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

The DIY Investing Podcast

Release Date: 10/27/2019

103 - The Deflation Myth show art 103 - The Deflation Myth

The DIY Investing Podcast

The Deflation Myth has been accepted primarily because economists have used false assumptions in their analysis and because debtors, namely world governments, tend to hold massive political and cultural power. It is in their best interest to convince you that deflation is bad so that they can inflate away their debts. Yet, most investors are harmed more by inflation than they would be by deflation. 

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102 - Don't use Enterprise Value - Here's Why show art 102 - Don't use Enterprise Value - Here's Why

The DIY Investing Podcast

Be conservative when valuing companies. Don't give managers credit where they don't deserve it. Enterprise value should only be used when companies hold debt. Yet, you should only buy companies with net cash.

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101 - How to find good stock ideas (FAQ) show art 101 - How to find good stock ideas (FAQ)

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The best way to identify good stock ideas is to copy a watchlist of investors you trust and respect. Their best ideas can form a strong foundation for your watchlist.

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100 - Special Edition: Reflecting after 100 episodes show art 100 - Special Edition: Reflecting after 100 episodes

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As I reflect on my first 100 episodes of The DIY Investing Podcast, I want to hear from you my audience. Share your thoughts and feedback so the next 100 episodes are even better.

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99 - OTC Manual Database with Jan Svenda and David Flood show art 99 - OTC Manual Database with Jan Svenda and David Flood

The DIY Investing Podcast

I interview two guests in today's show: Jan Svenda of SvendaManual.com and David Flood of ElementaryValue.com. We discuss their new product, an OTC Manual database for finding stock ideas.

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98 - Value Stock Geek Interview: Wonderful Companies at Wonderful Prices show art 98 - Value Stock Geek Interview: Wonderful Companies at Wonderful Prices

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In my third interview with Value Stock Geek, we discuss his effort to transform his investing process in light of COVID-19 and recognition of past mistakes. His new goal is to buy wonderful companies at wonderful prices. No compromises.

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97 - Engineering Mental Models: Why Engineers make good investors show art 97 - Engineering Mental Models: Why Engineers make good investors

The DIY Investing Podcast

As an investor with an engineering background, I believe I bring a unique perspective to investing in businesses. The mental models: margin of safety, backup systems, scale, failure points, and leverage originate in engineering are useful for investors.

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96 - The difference between 96 - The difference between "Right" and "Useful" for investors

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Your goal as an investor is not to be the most accurate in your calculations or to do everything the 'right' way. Your goal is to make money. Sometimes the right way technically leads you to make worse decisions.

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95 - How to build conviction in a stock idea (FAQ) show art 95 - How to build conviction in a stock idea (FAQ)

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Conviction is a function of opportunity cost, the margin of safety, position-sizing, and upside. Your required conviction is determined by opportunity cost and position sizing. You increase conviction by improving the margin of safety and upside potential.

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94 - Japanese companies are worth less than American companies, All Else Equal show art 94 - Japanese companies are worth less than American companies, All Else Equal

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This podcast episode outlines some key differences between Japanese culture and American culture which influence how investors should value Japan based stocks versus United States based stocks. Shareholder primacy and culture are important.

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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.