so tonight's webinar is entitled replicating Walter SCH sl's investment technique and if you're not familiar with the man Walter schoss is uh a fellow grite I guess you would call him uh he was trained by Benjamin Graham as was Warren Buffett and several others he's one that Buffett called uh one of the great super investors and the interesting thing about scho one he was very much off the radar he managed a small amount of money relative to what many of his peers were he had zero staff except for his son and he did not do nearly as much indepth analysis of the companies as many of the Great investors did and simply had a cheap stock pattern and worked out very well for him so want we kind of explore tonight what he did and how we can kind of mimic some of his techniques now quick disclaimer obviously all the information presented here to the best of our knowledge true and accurate however there are typos or data errors we do apologize for that now this is Walter scho he's getting up there in years uh born in 1916 started out did not go to college has no college degree got a job as a runner on Wall Street at age 18 and on a tip from a friend read the intelligent or excuse me security analysis by Ben Graham end up taking one of his night courses uh went off to the Army and then Graham called him and today I had an analy leave you know would you can you come work for me so went to work for Ben Graham worked there for a couple of years till Graham retired and shut down that partnership and then Walter had just through contacts he made there about 19 uh people willing to invest with him started as own limited partnership in 1955 now over the the entirety of that I believe you sh it down around the year uh 2000 returned 15.3% a year on average for 45 years now his partnership was set up to where he charged no management fees but took 25% of the profit so you know before that profit sharing averaged about 20% a year just a phenomenal track recer for that amount of time so schl very much an off the radar manager right did not get any press whatsoever until about the mid 80s when Buffett mentioned them in a couple of shareholder letters uh kind of was a recommendation people looking for a place to put money uh and again Buffett mentioned them later in an essay called the super investors of Graham and doddsville and if you were unsure on the stock market or have someone who believes that it is still uh you know sheer luck as to who wins and who loses I encourage you to read that it's about a 15-page essay written by Buff but just talking about he and some of his peers who all came from Graham and all went separate ways and have all produced wonderful track records so this is a look at his track record through 1984 I apologize a little bit small I mean back when he was doing this reporting requirements were much lighter than the are today and considering they had a small partnership he did not have to file 13 that's like many of the large fund managers do today but as you can see I mean you can scroll through this Aid he did not beat the market each and every year but um you know over the big picture he just absolutely annihilated the S&P 500 Index and had some huge years uh where he did so remarkably well so let's talk about his investment philosophy really quickly because I want you to kind of understand the broad Strokes of this um he bought value as you can imagine and diversified adequately but not excessively and remain patient so what does that mean well he he literally just looked for cheap stocks were value companies where we can get more Assets in his investment dollar he Diversified bordering on excessively I mean he regularly held 60 to 100 Securities in portfolio he's extremely patient uh with those Holdings he rarely talked to management uh if ever and invested only on the numbers so he in some would only visit companies that were within like a a 10 block radius of their office uh didn't feel they could get anything from management that they you know they could just pull the wool over his eyes uh and instead just stayed off the radar and used only public information had no big contacts on Wall Street just looked at you know value line charts and Company uh company filings so his main this big Focus this guy was Book value and so many people are focused on earnings you we're looking at the PE Ratio um uh we're looking at free cash flows you got guys like um Peter Lynch who were phenomenal investors who were mostly focused on earnings but SCH took the other side of this he looked just at book just at assets uh you know as long as they weren't bleeding cash out but he was famous for saying uh you know asset values fluctuate more slowly than earnings do and in all the interviews and all the things I've read of him you know he was very strong in the fact that he just can't predict earnings that I don't know if they're going to committ at a dollar and a quarter or $5 or Nega $2 so instead of trying to predict that which is you know very difficult to do even in today's market especially people that try to do it quarter over quarter he just focused on the assets there and tried to pick up Bargains where he could so his primary focus looking at low price to book ratio he wants to buy the company preferably at a discount to book if not then very close to it so when he did look at earnings he liked low prices compared to nor what he called normalized earnings okay so instead of basing it off of uh what analysts think they're going to do next year what they did the very last 12 months he's looking at he's not looking at growth he's looking at you know slower more stable businesses steel companies and the like and he'll average out their earnings for the last three to 5 years or 10 years say okay they're usually good for about 50 million a year or 100 million a year whatever that is because his longer term Outlook allowed him to have that that that bigger picture view correct yeah I mean he you know preferably Book value greater than what it's currently trading at so a Price to Book ratio below one now you know his preference like most these value guys he like stocks with long histories and track records okay 15 to 20 years so a lot of the stuff on scho he is a boring investor by most standards but boring just slaughtered the market and I'll show you I mean you know you can see the numbers like $10,000 with him over 50 years turned into you know 20 million or whatever it is I mean just just slow and steadily boringly beating the market year over year worked very well for him uh so he maintained kind of a diversified cheap basket of stocks and that was really his strategy for risk and he even commented on the times that Buffett would say know diversification uh something you basically something to the effect of you only need to diversify if you don't know what you're doing uh scho regularly said yeah that's right but we're not as you know I don't I don't think I'm as good as Buffet at predicting these things so you know where I may buy one cheap book for a reason end up going bankrupt well it's one of a hundred stocks I own and it's not going to destroy my portfolio so he bought enough of these cheap stocks that being wrong a few times wasn't going to destroy his track record and destroy the returns uh and as I mentioned often own 60 to 100 stocks sometimes more than 100 at any given time his max concentration to one stock was about 10% uh of that partnership so he like any of us I mean liked some of the some of the picks better than others he really liked he build into a position but up to about 10% any one stock which is which is significant if you've got a 100 100 security portfolio right I mean you're putting 10 times what the average number of your stocks is but 10% kind of where maxed out and it's average holding period was four years we had roughly 25% uh annual turnover and over a 50-year