Mad Money Machine

MMM-016: Guru Smackdown

Guru Smackdown pits two heavyweights with their magic forumulas against each other. Breaking down Value Investing. Enter the MadMoneyMachineCOM Investment Guru Challenge. Special Tools in the Crib. Register to win the Bull!

Play show #16 Right Here, Right Now!
[audio:MMM-016.mp3]

Listen to this FREE SHOW thru iTunes!

• Enter the MadMoneyMachineCOM Investment Guru Challenge and see if you can become an Investment Guru. Winners get added to the Guru Roulette wheel.
• Breaking down Value Investing. XYZ grows at 14% per year for the next 10 years. It had $1.89 in earnings last year. So in 10 years at 14% growth it should have $7 per share in earnings. Then we estimate the PE ratio at 20. Then take 20 times $7 to get an expected price in ten years of $140 per share. We want to get 15% growth on our investment per year. When something compounds at 15% per year, that means it doubles twice or goes up by 4 times. So divide the $140 by 4 to get $35 for the stock price today. And since we want to pay only 50 cents on the dollar, we take that in half again and get $17.50. We’re pretty confident we can get 15% a year and we have a big margin of safety.
• The great Bull giveaway. Winner to respond by adding a comment into the show notes.
• Lots and lots of Tools in the crib on this show!
• The Guru Smackdown pits Greenblatt against Haugen. Read the Barron’s article from Haugen’t web site at http://www.quantitativeinvestment.com/Barrons.pdf
• WHEN to buy a mutual fund.
• Buy the Rule #1 Book
• Buy the Little Book that Beats the Market
• Got art? I need a new logo for the Mad Money Machine. Send something, anything, my way.
• If you like the show, please write a review at iTunes by clicking the Subscribe with iTunes button.
• I thrive on your feedback. Send me email at feedback@MadMoneyMachine.com
• Or call me at 20-mp3-4-iPod

Music from the Podsafe Music Network:

Runaway Train by Under Feather
Facsimile by Briareus
the one by The Woodshedders aka The Hot Club of West Virginia
Money by Theory in Motion
The Pop Culture by DJ Top Shelf
Soundtrack by Blackout Gorgeous
Goof by Binärpilot
Groove IT by Denis Kitchen

download the show directly MMM-016.mp3