion of this book.
3 Financial mechanisms: gov must hold banks so that it can continue funding industry while it is still developing. It knows the learning phase costs and the companies which are helped wont produce dividents for many years injtiailly but it is imperative to continue financing them. If state liberalizes banks , and invites private held funds and stock market , these will run away at first sign of trouble when financing a company in development , or will stop funding due to low yield.
These 3 points are more or less what this book is all about and it describes how countries from North East Asia (South Korea , Taiwan , China and Japan) have implemented these ideas by the book while countries of South East Asia. (Thailand, Malaysia. indonesia , Philippines) have fucked up one way or other despite starting alot better after WW2 both economically and politically wise.
A must read , an eye opening experience.
Now comparing this to my own country Romania to Ceausescu era, it looks like he didnt fuck up because he took loans and built stuff like industry and mangufacturing plants. He fucked up because he didnt focus on EXPORT DISCIPLINE, he didnt try to make the products he was developing better , he didnt focus on perfectioning them and making them sellable on the world market. He produced the same shit all over again along the years....more
This is a starting resource if one wants to understand city planning , better said , why entire cities lose their identity through gentrification due This is a starting resource if one wants to understand city planning , better said , why entire cities lose their identity through gentrification due to big real estate companies seizing any parcel of land they can take and building large high luxury buildings thus making landlords raise rent and dilocating medium and low wage families ; we also see how the city councils , planners , police influence these predatorial tendencies.
Though i didn't like that the book gets somewhat political by the end , condemning Trump , it does a good job portraying his family and the way they raised an empire through real estate constantly leeching people and cities....more
**spoiler alert** This book goes really deep into valuation of firms and accounting and it definetly gave me some new ways of seeing businesses and th**spoiler alert** This book goes really deep into valuation of firms and accounting and it definetly gave me some new ways of seeing businesses and the way they create value !
Some very interesting points:
- when evaluating a company always take into account the residual earnings of that company over a period of time. If a company has more sells it doesnt mean its more profitable. If i sell 2 dognut and then i but machinery and sell 10 dognuts i am not more profitable...i just invested more money into equipemnt , my operation is not more profitable. Some very important measures: RNOA- return on operating assets NOA- net operating assets OI- operating income Residual earnings Abnormal growth
- take into account the required rate of return when evaluating profits. If i invest in Microsoft and it has a growth of 10% /per year , i also should take into account that my money is locked for one year and therefore i should get paid for the cost of capital. Lets say my required rate of return is 10% , and MSFT grows with 10% per year , than it means there is no residual earnings/abnormal growth...i could keep my money elsewhere.
- try to get to the core earnings of the operation, the earnings that are made from the usual activities of the company ! If MSFT makes 10 dollars/year but it makes 6 from financing operations ( interest on some buildings it has leased) , 1 from selling a one time deal item (like a building) and only 3 from selling software...then i am interested in only those 3 dollars. We should take out profits made from non-core operations , or from one time deals the company made
- how stock options of employees deteriorate value for shareholders in the future when the right of exercising said options is used
This book is deep and solid but its calculations are hard to follow (even for someone that has read his share of financial/accounting books , though without a degree in accounting) without a pen and a paper. Even without the arithmetics it still has quite alot of value and it digs deep into the components that generate value within a company !
The book is separated within 4 parts each with a couple of chapters. Each chapter comtains a theory and mini cases followed by exercises. The exercises part is the hard one to follow.
Would have been a 4 star if the calculus part was more concise and a bit more simplified....more
Short book focusing on fundamentals of accounting valuation with some key points: - income from operating assets , return on operating assets and , assShort book focusing on fundamentals of accounting valuation with some key points: - income from operating assets , return on operating assets and , asset turnover should be paramount in any valuation - never include price of stock in valuation - use redidual income in order to challenge market price when assesing a company - make sure to include YOUR required return when assesing if you want to buy a stock or not - discard write-downs, one time payments , income generated from sale of property and equipment , deferred revenue from the balance sheet - beware of inventory dipping , back-bleeding and other shenaningans used in accounting
Overall a pretty hard read , with a limited number of ideas , but really really solid ones.
I marked it 4/5 because i think some explanations would have been required when presenting some data samples....more
This is indeed the work of a titan. While i started the book thinking it would be mostly about these particular types **spoiler alert** Stellar work !
This is indeed the work of a titan. While i started the book thinking it would be mostly about these particular types of securities and how to invest in them.... i was in for a treat.
The book covers in depth topics that could benefit a multitude of categories of readers starting from fund managers, company officers , accountants , lawyers in the financial domain as well as investors.
The book starts with the definition of distressed investing. Very interesting , it builds up on the reasons companies get distressed ; it follows with the not-known process of bankruptcy and liquidation and how all the parties fit in together and how the process moves forward, dividing the "pie" of assets.
The phrase that should stick with you regarding a bankruptcy process is: "It is a zero sum game" where a category of parties benefit on the lose of another.
Next we get a deep lesson on company health indicators such as EBIT(A) , EV , Debt , cash flows , how to measure them and how to spot red flags based on these indicators or , why not , investing opportunities.
We are then taken into the realm of capital structures , debt , equity , notes and all other kinds of securities , their sizing and most importantly their priority in the case of a default.
Next thing we get in the shoes of company management and their available moves in case the company ia going southward.
We then get in the shoes of the different types of creditors /stakeholders in a distressed firm and their moves.
Very interesting is the fact that the book also presents hypothetical as well as real cases of distressed conpanies.We are presented on how real companies acted when in unfavourable situations as well as how a hypothetical scenario might play out.