period you've got enough data to see that most of his stocks were held for about a four-year period which should give you kind of an idea of how long this takes for somebody's low price to books to be recognized and realized or or turn their situation around so these are kind of his his buying guidelines um and you know what he how he got in and out of security um he preferred to buy at half to 2/3 of Book value okay now he never specified tangible book so I'm thinking he did probably like a lot of us did uh you know he took book for what it was you got remember when he was investing there weren't as much as as as large of these intangible items on the balance sheet so like any of us U he's going to Discount some of that out but it didn't use hard rules of saying any intangibles are completely wiped off you know because there are companies there are the coca-colas and whatnot that pay more than Book value for a company that puts Goodwill or intangible assets on on their balance sheet that are actually worthwhile okay so if you guys are unfamiliar with this just so you know when you see Goodwill on a balance sheet sometimes it's garbage sometimes it's not right so if I went and bought cocacola today the whole thing I'm a trillionaire I go buy Coca-Cola right I don't know what their market cap is what 100 billion something like that 50 billion whatever whatever it is if I buy Coca-Cola for h100 billion do but their Book value is only 50 billion do you think Coke's worth 100 you think it's worth 50 I mean they've got tremendous earning power they've got trademarks they've got you know this whole distribution Channel and all this a I mean they're worth more than Book value so that difference will be carried on my balance sheet is Goodwill so in some cases you know just because it's intangible does not mean it's worthless but other companies um hold large and tangibles that really are kind of worthless so just throwing that out there but he preferred half to 2/3 Book value um and would pay up to book or up to a little bit over Book value for a strong company he commented often on you know we adjusted the market so when he started doing this in the 50s and 60s you know he could there were still a few of those working capital stocks left right so it's you know cash minus total liabilities there's more money there than the stocks trading for those are just kind of gimmies that's what Graham did those kind of began to disappear and they've really all disappeared today then these discounts to books so started disappearing so as he went on you know he went from paying half Book value to 70% to 90% to maybe up to you know 125% uh when he was ending his career and Scott's asking could I clarify how I compiled this information yeah the information was compiled between uh every interview he's ever done and also his holding report so uh he did several interviews if you if you go through Google and just do a search for him you can find some old stuff where he laid this stuff out fairly clearly and also some memos uh from his desk where he outlined this stuff but yeah it's all coming uh from him he didn't yeah uh he did say we never PID two times books like we won't pay double books so I mean you know when he says he focuses on Book value I mean even if it's Google he's not paying more than one one and a quarter times book often sought unloved areas of the market and this is something you know it's it's tough for us because today we're very uh you know between CNBC and the journal and everything else we we're pushed to be shortterm Focus what Wall Street wants us to be they want us to dump our ideas and buy new ones and trade and trade and trade and trade but you know in the cycles of the market there are loved areas and there are unloved Aries right some of the unloved Aries of 2013 um were some of the like computer companies in Tech like Intel company uh Microsoft at one point last year traded at you know 11 or 12 times earnings uh you know IBM is very very lowly valued so you know some of these areas have been on love for the last couple of years and the more loved areas the last the last 12 months or so you know solar got a lot of push uh late 2013 3D printing got a big push social media is very loved right now so he would really focus on the unloved areas and it's not as hard to find as you think just start doing scans when you see you know a bunch of low PE stocks or lunch of low price to book stocks in a certain area that seem to be lagging the market that's really the unloved area he did not buy financials and most value guys don't this is not uncommon uh they just don't touch financials he thought you know the balance sheets were too hard to read it was too complex and he just just stayed away from it and he didn't buy tobacco stocks and that was really an ethical reason um so if if the ethical side of tobacco doesn't bother you you can kind of ignore that now when he bought he always averaged in okay so if he was looking to take you know a $50,000 position in a stock he never went and bought 50k of the stock he always started with about half or less of the position and then averaged in because it's value guys especially when you're buying an unloved sector of the market when you're buying stock that is plumming pluming coming down and down to Value he wanted to be able to buy more and buy more and buy more and he did the same thing on the way out so um when he sold stocks he averaged his way out there as well so he didn't just get it all at one fi price in and out he was ready and willing to buy more stock if shares continued lower and sometimes even continued higher one of his said you really don't know a stock until you own it this is actually really true and he would often take really really tiny positions in a stock he was watching uh you know so imagine you know he's managing you know $40 million not a great deal of money right so 1% of that that he's going to put at each stock is maybe $400,000 uh for you know rough average of each of the stocks well he may see something he's kind of watching get a feel for it and put you know 30 or 40 Grand into it and he'd say you just don't know a stock until you own it then once you own it it becomes much more personal and you begin to watch it uh from from a different perspective and so that's another reason he would kind of average in and once again up to 10% any1 position uh he looked for prices near threeyear lows okay so one of the things he said is you when he's when he's finding stock trading to Discount to bog thinks is a good value and the Stock's trading at 50 bucks he' look at a chart of the stock over the last three to five years and say yeah it's at 50 now but it was at 25 just just two years ago so that kind of shows me this stock has further to go so I don't want to call it technical analysis but he would just kind of look at the the historical price range to see where the bottom has been the last several years and he wanted to buy in that in that level and finally he never discloses holding to the limited partners okay so the way a limited partnership works is there's a there's a uh you know senior partner uh that has control over the partnership and then there are other limited partners in this case is investors were like 19 or 20 of them that put money in they're Partners in this thing they never knew what they owned um he would never tell them for 45 years I mean in his in his annual letters he would you know mention a couple of highlights of stocks he bought uh but but said look you know if if I start disclosing this stuff then other people can essentially copy my Holdings without being invested in the fund you're getting free advice from me and on the other hand yeah the Stock's trading lower now uh but I'm willing to I want it to you know is it five I want to buy more at 4 or three if I tell everybody about it they're going to go buy