# Roger Montgomery - Value.Able thoughts?



## GCrenegade

Curious to see if anyone has picked up this book and their thoughts on it? I got my copy last week and so far it is drilling into me how important fundamental analysis is. I am still relativley new to investing but feel that his approach is the one that I am most comfortable with!


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## noie

I thought he was a Benjamin Graham like valuer 

Does he actually talk formulas ? and figures in his book or is it all hight level stuff?


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## McCoy Pauley

Got my copy earlier this week.  Fairly well written though it grates that Roger quotes so often from Buffett and Munger, given that I've just finished _The Snowball_, which seems to be the source of his quotes.

I'm only into Part II, so I'm not far into it.  Part I seemed to be very heavy-handed about the message Roger is trying to impart to his readers.  Fair enough, but it did become a little monotonous and I was hanging out to start actually learning his methods.


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## McCoy Pauley

noie said:


> I thought he was a Benjamin Graham like valuer
> 
> Does he actually talk formulas ? and figures in his book or is it all hight level stuff?




Yep, Ben Graham gets a lot of mentions, too.

I'm only about a third of the way through it, and he's basically talked about the importance of return on equity.  To back that up, he's used some fairly basic arithmetic and some tables setting out simple balance sheets.


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## noie

Thanks for the info , keep us informed, its a pain in the a$$ to get a copy sent here from Aus, so will only pick it up if it posts gains in the final 1/3


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## DeCal

Considering this is very relevant I figured you guys would be interested to read Roger's interview with s2t.

An interesting part was:



> What educational books would you recommend for beginner and intermediate investors?
> 
> Everything about value investing.  Read the works of Graham, Munger and Buffett. And read all the work on Valuation theory available in the Journal of Finance. The only possible short cut is to learn from those who have a demonstrated track record of success.




(full interview: http://student2trader.com/trader-interviews/fundamental-analysis )


The Journal of Finance was something I hadn't heard of before. Has anyone ever looked into it? I'd be interesting to hear more about it.


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## McCoy Pauley

Finished Value.Able last week.  I thought that the book picked up interest as we went along, particularly as we delved into what criteria Roger applied to parse his possible investment destinations and how he calculated the company's intrinsic value.  Written quite well and there is a distinct lack of formulae used in the book - basically, the determination of the company's intrinsic value is based on a simple arithmetic approach, but Roger does keep to himself the "secret herbs and spices" of his valuation tables that he uses to assist in calculating the company's intrinsic value.

He's been challenged or asked for further background information on the valuation tables he uses in the book and his response is on his blog, together with a collection of resources which Value.Able readers have asked be collated in the one spot to assist in applying his methods.


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## Laohu

DeCal said:


> Considering this is very relevant I figured you guys would be interested to read Roger's interview with s2t.
> 
> An interesting part was:
> 
> 
> 
> (full interview: http://student2trader.com/trader-interviews/fundamental-analysis )
> 
> 
> The Journal of Finance was something I hadn't heard of before. Has anyone ever looked into it? I'd be interesting to hear more about it.




Hi DeCal

Got heaps of really interesting stuff, though it is fairly heavy reading; I got a heap of useful papers from there re Montgomery's formulas https://www.afajof.org/

Enjoy


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## pjsh

one of roger's principles is that you should always buy a good quality stock when it's undervalued.

i bought BHP and CBA before i had heard of this simple idea - i.e. did not take into account buying at a discounted price to intrinsic value.

i've never sold before. 

is it worthwhile selling when these stocks return to the price i purchased them for - 41.5 and 55.1? then i could invest more shrewdly in 2011, targeting good A1 businesses at prices below their premium. how much tax do you pay when selling stock?


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## robusta

pjsh said:


> one of roger's principles is that you should always buy a good quality stock when it's undervalued.
> 
> i bought BHP and CBA before i had heard of this simple idea - i.e. did not take into account buying at a discounted price to intrinsic value.
> 
> i've never sold before.
> 
> is it worthwhile selling when these stocks return to the price i purchased them for - 41.5 and 55.1? then i could invest more shrewdly in 2011, targeting good A1 businesses at prices below their premium. how much tax do you pay when selling stock?