By the end we are also presented how a reorganization plays out and how each creditor is affected by the new capital structure, and also what to expect as a stakeholder with an interest in the new company.
Topics such as secured/unsecured debt , convenants , pledge provisions , trade claims , very interesting - tax returns , carryforwards and NOL's are also tackled !
My favourite part by far was chapter 6 , discussing leverage , which when taking a loan represents X times the EBIT.(e.g: my EBIT is 200, if i burrow 500 , the leverage is 2.5). It showed clearly based on a company EBIT what kind of debt it can sustain and manage to pay in a 5 year interval without going bankrupt. The author did an astounding job in proving through real data based charts and calculaltions that a leverage of more than 2.5 makes a company unable to ammortize the loan in a 5 year gap. In fact even a company that grows 8%/year can't do it and that considering a constant cash flow ! When the cash flow fluctuates it gets a lot worse. Even though i do not own a company this example sticked to me and i am planning to follow it on myself as if i am if i will ever consider taking a loan. Why are there people using leverages of 10 and more to buy houses/cars/stuff to show off is beyond my imagination !
This book is an enciclopedia in the fields of finance, investing and securities and i wholeheartedly recommend it to anyone interested in the aforementioned topics....more
The best thing about this book is that you get a unique occasion to see how do the people in charge of large corporations look like , how do they act The best thing about this book is that you get a unique occasion to see how do the people in charge of large corporations look like , how do they act , react and most importantly what do they really know about their business - most of the times a lot LESS then their grunts !
This compelling book takes us through the rollercoaster that Nokia has been through from 2008 to 2016.
From being the undisputed king of handsets , to getting smashed in just one year by apple and then by Android .From the bittersweet partnership with Microsoft to the war-like negotiations with Steve Ballmer for the Company's most precious division.
Last but not least , the abandonment of the handsets division and the leap of faith into the Network Infrastructure (Alcatel acqusition).
The best part : the Nokia boardmember-to become chairman - to become CEO is telling you the story just like a role playing game.
P.S When you are the Technology Manager and you don't know your OS takes 48h to compile for a phone , the same phone you are placing all your eggs in , you know you are in some deeep long term trouble....more
A total must read for anyone that wants to : - start a business - get some accounting basics - invest in the stock market (my case)
I knew there is alot mA total must read for anyone that wants to : - start a business - get some accounting basics - invest in the stock market (my case)
I knew there is alot more to company valuation then reading bloomberg news , checking the P/E ratio , ROI and Growth.
This book provides you with the building blocks of starting a business and of course by learning how to build , one learns to evaluate one business worth.
Impressive diagrams , schematics and comments. This book brings you in ~300 pages from zero to hero in thr field of finance , accounting , management and investing.
The author treats the financial statements in depth , taking all items one by one and discussing , explaining the intricate relationships betweeen them.
It is a shame books of financial tycoons such as Buffett/Lynch and all those "startup gurus" get all the media while this hidden gem is barely noticeable.
The book was kind of a let down from the investors perspective.I was expecting some really brilliant ideas from the 'Oracle of Omaha'.The book was morThe book was kind of a let down from the investors perspective.I was expecting some really brilliant ideas from the 'Oracle of Omaha'.The book was more focused on managerial should's and shouldn'ts.It mostly boils down to Bufett's stance as to why Berkshire Hathaway is the greatest company and how awesome are their policies compared to the typical corporation.
Not pretty much to learn if you are interested in learning the in's and outs of the market.
I must admit however that the author did a great job in the last 3 chapters when discussing on subjects such as current accounting practices , goodwill and taxation.
Overall a book designsted torwards general managers or people with out of the ordinary financial resources.
If investing it is you are interested in then i suggest grab a copy of Peter Lynch's One up on Wall Street ASAP !...more
By far the best book i've read on investing so far.While there are a dozen books that cover the basics and and tell you what to look for when choosingBy far the best book i've read on investing so far.While there are a dozen books that cover the basics and and tell you what to look for when choosing stocks, this is the first one that tells me as a novice why a particular value on the financial statements matters.
Peter Lynch does an awesome job in splitting stocks into 6 categories (slow ,fast growers, stalwarts, cyclicals,turnarounds and asset plays).
After separating them , he goes on explaining what to expect from that category and what indices really matter on the financial statements.
On top of that he provides real decisions that he has made during his career as director of Magellan Fidelity investment fund.
There's one thing to read in a random book about the balance sheet and there's another to read on how he bought Ford stock in 1987 based on analysing Cash vs Long term Debt.
These examples are abundand and are godly for the novice investor to get the nuts and.bolts on how the stock market works.
Terrific read , i reccomend it wholeheartedly !...more
It is a shame actually that this is regarded as the go-to book for individuals that want to get into value investing . It is only a resume , or betterIt is a shame actually that this is regarded as the go-to book for individuals that want to get into value investing . It is only a resume , or better put a collection of ideas taken from a far greater book written by Graham : Security Analysis.That's where the honey is kept....more
**spoiler alert** A totally must read for anyone thst is considering investing in the stock market. This book covers everything from types of investmen**spoiler alert** A totally must read for anyone thst is considering investing in the stock market. This book covers everything from types of investments, balance sheets, management , subsidiaries, ammortization , and perhaps the most important is the variety of real world examples taken from the stock market (1920-1939) and illustrated as charts, spreadsheets ..and how the author is analyzing each company in that specific setup and draws conclusions. A totally must read !...more
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