Is Mason Graphite a True Value Investment?: A Lesson in the Critical Importance of Research
About this book
I am a ghost writer. I died on September 21, 1976, at age 82 in Aix-en-Provence, France. Of course, there are those who claim that there is nothing after death. How, then, do you explain that I am alive and well and teaching at Olinger University in the Finance Department. I am teaching courses on value investing. I have the good fortune and great good luck to be visited frequently by my former students William J. Ruane, Irving Kahn, and Walter J. Schloss. My book The Intelligent Investor has been described by one well known billionaire (one of my best students) as "the best book about investing ever written." Now I’m going to make you one my very best students! Here’s my take on value Value investing is a stock market investment strategy that finds undervalued companies. It is not "buy low, sell high." It is not "my advisor recommends this company." It is not "my friend has a hunch about this company." It is not "this company is a bargain compared with other companies in its market." It is not "this company is taking advantage of a scientific breakthrough." It is not "this company flips other companies." It is not "This company uses computers or computer science to create wealth." To find a true value investment, a value investor must do extensive, targeted research. Research, research, and more research. Research should A need in the marketplace that is not realized by the large majority of market investors. A niche in the marketplace that has a product most customers need but are unaware of that need. A need that is "real"; that is, the need must be filled by operating on commodities or actual materials that will produce a salable product in a targeted market. Service companies or production based on numeracy are not valid value investments. A company that is fully capitalized. The total cost of production must be within a realistic budget. The differential between the selling price and the cost of the product must be able to withstand vulnerabilities in the marketplace. A product or niche that can attract investors. A company whose main strategy is long-term. A management team that runs the company with years of experience in the market where the need exists. A management team that understands risks, opportunities, and competition. A management team that understands effective decision making, core competencies, controlling an organization, finance, and logistics. A management team that has excellent relations with all aspects of the customers, vendors, unions, workers, regulators, investors, marketers, the local community, local, state, and national governments, law makers, and financiers. In a recent interview with Bloomberg News, Jim Rogers said, "Graphene is as important to the world as electricity, as the Internet." Although I pride myself on knowledge of all things economic, I had never heard the word "graphene" and had no idea what "graphene" was, I began to do a little digging to find out as much as I could about graphene. I found out that many people agree with Rogers' assessment. Rogers also said that Mason Graphite is the best graphite play. My question is Is Mason Graphite a true value investment? This e-book is a report on my attempt to answer that question with a lesson in the critical importance of research.