Index
A
Activists
AECOM Technology Corp.
AIG
Albemarle Paper Manufacturing Company
Alcoa, Inc.
Alienability
Ally Bank
Ambase
Amerada Petroleum
American Chain and Cable Company
American Express Company
APB 25
Apple, Inc.
Applied Materials
Assets, composition and characteristics of
AT&T
B
Babcock International
Bailouts
Baker Fentress
Bank of America Corporation
Bankruptcy, prepackaged or preplanned
Barber Oil Company
Bear Stearns
Benson and Hedges
Berkshire Hathaway
Blue sky statutes
Boeing Company
Boston Celtics, L.P., IPO of
Broadcom Corp.
Broker-dealer research departments and conventional money managers
how they think
problems faced by
analyses that focus on base case forecasts
approach antithetical to those used by private businesspeople and control buyers
external pressures
forecasting earnings
conventional analysis
lack of awareness of relationship between income account numbers and balance sheet numbers and analytic conflicts between related numbers
lack of balanced focus
operating ratios based on financial accounting statistics, concentrating on
predicting future earnings while ignoring existing balance sheet
reliance on fieldwork
reliance on perceptions of what others think
top-down analysis
Brookfield Asset Management
Buffett, Warren
C
Capital markets, access to
Capital Southwest Corporation
Capital structure
conservative
from the corporate perspective
constituency conflicts with corporate feasibility
constituency stakes in corporate feasibility
dividend policy
equity markets, accessing
resource conversion, capitalization in
retained earnings, financing with
substantive consolidation
factors affecting
assets, composition and characteristics of
creditors, needs and desires of
custom and usage
investment bankers, attorneys, and accountants, professional advice of
managements and control groups, needs, desires, and proclivities of
OPMIs and their representatives, needs and desires of
rating agencies, needs and desires of
regulators, needs and desires of
Capital Southwest Corporation
annual per share NAV, growth rate, per share market price and premium (discount) to NAV
Capitalism and Freedom (Friedman)
Carlyle Group
Cash dividends
roles of, in security analysis and portfolio management
and bailouts
conventional theories
as a factor in market performance
and legal lists
placebo effect of
and portfolio management
securities holders, goals of
Caterpillar Inc.
Cerberus, L.P.
Chapter 11 filing
Cheung Kong Holdings Limited
annual per share NAV, growth rate, per share market price and premium (discount) to NAV
Chevron Corporation
Chrysler
Chapter 11 reorganization of
Cisco Systems, Inc.
CIT Corporation
Chapter 11 reorganization of
Citigroup
Citizens Utilities
Clayton Dubilier and Rice (CDR)
Coca-Cola Company
Common stock
methods for acquisition of
cash mergers through use of proxy machinery
cash-tender offers
open market, cash purchases in
private transactions, cash purchases in
prices, influence of reported earnings on
Company disclosures and information
documents
paper trail
U.S., narrative disclosures in
freewheeling
sources
stereotypical filings with SEC
Control, importance of
Controlling stockholders, use of creative finance to benefit
Schaefer Corporation
Corporate feasibility
constituency conflicts with
constituency stakes in
Corporate Financial Reporting in a Competitive Economy (Bevis)
Corporate takeover, use of creative finance in
Leasco Data Processing Company
Corporation Finance (Ross, Westerfield, & Jaffe)
Corroon & Black
“The Cost of Capital, Corporation Finance and the Theory of Investment” (Modigliani & Miller)
Countrywide Financial Corp.
Creditworthiness
from the borrowing entity point of view
capital structure
from the corporate perspective
factors affecting
D
DCF. See Discounted cash flow
Delaware Block valuation methodology
Discounted cash flow (DCF)
Distress investing
five basic truths of
Dividend policy
Dividends
cash
roles of, in security analysis and portfolio management
stock
Diversification
corporate vs. concentration
portfolio vs. securities concentration
Dodd, David
view on NAV
Duplan Corporation
E
E. I. du Pont de Nemours and Company
Earnings record, long-term
Efficient market hypothesis (EMH)
Eljer Industries Secured Bank Debt
EMH. See Efficient market hypothesis
Enron
Enterprise value (EV)
Equilibrium pricing
Equity markets, accessing
Ernst & Ernst v. Hochfelder
Eurozone crisis resolution
Exxon Mobil Corporation
F
Facebook, Inc.
Fannie Mae
FASB 123
Financial accounting, uses and limitations of
conventional approaches
GAAP as defining reality for certain specific purposes
GAAP as road map for due-diligence and less thorough investigations
reports as objective benchmarks
Financial Institutions Regulatory Authority (FINRA)
Fitch Ratings
Forest City Enterprises
Freddie Mac
Friedman, Milton
Funds under management, selected companies (2011 year-end)
G
GAAP. See Generally accepted accounting principles
GAAP Guide: Interpretation and Application of Generally Accepted Accounting Principles (Bragg)
Galbraith, John K.