it and bid the price up and I won't get to get in there so he just never discloses Holdings which I thought was kind of interesting even the guys have been investing with them for four decades now finally I want to show you this memo and this is I retype this this is uh was a photograph from that came off of SCH sl's desk that he wrote and it's 16 factors needed to make money in the stock market we'll kind of go through these some are very basic and then we'll go to the guru Focus screener and start looking for the type of company that scho would buy so let right off his desk typed by him on a typewriter uh number one price is the most important factor to use in relation to value and we of all people should know that two try to establish the value of the company remember that a share of stock represents a part of a business and it's not just a piece of paper number three use Book value as a starting point to try and establish the value of an Enterprise be sure that debt does not equal 100% of the equity capital and surplus for the common stock so right here you know big warning he's giving and this is kind of a memo he wrote just to just to sort of beginner investors and some friends he was sharing with but you big I mean any balance sheet uh disciple is going to hate debt and he was another one of those guys I mean if he say be sure debt do not equal 100% of equity mean he's looking for for uh you know debt to equity ratios less than 05 preferably less than Point 4.3 four have patience stocks don't go up immediately something we all need reminded of number five don't buy on tips for a quick move let the professionals do that if they can don't sell on bad news so don't buy on good don't sell on bad number six don't be afraid to be a loner But be sure that you are correct in your judgment you can't be 100% certain but try to look for weaknesses in your thinking Buy on a scale and sell on a scale up so again encouraging that same um that same mentality of scaling your way into a position and scaling your way out so you don't just have you know one chance to get in and one chance to get out and you're kicking yourself you got the wrong price number seven have the courage of your convictions once you've made a decision number eight have a philosophy of investment and try to follow it the above the above is a way that I've found successful so really open here saying look if you're an earnings guy you want to trade on something else that's fine but stick to your philosophy if you're going to buy cheap stocks based on book buy cheap stocks based on book and don't get carried away and try to catch a penny stock the next 3D printing Runner the next hot item that's something he did number nine don't be in too much of a hurry to sell the stock reaches a price that you think is a fair one then you can sell but often because a stock goes up say 50% people say sell it and button up your profit before selling try to re-evaluate the company and again and see what the stock sells in relation to its Book value you be aware of the level of the stock market are yields low and PE ratio is high if the stock market historically high are people very optimistic Etc so what he's saying here is you know if I think a Stock's worth 10 bucks I buy it at five and it goes up to 10 don't necessarily just dump it take a look at the market if you did that today you know you'd see well pees are historically a bit high yields are relatively low you know we're kind of overvalued uh territory compared to historical level so yeah I'd probably sell it but if one of your stocks happened to reach its value and say you know 2010 and the PE of the of the market is you know 12 or 13 compared to average of 17 or 18 maybe you hold it and let the momentum of the market take it a little bit further 10 when buying a stock I find it helpful to buy near the low the past few years the stock may go as high as 125 then declin to 60 and you think it's attractive three years before the stock sold at 20 which shows that there is some vulnerability in it that's what we were talking about earlier just looking for you know where that shelf is where where buyers have recently found a bottom in this stock and he wants to try to get as close to that as he can 11 try to buy ass try to buy assets at a discount uh than to buy earnings earnings can change dramatically in a short time usually assets change slowly want us to know much more about a company if one buys earnings so some of this looks jumbled up I typed it like letter forl so scho you know maybe was an English major but um yes it's just reinforcing the point right he buys assets he doesn't try to buy earnings there's money to be made in earnings but he can't predict it it's $5 a share one quarter it's a dollar a share the next assets on the other hand you the value of the buildings and the Holdings and the inventories they have are not going to change that dramatically quarter to quarter 12 listen to suggestions from people you respect this doesn't mean you have to accept them remember it's your money and generally it is harder to keep money than to make it once you lose a lot of money it's hard to make it back so you know another theme we see with a lot of these Great Value investors they focus on uh protection of that Capital because you know we all know the rule if you lose 50% of your money then you've got to make a 100% just to get back to where you are so it's always it's always better to leave a little off the the upside than than to take a little more in the downside 13 try not to let your emotions affect your judgment fear and greed are probably the worst emotions to have in connection with the purchase and sale of stocks and we all know these to be large factors that move the market 14 remember the word compounding for example if you can make 12% a year and reinvest inv the money back you'll double your money in 6 years tax excluded remember the rule of 72 and the rule of 72 for all you don't know whatever percent you can yield divide that by 72 and that's the number of years it takes for your money to double so if you're earning 10% a year your money should double in just about every 7.2 years if you're earning 20% a year you can double your money every three and a half years 15 perer stocks bonds bonds will limit your gains and inflation will reduce your purchasing power in finally be careful of Leverage it can go against you so these are the 16 rules of Sloss as typed up per him I just wanted to share that with you guys uh because it's you know one of the few things that is really off his desk from his typewriter that I thought we could take a look at to kind of get inside his mind really quickly so let's go ahead and go to our screener and we'll start looking at how we can pull these types of stocks and how we can try to emulate what scho has done so you know we've got probably the best fundamental stock screener available online here the all-in one screen with Guru Focus if you're not a premium member I don't think you can use it but you can always sign up for a 7-Day trial get full access give it a go you're free to cancel anytime inside that seven days if you want to try it out but if you're not I'll be sure to I'll be I'll be glad to to show you how it works and you can kind of get a get a feel for it if you are then you've probably played with this a lot yourself uh really Qui quickly how many of you guys let me ask really quickly quick poll how many of you are premium members uh so just answer yes or no yes I'm a premium member or no meaning you're either a basic member or you haven't registered neither way it's fine you're both welcome to the webinar I'm just trying to get a get a feel for where everyone's at and how comfortable each of you are with this website premium okay Matt Bo Richard Daniel all right thank you guys for answering that go ahead and close that poll get it