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When Book Value is Rubbish

Firstly, for some academic background to this article read this one: Smoke, Mirrors & Balance Sheets. Now, when is it justified that a stock trades below book value? Well, the answer is simple enough: when book value is overstated. But how … Continue reading

Illustrating Investing in the Small Cap Cycle

I have drawn this rather crude illustration of what some call the “small cap cycle”. The Y-axis of profit stands for the growing profits of the business as well as the increasing investment returns over time (as, in the long-term, … Continue reading

How Does Acquisitive Growth Work?

Due to consolidation accounting (or “Group accounting”) rules, when one company controls another one (from 50% + 1 vote up to full-control of 100%, depending on circumstances), that first company (or the “parent” company) gets to accounting for both the financial … Continue reading

No Forecasts for 2017 Found Here!

At this time of year, I normally put together a nice little article with some broad strokes about what I think the year ahead will hold. The rise of Populism and the potential proliferation of Black Swan events leads me to … Continue reading

The Communism of Capital

Economically, politically and technologically, we are all in uncharted territory. The pool of “known unknowns” and what I suspect are “unknown unknowns” is wide, deep and vast. And then we get Japan. For some background to Japan’s current economy, read this … Continue reading