G&D (Graham and Dodd). See Graham, Benjamin; Dodd, David
General Electric Company
General Motors (GM)
Chapter 11 reorganization of
General Motors Acceptance Corporation (GMAC)
Generally accepted accounting principles (GAAP)
as defining reality for certain specific purposes
as road map for due-diligence and less thorough investigations
Georgia-Pacific Corporation
Goldman Sachs
Graham, Benjamin
and Dodd, placed in context
financial accounting, uses and limitations of
going concern and investment company views of businesses
market performance, importance of
market risk vs. investment risk and margin of safety
modern capital theory vs.
OPMI defined
OPMI perspective of analysis
primacy of income account and appraisal of managements
primacy of income account and diversification
primacy of income account, dividends, and corporate uses of cash
primacy of income account and growth stocks
primacy of income account and top-down vs. bottom-up analysis
primacy of income account and wealth creation
promoters, compensation of
stock market prices
substantive consolidation
trade-offs
view on NAV
Great American Holding Company
The Great Risk Shift (Hacker)
Greentown China Holdings
Gross spreads, underwriting
Growth at dirt cheap prices (GADCP)
Growth at a reasonable price (GARP)
H
Hang Lung Properties
Hart-Scott-Rodino filings
Hayek, F. A.
Heller Financial
Henderson Land Development
Hertz Global Holdings
cash payments to sponsors and controlled investment funds
common stock price
consolidated cash flows
EBITDA
leveraged buyout of
income statement
Hess Oil and Chemical
Hewlett-Packard Company
Home Depot, Inc.
Home Insurance Company
Hopewell Holdings
I
IBM. See International Business Machines Corporation
IFRS. See International Financial Reporting Standards
Income account, primacy of
common stock prices, influence of reported earnings on
long-term earnings record
parsing
wealth creation
Instinet Group
Intel Corporation
The Intelligent Investor (Graham)
International Business Machines Corporation (IBM)
International Financial Reporting Standards (IFRS)
Investing vs. speculating
definitions
for income or total return
method of purchase and holding time horizon
operation rather than issue
safety of principal as avoidance of risk
type of security
Investment Advisers Act of 1940
Investment Company Act of 1940
Investment risk
avoidance of
methods
components of
minimizing
specific
Investor A/B
J
Johnson & Johnson
JPMorgan Chase & Co.
K
Kelly formula
Key Corp.
Keynes, John Maynard
Kmart
Kraft Foods Inc.
Krugman, Paul
L
Lai Sun Garment
Lazard Freres
Leasco Data Processing Company
institutional investors and subscription percentages
Lehman Brothers
Leveraged buyouts, private equity
acquisition of Hertz Global Holdings
capital markets, super-attractive access to
cash payments to sponsors and sponsor-controlled funds
questions about
sponsors attuned to needs of bankers and underwriting community
sponsors’ control of Hertz
Liquidation
M
MacArthur, Alfred
Managements, appraisal of
GARP vs. GADCP
growth at dirt cheap prices (GADCP)
growth at a reasonable price (GARP)
new framework for
OPMI interests, managements attuned to
as resource converters
Marginalism
Market efficiency
determinants of
complexity
external forces
market participant
time horizons
external disciplines, lack of
corporate monopolies and oligopolies
hedge-fund operators
investment bankers
merchant bankers
money management
other professionals
promoters in trading environments
securities salespeople
top corporate managements
external forces influencing
and fair prices in takeovers
value investors, learning from
Market performance, significance of
bailouts
and character of a portfolio
outsiders, insiders, and market price
of portfolios vs. individual securities
professional money managers and beating the market
McDonald’s Corp.
MCT. See Modern capital theory
Merck & Co. Inc.
Merger and acquisition activity
Merrill Lynch
Microsoft
Modern capital theory (MCT)
analyzing companies as going concerns and investors in marketable securities as investment companies
creditor control
discounted cash flows, value determined by forecasts of
diversification, as protection against unsystematic risk
equilibrium pricing
free markets
general laws
vs. Graham and Dodd
macro considerations
market efficiency
market risk
OPMI market
OPMIs, relevance of
point of view
risk-adjusted total return as goal
systematic risk
transaction costs
Morgan Stanley
Myths, debunking
N
Nabors Industries
NASDAQ
Net asset value (NAV)
annual per share, growth rate, per share market price, and premium (discount) to
common stocks, recommended
companies selling at discounts from
static and dynamic views
authors’ view on
dynamics, importance of
financial accounting view on
Graham and Dodd view on
growing, OPMI investing in companies with
limitations of, in security analysis
net nets redefined
potential liquidity, NAV as measure of
relationship of price to reported 10-year earnings and (2012)
resources, NAV as measure of
ROE and PE ratios, relationship between
in security analysis, usefulness of
Net nets
Net present value (NPV)
The New Industrial State (Galbraith)
New York Stock Exchange (NYSE)
Nokia Siemens
NPV. See Net present value
NYSE. See New York Stock Exchange
O
Other people’s money (OPM)
Outside passive minority investors (OPMIs)
defined
perspective of analysis
and their representatives, needs and desires of
P
Penn Central
Pfizer Inc.