out of your way okay so let's look at the screener now what based on what we've talked about um let's look at a way to screen for some of these and I've got a slide here I should have left it up um here we go so I don't know why that's doing that so here's the all-in-one screener uh is I run it to kind of replicate slaws all right we're removing financials we know that he didn't like Financial stocks I didn't invest in them go ahead and remove those I remove REITs as well it's kind of financial the other end of it is there's a lot of real estate value that that's the whole balance sheet you know we've seen what can have to real estate as we saw on 08 and 09 on top that I just don't know how much I can trust the real estate holdings uh of a professional company so I just remove those from it now for market cap I did 50 million or more and you guys should be seeing this on the screen for market cap I'm looking at uh 50 million or more greater than 50 million and this is an optional one if you want to get into the really small penny stocks and stuff you can um I just prefer to keep it I mean this is still a micro cap company but I i' try to get it just a little bit over you know the $3 million companies and things that may or may not be real debt to equity talked about you know wanting debt to be less than Capital less than Equity so I've got that at less than 04 to try to find low debt we're obviously going to give favor to the companies that have the lowest amount of debt uh this is just a way to kind of filter a lot of those out I go ah and exclude over the counter stocks um you know the filing requirements are really loose for these guys a lot of the data is incomplete it's just kind of a headache and that's all in the fundamentals so the on the valuation tab I scan for Price to Book less than 1.2 it's kind of the highest end I want to go I mean you can scan starting at 08 or 7 or however low you want to go um but I try to get I want when I'm done with it I want to have a list of 30 or 40 stocks I can kind of dig through so if you want to if you want to you can filter it tighter but in today's market you're going to get less and less stocks we'll go through that uh probability tab I just set the net margin to greater than zero because all this means to me is company's not losing money right the net Mar your net profit margin uh as long as it's zero or greater you're not just hemorrhaging cash and then only historical valuation tab remember we talked about trying to find stocks near their threeyear low I put Max percentage above that three-year low at 35% and you know none of this is is in stone you can change it you can make this you know 1.0 you can make this 50% or 20% you know whatever but this is this I hope you I just want you to agree this is kind of the the summation of schl a starting point now he didn't have screeners he didn't have computers he went one by one through the value line sheets uh to try to find stocks trading at a discount Tristan aren't earnings aren't free cash flow better measured than earnings I mean yeah we're not we're not looking at earnings though we're just looking at I mean I'm just using that to to try to you know remove stocks that are hemorrhaging great amounts of money Scott asks uh if you get a list of 30 40 stocks running the screen do you find this list turning over every couple months order to build a portfolio similar to the size of SCH uh good question Scott and I don't know how fast it's turning over in today's market I mean I will say you know today you're going to find a lot less of these stocks than you could have found probably at any time in the last hundred years just because of the level uh the overall Market is at so I think schl have a hard time maintaining a 100 stock portfolio today but as he mentioned several times I mean He adjusted with the market so if I had to guess if schas was still running money today I would assume he'd be trying to buy companies at you know 1.2 1 three times book and just finding the lowest possible book valuations there are I mean he was always at least 90% invested he never held much cash um so you know he wasn't a guy that tried to time it very much so he just got the lowest price to book companies he could Tristan you're looking at earning I mean yes Tristan net margin is is based off of the earnings figure but there's not a like free cash flow more I mean we can get technical with it we really don't have to use that one if you don't want I'm just trying to to to filter out some some bad companies so let's go to the screener and take a look at these um so really quickly I'll go Ahad and select all of our Industries here and then I'm going to take out financials notice we are at uh how many records we're at let's see take out Financial Services this is what's cool about this screen you can just select them all and pull out what you don't want or just search for uh various Industries then I'm going to take out Reit as well okay everything else I'll leave in so every other industry is available and then I'll go aad and select USA as the country and debt to equity mention won't want that any larger than about 40% it's kind of the max threshold so I'm going to go now these work on drop- down menus the left side is you know minimum right side's maximum so uh we want it less than 04 so we're going to use that as our Max and you could also use interest coverage Charlie did one of these where he ran interest coverage minimum of 10 mean they can make their interest payments at least 10 times over uh it's another way to filter it down it's there there's no really perfect way I mean you're going to have to look at each of these stocks individually as you go through it then we're going to exclude over thec counter stocks then here on the market cap side uh again I'm just going to do over 50 million it's still pretty small companies but when you get into these six or seven million doll market caps when you're so tiny uh they fall off the radar and and and fall off listing all the time and I think that's everything for the fundamental tab let's go over to the value valuation ratio Tab and again the only thing I'm really going to do here is put Price to Book below 1.2 and see we're already down to 156 stocks just in that one very filters we were you know a couple thousand down to 150 just finding Low Book values and you can play with different things if you want to use price a tangible book you can do that uh you know price and net cash there's different ways to do it but this is an easy way uh then net margin again I'm just looking at you know some kind of positive margin here so try to filter this down to get rid of the ones that are just you know hemorrhaging cash and then historical valuation this is where we're looking at the price being uh certain percentage above the three-year low so uh you know I I choose about 35% you can go larger or smaller depending on how small your list gets this gets us about 24 stocks which isn't bad if you want a few more I mean you know we're we're all-time high level you know you're not going to find a whole lot of stocks trading that near that low so if you want to go to 50% or so you can um give it about 35 and I think that's everything it's all of our filters all we really need to do was there one more okay I think that should be all of them now I got a couple of questions here asking you about the data if we speak to the quality of the data so all of the data uh does come direct [Music] from from Morning Star and you know all the calculations are done by on the guru Focus servers but it's you know the data is sent direct from Morning Star it's about as high quality data as you can get um and you know as soon as it's made public and on Morning Star servers there's less than a 20- minute lag the time it gets to you guys and as far as the 10 to 15 year track records I mean yeah that