You only pay tax on capital gains.

You will have to make up your own mind on selling but I would start by looking at projected rises in intrinsic value for these stocks. Also remember market sentiment can change quickly. I bought CBA in Feb for about $52.00 it went to $60 then back to about $48.50.
 "Be greedy when others are fearful and fearful when others are greedy"


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## UBIQUITOUS

GCrenegade said:


> Curious to see if anyone has picked up this book and their thoughts on it? I got my copy last week and so far it is drilling into me how important fundamental analysis is. I am still relativley new to investing but feel that his approach is the one that I am most comfortable with!




I've got time for Roger. He certainly knows 'his' stuff. You should bear in mind that he is focused on balance sheet based valuations which don't apply to spec stocks which might have high debt to equity ratios, no return on equity but have forecast earnings growth in future years.  for example, I heard him on 'Your money your call' saying that CuDeco was worth zero! Far too rigid a view in my opinion.

When it comes too fundamental analysis, its 'horses for courses', and never forget that it is an art but portrayed as a science


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## pjsh

roger writes in his latest blog entry:

BHP: 'the fall in the business’s profitability has likewise seen my 2010 valuation fall from $34-$38 to around $26-$30 per share, or a total value of $145b to $167b (5.57 billion shares on issue)'.

he's skeptical that BHP will make A$22b profit in 2011, but if so would value the company at $45-50. 

I think I will sell once it gets past my purchasing price of $41 and reinvest - possibly Finbar (FRI).


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## robusta

UBIQUITOUS said:


> I've got time for Roger. He certainly knows 'his' stuff. You should bear in mind that he is focused on balance sheet based valuations which don't apply to spec stocks which might have high debt to equity ratios, no return on equity but have forecast earnings growth in future years.  for example, I heard him on 'Your money your call' saying that CuDeco was worth zero! Far too rigid a view in my opinion.
> 
> When it comes too fundamental analysis, its 'horses for courses', and never forget that it is an art but portrayed as a science




Everyone needs to find their own investment style/system. For me keeping away from spec stocks is not a problem. I would rather follow Valuable's formula of finding great businesses with a rising intrinsic value and buying them with a significant margin of safety. The main problem I have had is learning patience.

Not sure if it is a art but I would agree it is not a exact science.

To mangle Charlie Munger/Benjamin Grahame quotes as long as my guess is better than Mr Market's I should be a succesful investor.

A lot of people may be very succesful with spec stocks, trends, technical analysis... but for my money I will stick with the concepts outlined in Valuable.


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## ubtheboss

I've been practicing using Roger's method by plugging in numbers from annual reports.  So far so good.  However these are retrospective valuations.  I want to start calculating my own forecasts for a given stock price.

Roger says in his book that he just typed in 'analyst research for XYZ company' into Google and up popped all the info he needed- forward estimates for equity, ROE, EPS and dividends.

I've spent hours on the web trying to find this information for free but all I can find are websites charging an arm and a leg.  Fair enough, that's their business but where did Roger find his figures?  

Can anyone suggest a free online resource for forward estimates of the figures mentioned above?  Does such a resource exsist?

Thanks in advance!


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## ubtheboss

So I spent a few more hours trying to track down the necessary raw data to forecast an intrinsic value for a share price based on Roger's methods.  Not bloody easy but I think I have something.

I took a crack at valuing DTL- Data#3 Limited.  For 2011 ending equity I used an average of the increase in equity they've had each year for the last 5 years (1.5 mill) to get a figure for 2011 (28.5 MILL).

This is what I got

DTL- Data#3 Limited

10% RR
EOFY 2010- 12.70
EOFY 2011- 13.95

12% RR
EOFY 2010- 9.86
EOFY 2011- 10.74

14% RR
EOFY 2010- 8.73
EOFY 2011- 9.53

Now I'm trying to wrap my head around the logic as I look at those numbers.