Philip Morris
PITA investing
Plan of reorganization (POR)
Pressprich, R. W., and Company
Price to book value ratio, SPX index (historical)
Principles of Corporate Finance (Brealey & Myers)
Procter & Gamble Co.
Public Service Company of New Hampshire
Pure going concern view
Q
Quality of assets
R
Rating agencies, needs and desires of
Real estate investment trusts (REITs)
Refco
Reliance Insurance Company
Reorganizations
bankruptcy, prepackaged or preplanned
Chapter 11 filing, conventional
role of government in
bailouts or capital infusions
corporate reorganizations and liquidations, revolution in
failure of financial institutions
financial institutions, strict regulation of
moral hazards
partnership between government and private sector
taxpayer bailouts
voluntary exchanges
Residential Capital LLC
Resource conversion
activities of Dow Jones Industrial companies (2007–2012)
capitalization in
corporate contests for control
1970s through 2012
shark repellent, emergence of
existing assets, more aggressive employment of
going private and leveraged buyouts
example
tax shelter, other people’s money, and something off the top
merger and acquisition activity
OPMI prices and control values, long-term arbitrage between
Restructuring troubled companies
five basic truths of distress investing
rehabilitation
capital infusions
reorganizations
Section 363 sales
Retained earnings
financing with
Return on equity (ROE) analysis
and PE ratios, relationship between
Return on investment (ROI) analysis
Revlon rules
Riskless arbitrage
The Road to Serfdom (Hayek)
ROE. See Return on equity analysis
ROI. See Return on investment analysis
S
Safe and cheap investing
approach
benefits for OPMI
availability of multiple exits
confidence in investment commitments
investment-risk-resistant commitments
restrictions and demands of
activists and
avoidance of predatory control groups
dismissal of conventional wisdom
and know-who
missing of attractive opportunities
motivating factors, understanding
restricting investment universe
Sarbanes-Oxley
Schaefer, F. & M., Corporation
consideration given to sellers of capital stock
family ownership interests
purchasers of 170,000 corporation common
sources of funds and securities in transaction
spread between what corporation and others get, composition of
transformation to different discipline
Schenley Industries
SEC. See Securities and Exchange Commission
Securities
buying in bulk
acquisition of control by using proxy machinery
common stocks, methods for acquisition of
voting equities, acquisition of through exchanges of securities
substantive characteristics of
classification
control vs. non-control
as options, terms of
pricing and arbitrage, control and non-control
types of, for analytic purposes
types of
Securities Act of 1933
Securities Exchange Act of 1934
Securities and Exchange Commission (SEC)
Securities Investors Protection Act of 1970
Security Analysis: Principles and Technique (Graham, Dodd, & Cottle)
Shareholder distributions, from the company point of view
cash dividends or retained earnings
distribution of assets other than cash
liquidation
stock dividends
stock repurchases
Sharpe, William F.
Short-termism, primacy of
Smith, Adam
Society Corporation
Solvency, tests of
Something off the top (SOTT)
Source Capital Preferred
SOX. See Sarbanes-Oxley
Sponsorship
Stock dividends
Stock repurchases
Structural subordination
Substantive consolidation
doctrine, accounting for stock options controversy in light of
failure to use
Surplus surplus
T
Tax shelter (TS)
The Theory of Investment Value (Williams)
Third Avenue Value Fund
3M
Tishman Realty
Top-down analysis, primacy of
Toyota Industries Corporation
balance sheet for
Travelers Companies, Inc.
Treasury notes
Troubled Asset Relief Program (TARP)
Trust Indenture Act of 1939
TS. See Tax shelter
U
United Technologies Corp.
U.S. securities laws and regulations
U.S. Treasury Notes
V
Valuation: Measuring and Managing the Value of Companies (Copeland, Koller, & Murrin)
Value investing
Value Investing: From Graham to Buffett and Beyond (Greenwald, Kahn, Sonkin, & Van Biema)
Valuing a Company: Practices & Procedures (McCarthy & Healy)
Verizon Communications Inc.
Voting equities, acquisition of through exchanges of securities
mandatory
voluntary
W
Wal-Mart Stores Inc.
Walt Disney Co.
Wealth creation
long-term
methods of
Wharf Holdings
annual per share NAV, growth rate, per share market price and premium (discount) to NAV
Wheelock and Company
White Mountains Insurance Group
White, Weld and Company
Williams, John Burr
Wilmington Trust
WorldCom
X
Xerox
Z
“Zombie Banks”