This is Phil Town's Typepad Profile.
Join Typepad and start following Phil Town's activity
Join Now!
Already a member? Sign In
Phil Town
On the road across the U.S.
Phil Town is the bestselling investing author of RULE #1 and PAYBACK TIME.
Interests: travel, business, finance, speaking, personal finance, teaching, investing, my iphone
Recent Activity
The key to buy backs ending up in your pocket is that the value of the company is staying the same or increasing over time. If the company is buying back shares at the same rate the value is deteriorating, you're getting nothing except a transfer of cash to ownership. If the value stays the same and the number of shares are halved, then you get the benefit.
1 reply
Joe, with buy backs intrinsic value PER SHARE should go up, not intrinsic value, right?
1 reply
Gabrielle, that was an amazing post! You're doing a great job of digging in on a company you understand and like. Could I suggest that we almost never get a great deal unless there is some sort of Event that has two major qualities: 1) its a big enough event to scare fund managers and get them selling and 2) the issue is going away in 1 to 2 years. Mr. Market is very, very smart since 85% of the money in the market is institutionally managed. That means we're not going to 'discover' something on sale in most small to large stocks (that can happen in the micros and small stocks). While you're learning, just figure that if there is no obvious scary problem, its probably not on sale big time (and 50% off its real value is 'big time' on sale). That said, there will be instances where you really get it and the market doesn't and that's why its on sale. So why is ULTA on sale, in your opinion, assuming Mr. Market isn't stupid.
1 reply
NICE! Thanks, MD.
1 reply
Tom, the pre-req courses are just there to make sure you are not confused by what I'm doing during the PTL. You're a unique case, perhaps. We may never have had someone want to get on the PTL who hasn't been through our courses and is totally qualified. Well, unique cases is how companies improve themselves. I am now working on a solution to this issue and will be back here with an idea for you ASAP.
1 reply
Tom, my apologies for my team not getting you information properly about the Phil Town Live program. Let me respond to your concerns here. First, there is no reason we would suggest you quit your job. Almost all of the PTL students have jobs. I think there was a serious miscommunication on that point. Please send a copy of the email where that was communicated to mblackburn@ruleoneinvesting.com and I'll see to it myself and get back to you. Second, we do not advertise the PTL. It is an invitation only group of students who have the experience to know what I'm doing during the PTL webinars without asking beginner questions, enough capital to invest serious money in looking over my shoulder at what I'm doing with my personal portfolio virtually real time and enough time to devote to a very serious level of investing research. In the PTL I dig into 10K and10Qs, do my industry research and share what I'm thinking week by week about what I'm investing in. I also email the PTL students with my trades as I execute them. Another commenter here suggested that the PTL is not worth the money and that you should just go read Buffett. If its just an education in Rule #1 style investing you're after, I wholeheartedly agree. The PTL is designed to help students who've already done that level of education, who know how to do Rule #1 investing but who like the idea of looking over my shoulder at what I'm doing and hearing me discuss why I'm doing it. The students at the PTL are managing real money and, I believe, have found that doing so is scary and that it helps to have someone like me to bounce things off of and to get ideas from. Let me be clear: The PTL is not a teaching environment per se. It is real life investing. We take students in who are ready for it. We recognize that most people who read and comment on this blog have neither the time, money or interest to take courses from us, much less be in the PTL. That's why we've been creating opportunities this last year or so for some of you to take the three-day live course with me for free. We charge nearly $5000 for that course and we hoped that many of you who don't have that kind of money to invest in an education would enjoy the opportunity to spend time with me learning how to be a solid investor. That course is a pre-requisite for anything other education we do but in fairness to Tom, even at that course we do not discuss or even mention other courses and we sell nothing. It is pure education and I teach nearly every minute of it myself. Again, Tom, I apologize if we've let you down in your attempt to join the PTL. We do have prerequisites, it is not a course we advertise and it is by invitation only. Phil
1 reply
Sue, are you or have you ever been a student in the PTL?
1 reply
mblackburn@ruleoneinvesting.com. Michelle will put you on the phone with an expert on our courses so you can see if there is a fit.
1 reply
Agreed.