If my required return (RR) is only 10% then the intrinsic value of the stock by the end of this FY will be 13.95

If my required return (RR) is 14%then the intrinsic value of the stock by the end of this FY will be 9.53

The difference in RR is only 4% but the difference in intrinsic value is 44%

Huh?!? 

Can anyone help enlighten me on the logic?

Cheers!


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## Skip1jz

ubtheboss

RR return is an opinion of the person doing the analysis. The more stable the company in respect of return, organic growth, stability of earnings, management etc. the lower the RR can be. If the company's earnings are all over the place, they raise capital consistently or have a small trading history etc. you should increase the RR, effectively it is your margin of error for intrinsic value. An easy example of a 10% RR is WBC, an example of a 14% RR is midcap mining company whose profit can be highly dependent on commodity prices, this is my opinion.


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## Assasin

Certainly enjoying this book allthough it is heavy reading for an L Plater. Main thing I'm getting out of it is the need and discipline to remove all emotion out of trading and actually put in the research. No different to any other quest in life.


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## ubtheboss

Skip1jz said:


> ubtheboss
> 
> RR return is an opinion of the person doing the analysis. The more stable the company in respect of return, organic growth, stability of earnings, management etc. the lower the RR can be. If the company's earnings are all over the place, they raise capital consistently or have a small trading history etc. you should increase the RR, effectively it is your margin of error for intrinsic value. An easy example of a 10% RR is WBC, an example of a 14% RR is midcap mining company whose profit can be highly dependent on commodity prices, this is my opinion.




Thanks very much Skip!  I appreciate you taking the time.  I was under the impression that the margin of safety was on top of the RR.  Thanks again.


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## ROE

ubtheboss said:


> I've been practicing using Roger's method by plugging in numbers from annual reports.  So far so good.  However these are retrospective valuations.  I want to start calculating my own forecasts for a given stock price.
> 
> Roger says in his book that he just typed in 'analyst research for XYZ company' into Google and up popped all the info he needed- forward estimates for equity, ROE, EPS and dividends.
> 
> I've spent hours on the web trying to find this information for free but all I can find are websites charging an arm and a leg.  Fair enough, that's their business but where did Roger find his figures?
> 
> Can anyone suggest a free online resource for forward estimates of the figures mentioned above?  Does such a resource exsist?
> 
> Thanks in advance!




most of that information exist in annual reports but I say most people using this sort of method will eventually failed

Predicting more than 2 years earning is more of an art and you better know the business pretty well to even do that..

it's not a science this valuation stuff, it's more of an art

it been around for decades, crunching number is very easy 

understand the business and know what it takes to buy when others  chanted with sell is another story.

successful in this field required research, conviction, independent thinking and plenty of patient  

Success in this field I wouldn't call it easy but I wouldn't called it hard either

it required certain temperament, a bit of work cut out and Did I say plenty of patient, sometimes the best move involve sitting on your ass  

my 2 cents and I think most people can do well following good principles and disciplines...


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## ubtheboss

Thanks ROE.

Roger's work is a great starting place but I understand that is not the final stop in a decision to buy or sell a share.  Debt position, management record, cash flows, etc. are also some of the things to consider.

All you can do is your best research.  In the end it's a judgment call.

I highly recommend his book with two caveats:

- he doesn't reveal the exact method he uses to value stocks.  He gives you a "leg up" but doesn't give away his whole method.  Use what he gives you and then research some of the things I mentioned above.
- finding all the raw data you need to use Roger's calculations is not easy.  Most of it you can find if you dig around enough.  I find the hardest numbers to find are a broker's forecast of future NPAT and future total equity.

If you know where to find those two numbers let me know


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## WTC

Rogers book is 1 page short, he needed to  include a fully worked example on Intrinsic Value including how to calculate IT value in the years ahead.
I went to a presentation last week in Chatswood to hear Roger speak, he told us he valued TLS at around $2-30/2-50, I did the calculations from morningstar info step by step from the book and got $3.68!
It looks as though I wasted $45, if any one has the book, have you done a IT value on TLS from the 2010 figures? If so, what did you get?
Your input would be greatly appreciated as I am mighty frustrated to get a so called simple equation so wrong.


