What does the name Investing 501 mean?

Rather than use the name of some obscure Greek god, we chose a name that embodies one of the main goals of our site.  The site will about good investment ideas and education.  This is not an investing site for beginners, which would be Investing 101, or even a slightly advanced course which would be 201.

Investing 501 intends to teach what will basically a graduate level seminar on real world security analysis and portfolio management.  We assume the reader has a solid knowledge of basic accounting and finance statement analysis. Like any good graduate course we expect you to bring your own ideas and insights. We look forward to an open exchange of ideas.  The good news is there will not be any quizzes!

Can I use this site to find good investment ideas and ignore all the education crap?

Absolutely, just click on the research tab. You will see a list of our best ideas.

Why start a value investing site when the market is near record highs?

What a good question.  If you thought of it give yourself and “A” for the first week.

We intend to teach how to select the best portfolio of equity securities.  We expect that each investor will make his own asset allocation decision.  Even if you have only 5% of your portfolio in stocks, you can still use our website.

Although some in the value investing world might consider it heresy, we intend to teach relative value analysis. We will eventually come up with the best portfolio of 20-30 stocks. You can decide whether to allocate 5% or 100% of your assets.

Absolute value analysis is a concept that sounds great in theory, but in practice it is very difficult to execute. Someday we will write a long essay on this subject.

The two co-founders of Investing 501 disagree strongly about the intermediate outlook for the market. One believes that in the current low interest rate environment that stocks are a reasonable alternative to fixed income investments. The other keeps sharp sticks in his apartment so he can hunt squirrels for food when the financial system collapses. Well not really, but one of us is quite bearish.

The good news is that neither of use our market forecast to pick stocks. We are lousy market forecasters.  We are much better stock pickers.

Who is the intended audience for Investing 501?

Our first intended audience is professional investors that are seeking non- traditional sources of new value oriented stock ideas.  This is what we have both been doing for 30+ years, and we are changing that now.

Our second intended audience is less experienced value investors that want to learn more about the business.  Both of us have extensive experience teaching investing methods to junior analysts. This could include CFA exam candidates, accountants looking to make the jump to investing, or any of a wide variety of professionals that want to learn more about value investing.

Our third audience is those who have other important jobs, and just enjoy learning more about value investing. For this audience we hope to keep things fun. No we will not become the Motley Fools, but we hope to have a laugh or two.

When will the model portfolio be complete?

We hope it will take less than six months, but it is hard to tell.  We realize the flow of good ideas is often uneven. We do not want to add marginal ideas just to fill the portfolio.  However, we know that managing the portfolio will be a real educational experience, so the pressure is on to find good ideas.

We hope that at some point our readers will submit some good ideas.  We will be constantly scanning the Internet for new ideas as well.

What style of value investing do you advocate?

We hesitate to put ourselves in a particular category.  We think it is best to wait and read our first 10-15 ideas and make your own judgment.

It is safe to say that be are not true Buffett believers, we will do few if any great companies selling at average prices. We will not be recommending things like Coca-Cola, or even Burlington Northern.  We believes that most “deep moats” are often only ankle deep puddles. We will be looking for average companies, selling at well below average valuations.

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