that that's that those are all 13 F5 ings from the gurus that is uh public information there on the morning star from the Morning Star data pipe and so there is a way to screen for buybacks on the screener this is obviously not one of schoes fundamentals but right here on the fundamental tab you see it's got share buyback rate and you can do 10 year 5 year threee or one year so if you're looking for those kind of cannibal stocks that are buying back shares each and every year on a fairly consistent basis you can you can set these uh to find that so we're down a list of about 24 stocks okay so from here really all you want to do is kind of dig into each of these and take a look at their financials you know just look at the balance sheet does it look healthy and then make sure they're not just dumping cash over the edge of the boat right you don't want to I mean if you're buying the the book at a 20% discount it's not very good if they're losing half their Book value every year they're blowing money out the door right so you know we'll look at a couple of these and I actually built a screener uh or I've built a portfolio and just put some in here as I've been finding them the last couple of days uh to give you an idea there's there's about 10 of them here from that screener uh that I've gone through so we'll look at a couple of these and kind of show you what I'm talking about Jeff yeah schas obviously preferred a dividend but a lot of these stocks he was getting there just weren't much of a dividend there uh he was really after the price appreciation he was really looking for um you know the realization of value there's a going be called Eastern company okay a one star company not you these these are not going to be super high quality stocks they're just going to be cheap but look at out you know relatively cheap compared to some of these valuation numbers we've got a market cap of $100 million trading it right at our limit of 1.2 times book and 14 times earnings so this kind of how I run through them just to give you an idea the biggest things when you're when you're looking for assets when you're invest investing based on balance sheet the most important thing here on this front screen is financial strength strength okay and Charlie's got some great formulas here where it puts in you know cash to debt Equity to asset Alman zcore M score F score and it Compares them versus the industry they're in and also the history of that company and you get a final score out of 10 if I look here and see seven or higher on the financial strength I'm going to keep looking all right if I if it's like a three or a four most of the time I'll just keep rolling on by now Kai as far as the zcore it's the Alman zcore you can click each one of these things and it will give you a definition of How It's calculated and what it is um and as far as the Stars Norman these stars are a guru it's a guru Focus proprietary feature and is the business predictability rank so what it does is scan the last 10 years um of ebbit dial revenue and earnings of that company and looks to see how consistently the company is growing it and how predictable it is so you know if it's a company that that uh uh you know one year at at $2 a share $3 and lost money then made good money you know this is this is like a one-star company if you look at like a Proctor and Gamble or something you'll see or Walgreen you'll see it more like this and it's very consistent and very predictable uh and not as not as risky so okay so we see you know it looks looks fairly healthy based on the scan here what do they do um manufacturer Industrial Hardware security products metal C castings you know again schloff really he he' openly tell I don't really care care what the company's doing I mean unless they're they're you know killing babies or doing something awful I mean really wasn't too concerned with it uh so we go here direct to the 10-year financials first thing we're going to do is look at the balance sheet and you know keep in your head the market cap of this company because it's much easier to to in instead of looking okay it's $16 a share let's see what's their what's their earnings per share what's their book per share just just imagine you're buying the whole company cuz share breakdown is going to work out the same right so just look at the market cap in our case 100 million and we scroll down here to the balance sheet and we see they've got Equity of $80 million or a book value of 80 million so it's right about eight you know 1.2 times as we saw uh obviously cash is the number one thing you're looking for you know cash is King uh the more of it they have the better the more that book bu made of cash uh cuz you can't manipulate cash they got 20 here's the latest quarter 20 20 million in cash counts receivable um we got some inventories most mostly finished goods raw materials 70 million total assets and they've got building machinery construction one of the things I like to look at is how much is it depreciated okay so right here you're going to see um gross property PL and Equipment this line here you going see accumulated depreciation of that PPN and that gives you you know the net number here so when a lot of this has been depreciated generally it's not marked up that much right um you know if if the original carrying cost was 62 million they've already written more than half that down it's not a that's not a terribly inflated figure probably right but if there wasn't much depreciation in it we know that's coming it's going to continue to degrade the book value so you know a little bit there biggest thing to look out for intangible assets right if this makes up the majority of that book I'll generally steer away from it unless it's special situation you know if it's a uh a large acquisition took just took place and I think it's it's it's valuable one but for the most part and tangible assets are things you cannot touch and see so they're often can't be sold and you just kind of want to write that off um if that is the case with it so you know we're seeing decent decent quality of assets right a quarter of it is in cash which is great uh you know 20% of it or so is accounts receivables they'll probably get their inventories they're like a steel and c and casting so you know these raw materials Works in progress probably full valued right steel and the like is not going to depreciate that much and then finished goods you know in a company like this it's not a it's not a technology company it's not a it's not you know Dell or IBM whether merchandise loses 10% of its value every quarter or every month um you know these are probably pretty decent values that they're working with here and if you want to get really in- depth you can read the company's financials read their annual report and see how they're valuing their inventory so you know assets look fairly decent and what is their what are their liabilities look like right this is what this is what sends companies into bankruptcy this is where all your danger is is right here in the liability section it's all the danger all right uh company has no liability they cannot go bankrupt if you don't owe anyone money so accounts payables fairly small but half of what accounts receivable was that'll be cash inflow um very light on the current liabilities which is good so current ratio is positive long-term debt only 4 million so for a $100 million company they've only got $4 million in long-term debt um I would say that's fairly attractive very little debt compared to the company they do have pension and retirement benefits um that they owe out it's another 13 million for total I 32 million so not a great deal of debt here um and you can see the interest payments on this debt on the cash flow statement if you roll down here and look at where is it sorry it might be on the income statement I'm losing my mind