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## robusta

WTC said:


> Rogers book is 1 page short, he needed to  include a fully worked example on Intrinsic Value including how to calculate IT value in the years ahead.
> I went to a presentation last week in Chatswood to hear Roger speak, he told us he valued TLS at around $2-30/2-50, I did the calculations from morningstar info step by step from the book and got $3.68!
> It looks as though I wasted $45, if any one has the book, have you done a IT value on TLS from the 2010 figures? If so, what did you get?
> Your input would be greatly appreciated as I am mighty frustrated to get a so called simple equation so wrong.




The thing to understand with future valuations is there is a fair bit of art involved. You have to rely on analyst forecasts of ROE, equity per share, net profit and shares on issue.
As for the valuation of TLS either you or Roger may be right there are so many variables you need to factor in it would suprise me if your valuation matched Rogers.

http://www.businessspectator.com.au...governm-pd20100923-9K52A?OpenDocument&src=sph

Personally I would not bother working on TLS valuations as it is not the type of business I would like to own.

I think Roger admits in the book that valuations are not perfect but to quote Charlie Munger when asked why he was such a succesful investor "because my guesses are better than yours"


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## Cakeman

ubtheboss said:


> Thanks ROE.
> 
> 
> 
> - he doesn't reveal the exact method he uses to value stocks.  He gives you a "leg up" but doesn't give away his whole method.  Use what he gives you and then research some of the things I mentioned above.
> - finding all the raw data you need to use Roger's calculations is not easy.  Most of it you can find if you dig around enough.  I find the hardest numbers to find are a broker's forecast of future NPAT and future total equity.
> 
> If you know where to find those two numbers let me know




I agree. I purchased the book as well. Whilst i though it was informative, it was hyped up to have his valuation methods explained. While it is touched on over 5-10 pages, i would not say that it is well explained and does lack a lot of information on the formulas

The other problem is finding the raw data (as mentioned above) it is not an easy task and i have access to a few sites with detailed figures.

I think this book is a segway to Roger possibly releasing a subscription based web site which values companies with his formula.

All in all, cant say i am too impressed


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## ubtheboss

WTC said:


> Rogers book is 1 page short, he needed to  include a fully worked example on Intrinsic Value including how to calculate IT value in the years ahead.
> I went to a presentation last week in Chatswood to hear Roger speak, he told us he valued TLS at around $2-30/2-50, I did the calculations from morningstar info step by step from the book and got $3.68!
> It looks as though I wasted $45, if any one has the book, have you done a IT value on TLS from the 2010 figures? If so, what did you get?
> Your input would be greatly appreciated as I am mighty frustrated to get a so called simple equation so wrong.




Hi WTC,

I agree with everyone who has posted after you.

However I decided to take on the challenge of working the numbers on TLS for my own sake as well as yours and others.

I noticed that the numbers quoted around the net- from Commsec, to AFR, to their annual report- for the raw data we need varies.  The annual report should always be your first stop but I even noticed them using numbers they shouldn't have for calculating ROE.

Anyway, the biggest son of a bitch is finding raw data forecast numbers on NPAT and ending equity I have found.  Sorry but I got fed up and I'm not going to try forecasting 2011.  HOWEVER I did do intrinsic valuations for 2009 and 2010.  When you see these numbers you may better understand Roger's estimate.

NB: 
I used for 2009
- EqPS 0.998; POR 0.856; ROE 33.3 (or 32.5% in his Tables)
I used for 2010
- EqPS 1.02; POR 0.895; ROE 31.3 (or 30% in his Tables)

10% RR
EOFY 2009- 3.97
EOFY 2010- 3.51

12% RR
EOFY 2009- 3.17
EOFY 2010- 2.84

14% RR
EOFY 2009- 2.65
EOFY 2010- 2.38

You can see the trend is down sp-wise.  TLS itself says in it's annual report that it sees 2011 EBITDA declining by a high single digit percentage.  If you take that to be 9% (to be conservative) and you treat TLS as a risky stock worthy of a 12-14% margin of safety then you can see around about how Roger got a $2.30-2.50 IV.

