Over the years I have met some truly awesome people. Mrs. Accountant and I used to frequent science fiction conventions and stalk authors I enjoyed reading. You would be surprised how many were thrilled (they acted thrilled) to break bread with the missus and me. Many of my heroes have either died or are getting up in age. I miss Zig Ziglar; I have a picture of me shaking hands with him over breakfast. Tony Robbins was busy as heck but still took time to talk. Beside my office desk I have a picture of me, Mrs. Accountant, Newt Gingrich, and Mark Green. Newt was Speaker of the House at the time and he was promoting his Contract with America. For the record I vote both side of the isle; it just happens the opportunity to have my picture taken with the Speaker of the House came up so I took it. Also sat at a round table with the Speaker and five other people in Green Bay talking politics and taxes.
There are more people I would love to meet. Unless you run in a tight group you may not know many of these folks. It’s okay. You can look them up. Most are writers; writers always thrill me. I met Pete Adeney (Mr. Money Mustache) a few years back and as readers here know I am now his tax guy. The problem with meeting some people is it costs money. Either you need to attend a conference and there is little opportunity to spend any real time with the mark, ah, I mean gentleman, or people like me never have a real chance for a sit-down lunch with the victim because the victim is too famous.
From an early age I practiced picking out conversations from a crowd. It’s a neat little trick for a business owner to have. When you think I cannot hear you I may actually be listening in closely. Conversation in a crowded room takes skill with multiple conversations amped in volume so you can be heard over the cacophony. Picking out a select voice from across the room takes a lot of practice.
At a recent social event I put my talent to good use. The trick is to focus on only one voice. Focus is the key. I move from voice to voice, focusing on the words until I find one I find interesting. I do all this while talking with my friends. You would be amazed at what people say in a crowded room when they assume only their little group is listening. On this particular event I honed in on a man talking about people he does not trust. I found this interesting so my radar swung into action, focusing on the conversation the two men were having while maintaining an intelligent conversation with my mates. So I don’t interrupt, I never make eye contact with the people I am focusing on. The man continued, “I don’t trust people who act like they are perfect; they never smoke weed or drink or do anything wrong.” He went on a bit more before changing the subject. The new subject did not interest me, so I moved on. But by now I was mulling what the man had said.
In the course of my work I am frequently asked to place a value on a business a client wants to sell or acquire. There are several ways to determine value in such situations. Today we are going to focus on the value of listed companies (stocks). Warren Buffett has stated most people should drop their money into an index fund and let it ride. If you are like me you follow Warren’s advice, but invest a portion of your money in individual stocks anyway.
There are numerous books on Warren Buffett and his style of investing. These books glance over the process Warren uses, focusing on tidbits of advice Warren has given over the years. Reading Graham and Dodd’s Security Analysis exposes how difficult it can be to value a company. Since Graham and Dodd, our understanding of value creation has grown and Warren Buffett uses the new analysis tools in his investing style.