Applied Value Investing - Book Author Interview

http://seekingalpha.com/article/177069-joe-calandro-jr-author-of-applied-value-investing-every-investor-should-be-active

Conversely, Graham and Dodd provide a framework to address assumptions up front in every valuation, which is important because, like it or not, when you value a business you are addressing these assumptions, either explicitly or implicitly.

You will make better adjustments if you understand accounting (financial and managerial), strategy, and operations management. There isn’t a silver bullet with this activity, or anything else for that matter. When you read books like “Margin of Safety” by Seth Klarman, “Security Analysis,” “The Intelligent Investor,” and Buffett’s Shareholder letters you see very carefully that they have thought through the assumptions in their valuations very carefully. They aren’t assuming anything away, but rather addressing issues head on, which I think is a key factor of their success.

The need to focus on cross-discipline analysis, which is important for both investors and business people.

When a beginner starts investing, they should do so with a small amount of money because they are going to be wrong (possibly very wrong). Therefore, learning from each failure is critically important; I suggest that every investor conduct a post mortem on each of their investments (both failures and successes) and by so doing they can refine their circle of competence over time. This is important because the circle of competence is essentially what you are offering people as an investor so the sooner you start developing one, the better.