interest expense up here on the income statement um boom this is how much money they spend each year paying interest on their debts this is very tiny 200,000 400,000 300,000 you know very little money for $100 million company what's scary is when you see a company has $100 million and that you know this is like a 10 or a 20 so a large portion of their operating income goes out to pay debt so you know here they've got ebit Dove you know 17 million 14 million you know right around there this is very small in relation to that but if this were six or seven or eight or10 million that's the majority of you know what they're bringing the door and what that says to me is H man as soon as their sales figures shrink they're screwed because they can't cover the debts just like you know in your personal life you had a big fat mortgage you probably shouldn't have got you're driving a brand new 750 BMW and you've got everything credit cards maxed out you know if you if your salary Falls a little bit you're going to be in some trouble it's the same way with these companies so uh overall balance sheet looks pretty healthy to me right and and and as kind of an added kicker for this company they make money every year it's not a great deal money but they make a little bit of money you know between five and seven you know we got five and a half eight S million a year um so it's about a 7% earnings yeld if they're doing you know $7 million $100 million company we got a pretty reasonable PE especially by today standards about 14 they're trading just over booked they're not overleveraged with debt they appear to be pretty good value and the final thing we want to check is so it seems to be a reasonably cheap stock at least in relation to what we have today now cheap a really cheap stock which l find in the 880s would be all the same stuff we just looked at okay it's worth 80 million it's it's pretty clean not a lot of debt but the market cap would be like $40 million all right so if we looked at all those other numbers we fig yeah it's probably worth about 80 million cut up right now without ever lose making another dollar they're pretty consistent they haven't lost money we see you they have positive net income each year so we're not worried about degrading that book value and then we can buy it at a discount that's a schla stock now in 2014 with the SB at all-time highs and Wall Street going nuts they're a little harder to find but this is still a pretty cheap stock based on today's standards now the final thing a look at the stock price you can do that up here in the top right you can just go to fiveyear kind of see where we are in relation if you want to see it in more detail I click on the interactive chart if you guys haven't played with this this thing is freaking amazing the interactive chart feature here uh we'll click on the interactive chart and by default it'll just show you the price data over you know the last in this case what 25 years or so so we can look at the Last 5 Years get an idea where the price has been we we're we're pretty near these lows right I mean we're near uh 2009 lows at 12 bucks um you know that I would say March 2009 is a pretty good bottom for a stock right and that was about you know 11 bucks 12 bucks they've been as high as 25 so we're definitely on the lower end of that spectrum and you don't get too scientific of this just say all right well here's their High the last several years here's the low the last 5 years and he really only looked at three years um so let me sorry let me adjust that to three to give even better picture there's three years say here's the high here's the low we want to be kind of down in this area right that bottom third and we definitely are that I we're very much near this three-year low so you know for me EML looks like a pretty good schoth stock to me okay near these lows mostly protected by book consistent earner not Hing cash not issuing new shares Eastern company EML be good saw stocks let me I see we got some questions here let me answer these before we go on to the next one uh sa where do you get industry metrics from EG uh as far as the PE versus the industry uh all comes for the Morning Star data yeah all comes for the Morning Star data and then Charlie puts it all together and does the calculations inside the site Jeff SCH aled about demonstrated earning power can you screen for positive earnings per share nine of the last 10 years um I don't know that you that exactly except using the predictability rankings I mean let me ask Charlie uh Charlie Jeff's asking uh never mind he just went offline all right Norman is there way of getting more detail on what each company includes intangible assets Norman there absolutely is you're just not going to like the answer but I'm I'm going to tell to you anyway cuz I think I mean most of you guys probably don't own 100 stocks so you're willing to do a little bit of homework for what you own here's the magical link you're going to want to go to and Norman it's it's it's kind of a pain but you know if you're into your Investments it won't be um right here SEC reports will take you to a direct link for the reports filed by this company all right so if we click on that take us to the Edgar and what you want to find is the most recent 10K 10K is the annual report and the 10 quarter is the quarterly report um so you whichever you want to look at look we've got a 10K here and just click on the document side and then click on the full form 10K right here at the top and here's the big bad boy and you know when you've been through five or 10 of these you don't have to you don't have to read every single thing we know it goes blah blah blah they go through the risk factors go through a lot of garbage but you know when you when you scroll through and you may want to read the whole thing for the first few especially if you're really interested in the company but you just kind of got to dig through here find what they're talking about inventories um or their balance sheet and they will explain what those intangible assets are so not a lot of fun um you really want to reserve that for okay this is definitely a stock I want to buy as long as those intangibles are decent then you can go in there Norman do you have a link to the cedar too I don't know if it it automatically links in here if it's a cedar instead of Edgar I don't believe it does but you can you can go to the cedor system which is which is Edgar's the the US the SEC system that keeps all those filings uh s r Cedar is the Canadian one and they've got the same it's it's a little bit tougher to work but you essentially find your spot put in your ticker symbol and you can find the same thing so that's Eastern company any any comments on the stock you guys telling me no you're full of crap I mean this is you know this is pretty much what the kind of stock schoss is looking for does this all make sense to you guys it wasn't terribly hard right I mean we barely know what this company does but we know for the last 10 years they haven't lost any money um you can the interactive charts another cool thing you can do so you can look at like uh let's see get on a balance sheet [Music] and looking for total Equity there it is so we can plot the total Equity of this company over the last we'll say 10 years and we see here this company's got a nice history of growing that book value right there's a blip here in 08 which almost everyone had but over the last 10 years done a really nice job of growing that book value uh you know from 40 million in 2005 to 81 million today so even if we overpay a little bit this is a company that should grow that figure and you know this 80 should become 90 should become 100 120 Etc so even if price doesn't catch up as fast our investment should grow Stephen do you use the tangible book bar chart at the top of the page to quickly sque screen