Customer Reviews

Applied Value Investing: The Practical Application of Benjamin Graham and Warren Buffett's Valuation Principles to Acquisitions, Catastrophe Pricing and Business Execution

5 star:		(15)
4 star:		(3)
3 star:		(0)
2 star:		(1)
1 star:		(4)

 

 

Joe Calandro solidly lays out the case for investing building historically on Graham and Dodd but recognizing that today's market practitioners face an increasingly sophisticated capital market structure. As a student of and expert in risk assessment, Calandro makes the case that patient, value-based investing in the updated modern Graham-Dodd model would serve corporations well in pondering their M&A activity. He lays out how even the world's most admired holding company, Berkshire-Hathaway, had success with GEICO but made mistakes in their valuation profile for arguably their most important acquisition, General Reinsurance.

Opportunities to value the key factors that seemingly drive corporations' M&A--franchise, growth, and margin of safety--are both values and risks, and should be viewed as such. But the upside potential must be carefully scrutinized and, as Calandro so poignantly discusses throughout his book, brought down the understandable, calculable factors that can be widely socialized and agreed. To do otherwise simply nourishes the hyperbole of the proposed merger and perpetuates that they hunch-based `synergy' model of merger will work. Really. This time the synergies will come true. For sure. We are thankful for Applied Value Investing and its ability to ignore hyperbole at the individual company level and particularly in the current market crises, whether it is in currency markets, real-estate markets, bond markets, or equity markets.

So stop wondering if value investing is passe and the world has moved onto a more 'mature' model. A century ago, no wiser words were said: `those who cannot remember the past, are condemned to repeat it'...sage advice in this era of uncertainty and market disruption. This book is a MUST READ for serious investors and those who assess risk.

The valuations presented in this book were both comprehensive and true to the modern Graham and Dodd approach. Each level of value was thoroughly analyzed before a final position was formulated. The author's assumptions were transparent and, most importantly, he identified areas that would require expert input to validate.

I found it particularly interesting how this approach worked so well with Buffett's GEICO and Gen Re acquisitions. The value framework presented in this book clearly identified some of those deals' value and risk drivers in a unique and useful way, which is significant as I am a 20+ year veteran of the insurance industry and appreciate his perspectives. Mr. Calandro's insights were very helpful and will serve as a guidepost for future deals.

This book also extended value investing into areas such as catastrophe pricing and macro-investing, and their impact on business strategy where a value approach is clearly needed. I found Mr. Calandro's writing style and explanations to be the right mix of technical know-how and easy to understand explanations of what could be a very complex topic.

Very strongly recommended.

I have read many books on investing and Berkshire in particular but this is one of the few that truly captures and brings to life the key value investing concepts made famous by Graham and Dodd and Warren Buffett. Each chapter builds on the prior chapters in a logical manner and the case studies are great ways to explore the material.

In addition to the fresh insight, this book is a rarity in another way - a well-written and engaging book on finance. The concepts are clearly conveyed for the beginning investor but the material is so complete that even the most seasoned investor can gain from reading this book.

Calandro also takes the value investing concepts beyond their normal confines and explores how they can be applied to such things as M&A and catastrophe risk pricing. This is where the book really distinguishes itself from the pack. These new insightful twists on the tenants of value investing are thought-provoking and very valuable. It makes Applied Value Investing both an investment book and a management book at the same time.

I highly recommend this book.

It is well known that investment is as much art as it is science. This book captures that dynamic very well in that it carefully explains the author's rationale and assumptions in each valuation. It also applies value concepts beyond traditional value investing, just as it says it does. In sum, I found this to be a unique, excellent book but it is for sophisticated investors. Novices will likely find it difficult.

For years now, I've been on a never ending intellectual pursuit to learn more about value investing. There is no shortage of material on the subject, from Graham and Dodd's original work, to Margin of Safety by Seth Klarman. Joe's book, Applied Value Investing, is unique in the sense that it not only explains the philosophy of value investing in plain language, but it actually gives you step-by-step, "Do it yourself" instructions. For both the beginner and experienced investor, there is much to be taken away from Joe's approach. Quite frankly, it is one of the best books I've ever read. For all of you Graham/Buffett/Klarman disciples, this book is a must read for you!

I found the book very useful since it not only states the value investing theory, but also provides step-by-step examples going through balance-sheets in a well explained manner. Joseph Calandro, Jr. has done a fantastic job of providing easy-to-understand valuation methods through the value spectrum of NAV > Earnings Power Value > Franchise Value. The only aspect of the valuations that may be a challenge will be going the extra mile to confirm calculated estimates with a professional.

His Macro section is also well-thought and applicable in our world of ever-growing complexity.

The book was straight-forward and easy to understand. Highly recommended.

Given the numerous footnotes and references of this advanced book the novice investor may want to consult other resources before digging into this one. However, with a little effort, the novice will get through and find his efforts well worth it. The serious investors and students of the business will find it engaging and, at times, thought provoking. Klarman's endorsement indicates this book takes value investing to the next level, which certainly appears to be the case.

I am impressed with the depth of authors knowledge of value investing and the attention to detail put into his analysis. All assumptions were transparent and rigorously explained in the context of the modern value investing framework.

This book belongs on the shelf of every serious investor.

Was going to buy the Kindle version then noticed it was only 1 chapter so I bought the book. Happy I did it lives up to its endorsements.

The commentary from well known and respected thought leaders in this area speaks as to the quality of the book's content. Commentary which is extremely positive to say the least.. and rightfully so! So please consider my review a mere touch of icing on the cake.

In reading the book from cover to cover I found the author's point of view fresh and insightful across a broad spectrum of the key competencies and dimensions on this topic. Calandro has successfully met the challenge. He has defined an end to end approach to optimize principles which are revered as key cornerstones to valuation. I also found very interesting how Calandro framed his approach out against a backdrop woven and grounded in economic and business reality versus academic "what if" scenarios.

The author's identification of key data points to valuation and subsequent interpretation of Graham's and Buffets principles is extremely comprehensive, and well thought out. Overall I found the principles laid out to valuation well rationalized, structured and calibrated for their successful execution in today's business environment.

My compliments to the author for composing a well written book on one of the most challenging area's in all of finance.

The author built on and developed Graham and Dodd's teachings in an innovative and thought provoking manner. For example, all assumptions were transparent, carefully explained and rationalized within the context of each valuation/case. Applying these principles to actual cases demonstrated the practicality of the method. It was a great read.