It depends on what 2011 NPAT and ending equity forecast numbers he used.  Finding that info on the net is nearly impossible unless some kind soul publishes a broker's report pdf to the net and you find it via Google.

Never say die though! 

Anyway, that's a lot of info and I hope it helps.  It helped me just crunching the numbers and putting it to paper and thinking through it.  Seems us 'Roger Readers' need our own support forum to help us fill in the gaps he left for us.  So far this forum is the best I've found so I thought I'd contribute.

As others have said here, forecasting a share price is not just about putting numbers into a formula.  What Roger has given us IS a massive help but I think we also need to look closely at other things like debt, cash flow, management etc.

I do feel Roger was leading us to believe he was giving us HIS method and that the raw data was easy to find.  To see him then say on his blog that "he doesn't use that formula exactly" or on Facebook that "yes, the raw data is hard to find but he pays for his" seems dodgy.

Oh well, I know more now then I did so I'll stop complaining and just work even harder to educate myself.

Good luck!

Phew...sleep i must


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## WTC

Thank you so much for your replies.

UBthe boss, I used 10% for my calculation in 2010 to get $3.68, I see you got $3.51, that at least tells me I am not doing anything drastically wrong.

I just think he could have been more diligent on this section on Intrinsic Value, after all on the front page he says the following "How to value the best stocks", not to get the valuation wrong by 33%%!

I feel the book fails to deliver on its promise, it is so subjective, I think Roger in a new edition would address this all so important chapter differently.

Would I recommend it? No, I have plenty of books on trading/investing I thought this was going to give me something concrete, not  leave me scratching my head.


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## Cakeman

Valu.able may be trading above it's intrinsic value by as much as 75%. With no substantial year on year profits and a declining ROE I rate it as a C5


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## theog

I watched one of Roger's podcast from the asx website and was keen to try and apply his intrinsic value calculation.

I found it really hard to source some of the company information. Or at least found it a very manual task. Going through each years annual report from the asx announcements and gathering the information is not my idea of fun.

Surely historical company figures are aggregated and available online. I just cant find a site that has this information. For example finding the EBIT for the last ten years for Woolworths.

I'm guessing this is a paid service? Can someone guide me to the right place?

Theo


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## rockhound308

I have to admit is still haven't finished the book.  I guess i have to admit i don't have the patience for investment books or Rodgers long term value investing, but his valuation technique is still defiantly has its uses for assessing companies for my type of trade. 

Its a pitty Rodger is so cagey/touchy about the formulas for the tables in the book. I thought that was what i was paying for in the book, see the deleted posts on his web site, search google web archives.

The table for the company that retains no earnings is simply Requited Rate of Return / ROE, any one have any thoughts on the other table where company retains all earnings??

 I use data from westpac online trading (morning star) and cut and paste to a spreadsheet, takes about 20 seconds, the other online brokers have similar.

rockhound


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## ubtheboss

I've been having some trouble finding raw data to use Roger's formula but between help on this forum (thanks ROE) and on Roger's blog I found out how to:

*calculate NPAT:*

Since E(arnings)PS= NPAT/share oustanding

NPAT= EPS x Shares outstanding

So if you look on your broker's website (e.g. I use Commsec) you can see historical info for a company's # of shares on issue and forecast EPS (if the company is big enough) and simply multiply the two.  You will obviously have to keep an eye out during the year for any changes in either variable.

*calculate forecast EqPS (equity per share):*

Forecast Year Equity Per Share = Previous Year Equity per share + Forecast Earnings per share – Forecast dividends per share + new share capital(per share) – buybacks(per share)

e.g. for Telstra

2010 EqPS= 1.02
2011 (F) EPS= 0.274
2011 (F) DPS= 0.28
New share cap= no change
Buybacks= none

You do the math 

Hope that helps.  It sure helped me!!


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## robusta

WTC said:


> Rogers book is 1 page short, he needed to  include a fully worked example on Intrinsic Value including how to calculate IT value in the years ahead.




