Steven Loi - My thoughts, stories, and experiences.

Last weekend, I stopped by Borders to pick up a few books: Guy Kawasaki’s Art of the Start and Christopher Browne’s The Little Book to Value Investing.

I figured Guy Kawasaki’s book, Art of the Start would be a good book for me to reference as we move forward with our internal gig. While many has praised this book, some have stood strongly against it, stating it’s a book without much depth and that Guy hasn’t really gotten much experience “starting up a company” while basically living on his former fame of being an Apple evangelist back in the 80s. They point to Guy’s latest startup to prove that only through his popularity and his venture firm for the reasons that Truemors has caught the public’s attention, not because it is a brilliant idea. Despite the negative comments from the community, one clear fact is still: Guy’s popular, successful, and very influential in the technology/entrepreneurship world. And because of that, I feel his common sense approach in writing this book to help aspiring entrepreneurs start a company will be worth read.

As for Christopher Browne’s The Little Book to Value Investing, I’ve read Jim Cramer’s books and follow his teachings as a growth investor for quite some time now. With Mr. Browne’s book, I wanted to understand the flip side investing: value investing. What is value investing you ask? The concept Mr. Browne simplified it to be: “Buy steaks when their on sale” or “Buying a dollar for 66 cents.” And the biggest and most successful investor uses this type of investing methodology? The one and only, Warren Buffet.

Through this past week, the internet disruptions (it was down for two days — approx. 35 hours) and the holiday weekday, I was able to do plenty of reading. I was able to complete Mr. Browne’s book in two and half days (for some, that’s slow, but when you’re trying to take in all the tips and advice, it takes a while for me to soak it up). Some pointers?

1. Buy a dollar for 66 cents.
2. Insider activity is a good indicator for the health and direction of the company.
3. Technical analysis is great at telling investors about past performance, not future (Different from Mr. Jeffrey Won’s take, a senior VP at Morgan Stanley in Sacramento where he charts often and weighs Technical Analysis to be 60% of his investment decisions).
4. Value investing has way less volatility than growth investing.
5. Historically, value investing beats all investment vehicles and methodology.
6. Pay attention to the basic principle of buying below intrinsic value with a margin of safety and exercising patience.

The book gave insight to how a value investor thinks and strategies (it helps that Mr. Browne has a tremendous track record as well.) The debate about growth vs. value investing can go on forever, but one fact that shouldn’t be lost is that “homework” needs to be done on both the company, competitors, and the economy. Without it, you’re practically playing Baccarat in Vegas. Doing your homework: understanding the fundamentals and health of a company, understanding the revenue growths, the bull markets, etc. are all that helps you get an edge on making the right decisions.

I look forward to reading the next investing book I have: John Bogle’s The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns. A very short, simple, and highly rated book. On the mean time, I figured I’ll continue my read of Entrepreneurship by HBR that I borrowed from my friend’s family two weekends ago.