UOS got better again

In May 2013, I commented on UOS in this blog post.

The interest generated by that post was delightful.

Almost one year later, we get to see yet another UOS annual report.  Without going into the boring details, I would just highlight the increase in book value of 22%.  There are also the piddling matters of cash increasing nearly 100%, and the increase in investment properties.  Not to mention a nice dividend paid to shareholders for the full year.

This is the thing that puzzles me- UOS would nearly qualify as a Graham-type cigar butt net-net investment, and yet its historical growth rates for the past 2 decades would have put most so-called growth stocks to shame.

  Disclosure: I own shares in UOS.

Disclaimer: the content of this post is not to be relied on as financial advice.  It contains my personal opinion only, plus facts that I cannot verify to be accurate.  Do your own research and seek financial advice where appropriate. I have made many mistakes in the past, and will continue to do so in the future.

Everybody Loves Buffett

Everybody loves Warren Buffett.

We probably have a small contingent of young investors today who all wants to be Buffett when they grow up.  I hear of investors advocating Buffettism and also Mungerism, looking for the great company with a great moat and hoping to sit on it for decades making great compounding returns. And then plonking a huge chunk of the portfolio into a few names. Diversification is out, concentration is in, that sort of thing.

It is good to aim high, but we have to learn to crawl before we learn how to walk. Personally, I think it is much more realistic to start off with a low hurdle. The genesis of value investing started with Ben Graham and cigar butt stocks. From this genesis, there is actually a continuum towards the Munger/Buffett great business at fair value method. And the continuum is not necessarily linear, but presents various pathways.

Buffett, in his legendary article on the super-investors of Graham & Doddsville, referred to an investor who made 21% per annum (16% per annum net of fees) for a total of 46 years. 21% per annum compounding for 46 years is stupendous performance. If you do not believe me, just plug in quick numbers into a spreadsheet or an online calculator and see what $1000 is worth after 46 years of compounding at 21% per annum.

This performance was achieved with huge diversification of portfolio in many stocks, and the basic premise was just to buy cheap and sell at fair value, and protecting the portfolio with wide diversification. That was it. Remember simplicity, consistency and valuation?

The Super Investor in question was, of course, Walter Schloss (RIP).

So without further ado, I present:

Sixty Five Years on Wall Street- remarks by Walter Schloss

16 Factors to Make Money in the Stock Market

Forbes Article- Experience