for Walter's method yeah you can can do that um you know here's here's tangible book what he's talking about is some of these valuation metrics that Charlie's put in here at the top will immediately tell you how the stock stands up based on these various valuation metrics like the Peter Lynch value uh exceeds the price it's at the gram numberb is right about at it median price to sales is right about at it projected free cash flow is actually a larger figure than is trading basically the more of these you see to the right of the dotted line the better you know it's trading a little bit tangent book is less than what it's trading at and we saw that um but yeah it's a nice quick quick way to scan for it sure Greg would the interactive charts illustrate uh question about earnings for the past 10 years yeah I mean you know there's not a way to scan for it but if you want to look at earnings for the last 10 years uh sure you can just come in here to the the income statement Tab and look at where you you could just search let's see EPS there it is here's earnings per share the last 10 years so you see it's a little bit spotty but it has been positive for all the last 10 years this is the zero mark down here and you could even go back way back to 1995 and you see they've really never lost lost money in one quarters which is a great great find did schoss incorporate any sort of need search for a catalyst for Value realization sounds like not and it was more of a matter of finding a DEC cheap company based on assets wning it out yeah Scott I mean you're exactly right he he from everything I've read from him that he wrote and interviews he did and everything he spoken is is uh you know letters to to his limited partners he really didn't go that in depth as far as trying to find a catalyst I mean he would just look at you know this is an area of the market that's generally that's cheap right now and over the next four years I expect it to come back right and so he didn't have some the complications we've got as far as social media and 3D printing and these new things that we're not sure if they're going to take off or not but you know if you look at the auto industry or you know the steel industry or like mining's pretty cheap right now uh you know microprocessor companies um you know utilities those type of large categories that have been around for 50 years or you know well maybe not micro processors but most of have' been around for decades and will continue to be you just kind of find the areas that are underpriced relative to others and he just sort of had a um faith that that area will come back and it's it's part of the cycle of the market so you know some of these he probably held for 7 8 10 years not a lot of them and some of them got paid in 6 months just the average roll out here is about four months there fando in your screener for Walter SLO stocks the top Guru held stocks are IBM and bvn can you review this finding the new feature valuation map yeah we can look at that uh Wilson how about normalized earnings you touched upon so as far as normalized earnings I don't think there's really a way to scan for those but here's how he'd kind of look at at at at at uh normalized earnings yeah okay Charlie said one of the similar things would be like the Shiller PE ratio but if you're looking at normalized earnings here's how you can do that you can either use the earnings per share up here uh or the net income figure uh I like to value the whole company so that comes easier again me all the calculations he did you can do on a scratch piece of paper with third grade math so this is kind of how he would average out earnings say all right well last year did it 6.9 at 8. six 5 and 1/2 5 and A2 and then a really bad year was one so if I add all those up I get 11 12 20.6 27.5 divided by five is uh what about five and a half so normalized earnings would be about you know 5.5 million so normalize earnings about 5 and a half and you may not want to count I mean 09 is a pretty big anomaly you know without it you're getting normalized earnings of about 7 million 7 A5 million um that's pretty much it so we say you know I'm not counting on this to grow you know 8.20% or whatever it is I'm not going to count the biggest year but just on average you know they're doing about six seven million bucks a year so that's what I'm going to that's what I'm going to base my valuations on all right so you know when it comes time to sell it say this thing was at 50 million right and the market Cap's 100 or the book value is 80 right to say say for instance this this this stock really just got hammered sound like eight bucks this is like $50 million so when the stock climed and got to 15 or so and it was at Book value of $80 million then you might come in and say okay I could sell it this is It's reached a book or what are their normalized earnings well you know they say they're around you know $7 million okay and the company is now an $80 million company well you know the S&P the p ratio for the S&P average right now say it's you know 18 or something like that meanwhile the PE ratio for this stock making 7 million over 80 is only about you know 11 or 12 I'll probably hold on to it you know see if we can catch up with the rest of the market and that's really as complex as you got to get with it uh Boyd good question what was this say discipline if he was wrong about a stock did he ever hang on forever what would force him to sell sell at a loss so he like most guys were pretty stubborn with their picks the only time he sold it is if values change so the reason he favors Book value and asset values of earnings that they change much slower but a good example of this would be like Blackberry right now Blackberry was a stock that I bought back in 12 it like it went to seven bucks I figured it's worth 14 gra up to 14 I sold it it was easy money but then it's been beaten up you know much severely uh for more severely since then so here's what happened we look at the balance sheet this would be a good kind of case study for us um let's see if I can find here we are so as of Feb 13 they had Book value and it's it's depreciated I mean it wasn't like 10 billion then it was about nine and a half billion and then all of a sudden it's at three a. half billion now how do you lose $6 billion excuse me in one year well didn't spend much of their cash GS receivable shrank they wrote down they sold off some some some landed facilities uh the Machinery equipment they wrote that down dramatically they took a billion dollar WR down on those Blackberry 10 phones um they they wrote that out of their intangible assets you see here from three and 3.4 to 1.4 so two billion dollars disappeared like that and it's just you know it's it's it's broken downan done a horrible thing by blowing through money when they weren't profitable they should have you know leaned down their Workforce and lean down their production long before uh but they didn't so if you get a situation like this where you know for what I'm not saying to take it Book value uh just at what what they stated but say you figured the company's worth you know $6 billion back here all of a sudden they got huge write Downs they got massive losses they're just hemorrhaging cash you know then you look and say ah man I own this thing you know at a price at a at a at a stock price equivalent to maybe you know billion doar exclude not even worth that the fundamentals have changed I'm going to get out okay so that that's generally the only times you get out of it um and you try to avoid those situation by buying company like the one we just looked at that have consistently profitable Revenue they're not an exotic they're not a you know they're not a uh in a in a very rapidly changing industry where you go from being the leader to being a joke in a two-year period like happened to Blackberry uh