1 reply
Its tough to know the truth without all the facts, isn't it? This article downplays the evidence that freed Bill and plays up the prosecution's side of the story. I'm not sure why. The writer surely knows that the jury heard the whole story just from the prosecution's side and still found him not guilty. Bartmann's defense team didn't even put on a defense. The prosecution rested. Then the defense rested. That's how weak the case against Bill was. In fact, the case was so weak against Bartmann that a Tulsa Grand Jury was convened and refused to prosecute him. A second one was convened and they refused to prosecute. So the Attorney General of the US, John Ashcroft, stepped in and insisted they do it a third time and prosecute. To get a jury to go along, they traded testimony that Bartmann knew about this scheme from his partner (the guy who'd already confessed he did it) in exchange for dropping most of the charges, letting his wife keep a bunch of money and a jail term of 5 years instead of 30. The guy took the deal, gave his testimony and the Grand Jury approved prosecution. But in court the guy's testimony didn't stand up at all and Bartmann was freed. Another way to look at this is that the government prosecutors were out to burnish their reputations on the bodies of big time executives and Bartmann was one of the biggest. The author suggests Bartmann destroyed a lot of lives. But the facts are that the Federal Government colluded with Oklahoma to try to destroy a guy and failed and in the process their actions wiped out a multi-billion dollar business and caused the destruction of jobs and capital. And the fact that Bill is back doing CFS II with a whole bunch of his old employees is a pretty good indicator that he was a victim of excessive government prosecutor zeal and a lying partner. One last thing: The whole problem would have gone away if Bill's partner had not been an employee and part owner of CFS at the time he bought the loans. CFS sold loans like that all the time to third parties. The problem was that by being an owner, the purchases were looked by regulators on as a kind of insider trading designed to boost revenue. However, no one has ever suggested the loans were bad (another problem for the prosecution. If the loans weren't bogus, then why would Bartmann need to sell them to himself to 'boost revenue'. He could have sold them to any third party for the same amount. Once the jury heard that, the whole motive disappeared. On the other hand, the motive of the partner who went to jail was to snag some of the better loans for himself … loans that would pay higher than the average. Read the book. The facts are not in dispute. Bartmann didn't even have to put on a defense the case was so bogus. And perhaps one of the lessons here for the government and reporters (and us as individuals) is to be careful about throwing around disparaging terms as a kind of speculation. It takes a long time to build a good reputation and only a moment to destroy it. Now go play.
1 reply
Angela, PBT of 8 years is about what private companies go for and would be considered to be a fair price for both parties. It is a MOS because public companies typically sell for a PE of 15 or higher and a PBT of 11-13 years. A 5 year PBT is awesome and a big MOS.
1 reply
And they get away with it because the good one's deliver an AFTER-FEE return of over 20% per year. And some of them do that for 20 years or more.
1 reply
Awesome. Thanks, Joe!
1 reply
Don't take the Rule #1 Score verbatim. A bad last couple of years will skew an otherwise great set of numbers and turn them red.
1 reply
Michael's comment deleted at his request
Toggle Commented Nov 25, 2013 on ANGELA (guest post) ON SILVER WHEATON at PHIL TOWN
1 reply
They changed the rules again. To invest in a hedge fund where the fund manager shares profits you must now be a 'qualified' investor and have a net worth exclusive of home of at least $2 million. Are you happy that the SEC is protecting you from the risks of investing in a hedge fund or do you think you are old enough and mature enough to make up your own mind about what you do with your own money? Just asking.
Toggle Commented Nov 25, 2013 on ANGELA (guest post) ON SILVER WHEATON at PHIL TOWN
1 reply
Well said, Garrett.
Toggle Commented Nov 25, 2013 on ANGELA (guest post) ON SILVER WHEATON at PHIL TOWN
1 reply
No vid?
Toggle Commented Nov 21, 2013 on ANGELA (guest post) ON SILVER WHEATON at PHIL TOWN
1 reply
Good idea!
Toggle Commented Nov 21, 2013 on ANGELA (guest post) ON SILVER WHEATON at PHIL TOWN
1 reply
This is hard work but absolutely required. You learn so much about a company if you start back 5 years and read the transcripts forward. And take notes. Do they DWYSYWD (DO WHAT YOU SAY YOU WILL DO)? Do you understand the business? Remember this: You EARN high returns. If you don't do the work, you have no right to expect better returns than the average guy in the market.
Toggle Commented Nov 21, 2013 on ANGELA (guest post) ON SILVER WHEATON at PHIL TOWN
1 reply
Pretty good first try at a head stand.
Toggle Commented Nov 19, 2013 on ANGELA (guest post) ON SILVER WHEATON at PHIL TOWN
1 reply
God bless our partners. They (hopefully) keep us rational. We love to coat-tail but only when we understand the business, its value and have a nice MOS. Coat-tailing just because is stupid. Especially with a guy like Seth - he trades a lot of stocks.
Toggle Commented Nov 17, 2013 on ANGELA (guest post) ON SILVER WHEATON at PHIL TOWN
1 reply
This is quite rational, Angela, and much harder to poke holes in. Now, invert it. Something like this: The management team was wrong in a big way indicating they were clueless when they thought they weren't. Now, again, they think they know what they are doing by setting up refundable call options on a mine but they could easily find that promising feasibility studies do not guarantee results and get burned again. See if you can make an even better case against SLW than you made for it. Try your best to destroy your original story. The goal here is to have a story so strong you can't unravel it. The problem you face is that the SLW story may be very easy to unravel, something you already realize by categorizing this one in the Risky Biz category. This is a wonderful way to learn, by the way. Do the work, get criticized, re-do your due diligence and keep digging until you realize you either have come to be quite solid in your knowledge of that industry OR its not an industry and business you can get solid in. Either way you win.
Toggle Commented Nov 16, 2013 on ANGELA (guest post) ON SILVER WHEATON at PHIL TOWN
1 reply
Good question, Joe. I know why I'm out. But Seth is Seth and has his own reasons. Perhaps he will tell us soon.
Toggle Commented Nov 16, 2013 on ANGELA (guest post) ON SILVER WHEATON at PHIL TOWN
1 reply
That is one great memo. I agree with Howard down the line except for his conclusion that we're in for a nice ride for a while. I'm agnostic. "I have no opinion". I'll just let the big guys show me what's what and meanwhile keep looking for a steal.
Toggle Commented Nov 16, 2013 on ANGELA (guest post) ON SILVER WHEATON at PHIL TOWN
1 reply