On Becoming Warren Buffett and Some Fat-Pitch Picks

As explained by the legend himself in the recent HBO documentary “Becoming Warren Buffett”, the Oracle of Omaha stays within what he calls his “Circle of Competence” when investing. This according to a recent Forbes article by Validea CEO John Reese. This includes, writes Reese, “knowing what you know, and steering clear of what you don’t.” He quotes a comment Buffett offers in the film: “Having an edge is enormously important. With that, however, comes the onus of brushing off that which fails to serve you.” Reese recounts other anecdotes and quotes from the film that reinforce what we already […]

Warren Buffett on “Free Money ” Plus Four Picks

In one of his many interviews, Warren Buffett explained how the insurance industry offers the opportunity to “invest in other people’s money and keep all the earnings on those investments,” writes Validea CEO John Reese in TheStreet. The article discusses the evolution of Buffett’s penchant for the insurance business as well as the industry outlook. Using his guru-based stock screening models, Reese identifies four high-scoring, small-cap financial picks: INTL FCStone (INTL), a financial services company (market cap of $687 million) that provides advisory services and products, earns high marks for its price-sales ratio and relative strength (price performance compared to […]

Greenblatt’s Magic Formula-Worthy Picks

Most investors lack patience and don’t understand underperformance, which motivates them to abandon funds when performance dips—precisely the time they shouldn’t, says Joel Greenblatt, co-founder of Gotham Asset Management. In a recent Forbes article, Validea CEO John Reese explains the fundamentals of Greenblatt’s “Magic Formula,” which uses return-on-capital and earnings yield to identify good companies selling for bargain prices. Reese identified the top ten Magic Formula picks and, including the following four that also earn high marks from other guru strategies: Natural Health Trends (NHTC) is a direct-selling and e-commerce company that sells personal care, wellness and quality-of-life products. In […]

Holiday Season Stock Picks

Amid the continued swirl of political rhetoric and speculation about the likelihood and timing of a shoe dropping in the stock market, holiday sales prospects still look good. In an editor’s pick article for Friday’s TheStreet, Validea CEO John Reese discusses this season’s outlook and offers the following five stock picks that could make the ‘nice’ list: Apple (AAPL), maker of the Apple Watch, iPad, iPhone and Mac, among other technology products, earns high marks based on predictable and expanding earnings per share as well as favorable EPS growth. Average return on total capital over both the past three and 10 […]

Buffett’s Affinity for Insurance Stocks

Warren Buffett’s first investment foray into the insurance industry occurred with his purchase of National Indemnity Company in 1967, and his relationship with the sector has grown in spades over the years. In a recent article for Forbes, Validea CEO John Reese offers a brief history of the Oracle of Omaha’s trajectory and perspective on the insurance business and provides the following stocks that pass his guru-inspired screening models: Verisk Analytics (VRSK) is a data analytics provider serving customers in insurance, natural resources, health care, financial services, government and risk management. The company scores well due to its solid, stable […]