This is a link to Rogers blog with a worked example of future intrinsic value.

http://blog.rogermontgomery.com/how-do-value-able-graduates-calculate-forecast-valuations-2/

Also a link for finding source data on Comsec, ETrade and Westpac

http://blog.rogermontgomery.com/wp-...the-Source-Data-for-Value.able-valuations.pdf


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## So_Cynical

robusta said:


> This is a link to Rogers blog with a worked example of future intrinsic value.
> 
> http://blog.rogermontgomery.com/how-do-value-able-graduates-calculate-forecast-valuations-2/
> 
> Also a link for finding source data on Comsec, ETrade and Westpac
> 
> http://blog.rogermontgomery.com/wp-...the-Source-Data-for-Value.able-valuations.pdf




Thanks for the links...interesting reading, first time ive seen him on TV and first time ive seen his blog, i like him and good to see he's interested in some of my portfolio stocks.


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## WTC

On Rogers blog he has given a worked example on how to calculate IT going forward, should answer most questions.


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## ubtheboss

If you have already read Roger's book and are now a student of his method for forecasting share price via 'intrinsic valuation' (which was derived from Warren Buffet's methodology) I have set up a new thread:

https://www.aussiestockforums.com/forums/showthread.php?t=20847

That thread is geared towards posters helping other posters with their 'Roger homework', exchanging ideas about sourcing raw data, comparing calculations, etc. (vs. the original 'book critique' theme of this current thread- no disrespect intended).

Cheers


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## MrBoJangles

Hi all,
Here is something for you Roger fans to play with.

http://tdserver2.com/cgi-bin/start.cgi/apps/bourse/login1.htm

You can login for a play with:
LoginName: demo and Password: demo

Inspired by Roger, I have only changed one thing, and that is the A1-C5 rating business, and simplified it to just a 0-5 rating system. I could be convinced to go the A1-C5, but not sure it's really a plus.

There will be a web site up shortly re this web application, and your comments on the app re amendments, improvements will be very welcome.
Private subscriptions will be available - maybe just asking for a donation or something..

Regards,

Mr Bo


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## stumacd

Hi everyone,

I have a value stock screener that calculates the IV (for RR 10-16) and allows you to filter out unwanted stocks.(eg. where debt/equity > 20%)

asxvaluescreener.heroku.com/records

The IVs that it produces are very similar to Roger's, but the data can sometimes be inconsistent. So ensure that you verify any figures yourself.

I'm still working on it, there's a few features that will be handy, mainly an email when a stock hits my RR's safety margin, meaning that I can get the value stocks before everyone else 

Let me know if there's anything that you think I should add.

Cheers,
Stu


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## Sirloin Steak

I used to follow Roger until I tried out the  "stockval" program he recommended and the data hadnt been updated meaning that I lost  cash,

He's got interesting formulas but looking at the company he used to run "Clime Capital" and his returns do they really work?

IMO he's a little bit of a cowboy value investor tinkering and trying to come up with the next big thing.

Hopefully this criticism will be constructive


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## stumacd

I update my site regularly (so I don't miss any opportunities) and you can play with the RR to suit yourself. 

I hope to add more variables to play with in the formulas for those that want them. So let me know if there's anything that you would find useful.


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## robusta

Sirloin Steak said:


> I used to follow Roger until I tried out the  "stockval" program he recommended and the data hadnt been updated meaning that I lost  cash,




Not sure if Roger has any connection with stockval. I read David McNiven's (the ceator of Stockval) book it had some good ideas but I found Stockval next to useless. I had a free trial earlier this year and the top "recomendation"
with a 80% margin of safety was a company called Quantum Energy QTM. Five minutes of digging revealed this company had been delisted a couple of times and a announcement of the CEO selling shares to pay for employee entiltements. You could not offer me a large enough margin of safety to invest in a company like this.



Sirloin Steak said:


> He's got interesting formulas but looking at the company he used to run "Clime Capital" and his returns do they really work?




All I can say is I have been following his formulas (based on Benjamin Graham, Warren Buffett and Richard Simmons) and have found the returns very satisfactory.




