Three great points; another reason to concentrate on EV instead of market cap, cash is more a risk than an asset and show us the money. Stop hording our cash! Graham recommending putting the dividend payout to a vote each year and management having to justify any capital expenditures. I implemented capital investment management in, gosh at least a dozen companies, and truth be told not one really had a tight grasp of or even a good process for managing their major expenditures.

I can’t help but drift into a pirate accent when I maul the pronunciation of CAGR. I’ll try to slip CAGR in during my first ever podcast. Compound annual growth is one of the cornerstone concepts of investing and wealth. I first mentioned it in this post, my worst investment in 2008, but have never explained it.

Benjamin Graham’s Lost Magic Formula and other Checklists.

The ten best Australian business sites for news, data and opinion on Australian companies and the economy.

Over at PazzoMundo I noticed the following comment, which is typical of numerous comments and posts I’ve been reading lately. “This market is exasperating – I’ve been expecting the rally to lose steam for a while now but it seems that it’s quite happy to ignore economic reality”.

In the Intelligent Investor Benjamin Graham said “In the short-run it’s a voting machine, but in the long-run it is a weighing machine.” For some reason most market participants focus on the second part of that statement, they concentrate on the weighing maching.

To buy low you should be buying now.

Today I give thanks to my dad. When several people told me what I wanted to do was impossible and I was too late, it was my dad’s voice reverberating in my mind which drowned out their negativity. My dad wise saying, “there is no such thing as can’t” , was my life jacket in the sea of negativity which four authorative people cast me adrift in.

Since the success of The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb, I have wondered how many readers have actually seen a Black Swan. For those who haven’t seen one, here I took this photo today as I played with my kids at Newport Lakes. I wonder if anyone had ever used a Black Swan in a turducken.

As these beautiful water fowl are relatively common in my neck of the woods I have always been bemused by the title of The Black Swan. I do know the underlying story of the phrase, unfortunately stupid arrogant white guys are quite as rare as these fowl. Anyway, I thought a better title would be The Honest Banker.

My intelligent and gorgeous wife once told me we should sell company A, which we owned, and buy company B as they were the same price and company B was clearly worth more. My interest was peaked; however, the great opportunity was a mirage, as she was only looking at the share price and that does not tell you the price tag on a company.

It’s over a year since I read any of the articles I linked in yesterday piece on the Kelly formula and portfolio management. After reading the brilliant article by Michael Mauboussin Size Matters – The Kelly Criterion and the Importance of Money Management I realised that both he and I did not explain how to actually use the Kelly formula in sizing individual positions. So let’s try to fix that clearing ommision.