If you’d like to avoid the subscription price tag for Portfolio Reports, then much of that data can be gleaned by looking directly at the public filings (e.g., SEC Form 13-F) that institutional investors have to make.Portfolio Reports lists the buying patterns of such luminaries as Seth Klarman of Baupost, Lou Simpson of GEICO, Marty Whitman of Third Avenue, Peter Cundill of the Cundill Group, Bruce Sherman of Private Capital Management, and Warren Buffett It gleans this information from the various filings that institutional investors are required by law to make. It lists the 10 most recent stock purchases by 80 of the top value managers.

There is a publication called Portfolio Reports (that is published monthly.The ones with the largest drops are likely the most distressed This list of 40 stocks routinely shows price drops of 20 percent to 70 percent over that period. It is another terrific indicator of distress. Value Line publishes a weekly summary of the stocks that have lost the most value in the preceding 13 weeks.

Martha Stewart’s prison sentence clobbered that stock For example, Tyco’s stock collapsed when the Dennis Kozlowski scandal was front and center. Many of these news clips reflect negative news about a certain business or industry. If you read the business headlines on a daily basis, you’ll find plenty of stories about publicly traded businesses.How do we get a list of distressed businesses or industries? There are many sources, but here are six to begin with:.Markets aren’t fully efficient because humans control its auction-driven pricing mechanism It is this critical gap that is responsible for Mr. However, there is a huge difference between mostly and fully efficient. Trying to figure out the variance between prices and underlying intrinsic value, for most businesses, is usually a waste of time. IT’S BETTER TO BE A COPYCAT THAN AN INNOVATOR.LOOK FOR LOW-RISK, HIGH-UNCERTAINTY BUSINESSES.BUY BUSINESSES AT BIG DISCOUNTS TO THEIR UNDERLYING INTRINSIC VALUE.It is these nine principles that constitute the Dhandho framework:īUY SIMPLE BUSINESSES IN INDUSTRIES WITH AN ULTRA-SLOW RATE OF CHANGEīUY DISTRESSED BUSINESSES IN DISTRESSED INDUSTRIESīUY BUSINESSES WITH A DURABLE COMPETITIVE ADVANTAGE-THE MOATīET HEAVILY WHEN THE ODDS ARE OVERWHELMINGLY IN YOUR FAVOR These are my notes which I intend to go back to later.

It is not a complete summary of the book. Later I turn those highlights into a blogpost. Note: While reading a book whenever I come across something interesting, I highlight it on my Kindle.

Dhandho investor summary