Sirloin Steak said:


> IMO he's a little bit of a cowboy value investor tinkering and trying to come up with the next big thing.
> 
> Hopefully this criticism will be constructive




That is the best thing about opinions - we all have one and who is to say who is right?


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## stumacd

Stockval is part of the climb group.
http://www.sharesguru.com/new-value...227.html?sid=1673ac1bb2d4650accf8cdefa6e326f8 (4rd post is from Roger)

I must say that Roger is pretty adamant that his formula just allows you to find stocks for further investigation. The number should just allow you to avoid businesses with bad fundamentals or that have been hyped up.


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## robusta

stumacd said:


> Stockval is part of the climb group.
> http://www.sharesguru.com/new-value...227.html?sid=1673ac1bb2d4650accf8cdefa6e326f8 (4rd post is from Roger)
> 
> I must say that Roger is pretty adamant that his formula just allows you to find stocks for further investigation. The number should just allow you to avoid businesses with bad fundamentals or that have been hyped up.




David McNiven who wrote A Wonderful Company at a Fair Price developed Stockval, Clime bought the right to the program. Like I say the book was good but my short experience of the Stockval website found a lot of the companies were not wonderful, a bit like the The Intelligent Investor Website, good idea but I would not invest in 90% of the companies they recommend.


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## stumacd

Cheers for the clarification regarding StockVal.

I certainly agree on your last point. I can't wait to see the site that has the ability to admit that this week there's no good businesses priced safely below estimated value.

I must admit I think this is part of Roger's appeal, he's not prepared to drink the financial industry kool-aid.


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## Sirloin Steak

robusta said:


> Not sure if Roger has any connection with stockval. I read David McNiven's (the ceator of Stockval) book it had some good ideas but I found Stockval next to useless. I had a free trial earlier this year and the top "recomendation"
> with a 80% margin of safety was a company called Quantum Energy QTM. Five minutes of digging revealed this company had been delisted a couple of times and a announcement of the CEO selling shares to pay for employee entiltements. You could not offer me a large enough margin of safety to invest in a company like this.
> 
> 
> 
> All I can say is I have been following his formulas (based on Benjamin Graham, Warren Buffett and Richard Simmons) and have found the returns very satisfactory.
> 
> 
> 
> 
> That is the best thing about opinions - we all have one and who is to say who is right?




Good to hear that you've done well out of his formulas,

Personally I just go straight to the horses mouth these days,
I get what I need directly from Graham and Buffett and try to avoid anything else,
If there's one modification I would encourage in particular to Roger's formulas it would be to factor in all liabilities in calculations,
Both Buffett and Graham have emphasized this in everything Ive read but it seems that not enough attentions is paid anymore,
They still need to be paid back whether they incur interest or not,

I used stockval because Roger not only used it but in his presentations suggested that his followers do as well. The website had a video ad in which he was preaching about it when I first used it. 

Id also like to know how someone can claim to use Buffet's method of intrinsic valuation when he says that he hasn't ever revealed it,
I am a huge Graham fan though so I will usually encourage a more traditional approach to value investing.

Its probably not in my best interest to keep arguing this point,
The more value investors that move over to a more growth oriented strategy (like Roger's) the more bargains there will be for me.


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## ubtheboss

Sirloin Steak said:


> If there's one modification I would encourage in particular to Roger's formulas it would be to factor in all liabilities in calculations,
> Both Buffett and Graham have emphasized this in everything Ive read but it seems that not enough attentions is paid anymore,
> They still need to be paid back whether they incur interest or not,
> 
> Id also like to know how someone can claim to use Buffet's method of intrinsic valuation when he says that he hasn't ever revealed it,
> I am a huge Graham fan though so I will usually encourage a more traditional approach to value investing.
> 
> Its probably not in my best interest to keep arguing this point,
> The more value investors that move over to a more growth oriented strategy (like Roger's) the more bargains there will be for me.




Hey Sirloin,

I'm still new to this but I think by using a companies EOY equity figure (which Roger's method does) you are by definition including total liabilities in your calculations yes?


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## Darc Knight

Neither Dymocks nor QBD bookstores carry Value.able nowadays. Every other investment book is there though. Interesting I thought.


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