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48 - David Flood Interview: Dark Stock Investing ($PLWN, $BVERS, $NTIP, $MIRI, $HMGN)

The DIY Investing Podcast: Value Investing | Fundamental Analysis | Mental Models | Business Management

Release Date: 10/27/2019

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The DIY Investing Podcast: Value Investing | Fundamental Analysis | Mental Models | Business Management

In this episode, I interview Value Stock Geek and we discuss his investing strategy which involves buying cheap companies with good balance sheets. For ValueStockGeek value is found in a low EV/EBIT multiple. This is the Acquirer's Multiple as named by Tobias Carlisle.

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48 - David Flood Interview: Dark Stock Investing ($PLWN, $BVERS, $NTIP, $MIRI, $HMGN) show art 48 - David Flood Interview: Dark Stock Investing ($PLWN, $BVERS, $NTIP, $MIRI, $HMGN)

The DIY Investing Podcast: Value Investing | Fundamental Analysis | Mental Models | Business Management

My interview with David Flood of Elementary Value focuses on investing in dark stocks. Dark stocks do not report public financial statements to the SEC. Many of these companies are deep value plays that offer attractive rates of return to investors willing to do a little bit of extra research. Scuttlebutt and fundamental analysis are key topics.

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The DIY Investing Podcast: Value Investing | Fundamental Analysis | Mental Models | Business Management

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The DIY Investing Podcast: Value Investing | Fundamental Analysis | Mental Models | Business Management

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The DIY Investing Podcast: Value Investing | Fundamental Analysis | Mental Models | Business Management

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The DIY Investing Podcast: Value Investing | Fundamental Analysis | Mental Models | Business Management

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The DIY Investing Podcast: Value Investing | Fundamental Analysis | Mental Models | Business Management

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Show Outline: Interview with David Flood of ElementaryValue.com

The full show notes for this episode are available at https://www.diyinvesting.org/Episode48

Part 1: David Flood's Investing Process

  • How have you developed as an investor over time?
  • David Flood's Investing Process:
    • Basket of Stocks (20-30+ positions - 2.5-5% each)
    • Overlooked stocks (Low liquidity, sub $10 million market cap)
    • Deep Value
    • Price charts to identify stocks at all-time lows and long-term base
  • Investing in Net-Nets vs Nano-Cap Chart-based deep value
  • SEC seeking to ban quotation of Dark Companies
  • Wants to find and own companies no one else has written up

Part 2: Example Stocks

  • Pinelawn Cemetary ($PLWN) - Dividend yield of 9-10%, nearly zero liquidity
  • Beaver Coal Co. ($BVERS) - Misunderstood land company 50,000 acres diversified with coal, gas deposits, timberland, log cabins, and mobile home parks
  • Network-1 Technologies ($NTIP) - A net-net with catalyst. Cash bucket patent troll.
  • Mirriad Advertising (LON: $MIRI) - Video insertion tech company partnered with Tencent
  • Hemagen (HMGN) - Market Cap: $155k USD. Dark since 2013.