Tuesday, November 28, 2006
ETLT and CXTI have been soaring higher fairly steadily. BKBO is climbing back up. ETLT announced some sort of bamboo farm thing on their website, which doesn't make me happy. I really don't like these odd things they're looking at. I sold some of my ETLT... at a lower price than it's at now. The company has always been a bit close to the boundary of weirdness for me. I think it's worth owning, but I just want to be in a position where if trading halted and bugs crawled out of the woodwork that it wouldn't be terribly damaging. I had bailed out completely back here, but then bought back in 4 days later at a higher price when I found that enough of the red flags were non-issues.
This time, I only sold some of the shares and shifted much of the money into BKBO, which has gone up, but not as much as ETLT. It's the potential price I pay for not worrying so much. I wrote a bit more here.
Strathmore and CXTI are becoming very large holdings percentage-wise, which is fine.
1) Pick through a lot of the details in SEC filings of these companies. There will be a lot of stuff you won't understand, but that's what provides the motivation for learning. I don't know how much you know about business and accounting, but for me, I learned a great deal about accounting by reading the book The Accounting Game: Lessons from the Lemonade Stand. More than anything else, it gave me the best intuitive understanding of how financial statements work and how they map into what's actually going on within a business. It's easy to get put-off by the childish way the book is written, but I found it extremely valuable. My reading list has a lot of other good books. The 22 Immutable Laws of Marketing is another great one that applies to almost everything.
2) Focusing on a limited area is better than wide coverage of lots of things. Specialization and focus can make your content very valuable to a small number of people and I've found it to be a better learning experience. The alternative of covering a lot of ground without much detail is that you end up with a lot less and it's not very useful to anyone.
3) If you look at one of the people I greatly admire, Charles Darwin, you'll see that he spent probably 95% of his time collecting and organizing facts and only then would he spend 5% on looking for conclusions which fit those facts. Right now, your blog presents the conclusions without much of the information which would justify those conclusions.
You mention Jim Cramer on your blog. A lot of investors who follow the methods of Warren Buffett and Ben Graham think very badly of Jim Cramer. I'm actually quite amazed by the guy. He keeps up with a huge amount of things and has done a vast amount of studying of businesses and stocks. I've followed him somewhat over the years and I think Mad Money is the perfect niche for him. He provides very specialized, knowledge-intensive entertainment for the investment community, something that very few people are capable of doing very well.
But anyway, good luck with your blog.