just go for the more you know your steel businesses in the concrete and and shipping and and Mining you know these companies that don't fluctuate as much so let's look at one more um let's see what did I put in this portfolio I don't remember all the other ones are ell I don't remember what that was Richardson Electronics this is another small company you see and most these are going to be small caps and micro caps guys you know you're just not going to get you're not going to buy Home Depot at less than Book value for the most part um you know $150 million company the p ratio is very high but they're trading at a discount to books we're going to take a look at it now once again the financial strength seems to be very much intact here nine out of 10 so very safe the Alman zcore F score uh cash cash to debt Equity interest coverage all really really strong compared to the history of the stock and to uh the industry in general so really strong I'm willing to dig deeper on this one they are they founded in 1947 Incorporated in Delaware engineered Solutions power grid microwave tubes and related components again I don't really know what that is I don't know much about it I'll dig into it later if I decide I want to invest but for now let just take a look at the numbers so again the one you want to keep in mind what's the market cap basing your valuation on so so stick that 147 million in your head and just hold on to it as you scroll through here first thing we see big chunk of cash this is great this is a good sign all right the bigger this number is the better we got 97 million in cash compared to $147 billion market cap so for every share stock you buy two-thirds of it is sitting on the books in cash another 33 million marketable Securities cash and equivalent which is just cash CDs stocks they can to cash $130 million in $150 million company so really really strong okay 130 million uh let's go through the rest of this little bit accounts reable should be fine they always hold about the same level uh 35 million inventories about the same been holding the last couple of years total current assets $25 million now as we scroll through the longer term assets not holding any land no buildings no machinery none of this stuff just a little bit of PPN 2 million in tangibles around 205 million so I mean even if I cut some discounts out of this you know I think they're good for every bit of what probably 185 million or so right easily I mean you can you can trim inventories a bit to be safe you can trim these little tiny and tangibles out but I mean for the most part this is I mean this this this is probably every bit of 200 million right so let's look at what they owe to offset that they have have zero long-term debt is fantastic a little bit of deferred tax revenue uh some other long-term liabilities you know counts payable like they hold every single year no B actually lower than usual um so pretty low I mean you know again they're never going to under understate or overstate their liabilities you can always take that number as is so 26 is is what their number is so you know you take 205 minus 26 about 180 or so let's sit here at 178 I me I I'd pretty much give them every bit of that I mean Max haircut I'm looking at at valuing this thing on book at you know 165 170 million Meanwhile we're able to buy it today at 147 okay so trading in a discount to book all the book looks legitimate it's not made up of intangibles it's not made up of a bunch of inventories are going to depreciate quarter over quarter now let's see what they're doing let's see what they're doing with the money it's always the scary part and doesn't look that bad Okay now what's happened to this company well sales have been absolutely hacksaw in half half if not more since 2009 they're doing 500 500 550 500 and then boom down like 135 million but the cool thing here is even though their sales shrink way down their net income is stayed positive so it's a lean company right they're able to shrink this sgna selling General administrative that's just you know what it costs for office phones and secretarial salaries and office salaries and copy makers you know all all the business expenses they shrank them when sales shrank and so they they they they can maintain they're they're Nimble right they're not they don't have these huge fixed costs um so you know the last last four years they've actually been profitable really profitable in 11 uh we take a free look at free cash flow you know it's a little bit of a better a cleaner picture as far as earnings go and we see free cash flow you know is not it's not wonderful but there's really nothing scary about it I mean even back you know 2009 they were cash flow positive they had an ugly year in in 2012 maybe something you want to dig into a bit to see uh where this came from look like a working capital change and a big you know change in payables here so that probably responsible for the majority of this um put $423 million into Investments that's probably part of it too but you know anyway uh not not bad looking right we're not going to buy this company to be an earner they're not really predictable we're not expecting you know we don't know if there going to be huge growth out of it doesn't look like they're growing but they're maintaining they're not losing money they're actually profitable and we're getting with a discount to book so you know if we're figuring this company is worth what we say 175 call it 170 million if we think they're worth 170 million it's being offered to us at 147 we're getting it at a small discount of around $23 million and 23 out of 147 is what around six around sixth so you know we're looking to get maybe 15% or so on this stock to to to reach Book value right so not a huge discount we'd like it to be deeper um but given what's out there really not too terribly bad I mean it's it's a discount to book when that 15% becomes 40 and 50% you've got really great opportunities um let's look at the interactive chart to see what price has been make sure we're within that kind of three-year low range now we're actually a bit High here um well not not okay so the three-year range we're actually going to low in we're good there the last three years has traded between around 15 and just over 10 and we're at 10 and a half so we're definitely buying on a low side of the three-year range if you really want to find a bottom and go to the fiveyear back to the 09 crisis to see how low it can go uh it got pretty ugly down about three bucks a share but over the last three years you know on the low end and to be on the low end of of a three-year bull market is actually uh pretty strong so you know I'm going to do a little bit more research right I mean one of the things I do I'm trying to figure out what's going on with the company uh I just go to Yahoo finance and they've got a really good filter here now their financial stuff is doesn't doesn't hold a candle to what uh to what Guru Focus has but if you're just looking for like H what happened to the stock any recent news on it it'll list it out right here so if there's anything massively going on their little spiders will find the article and you'll see it right in here John yes the historical uh price charts do take into account stock splits absolutely so there's another one could be a possibility Richardson Electronics r l keep that on your uh watch list again trading at a pretty high multiple to to to earnings but the reason is you're getting you know essentially if you if you shut the business down tomorrow fired everyone sold everything off hopefully you could turn a profit with it you could you could Gordon gecko it uh if you will if you needed to pervine yeah these these would definitely be called cigar butts perine this definitely the definition of cigar but investing it's a stock that you think's worth 14 you're getting it at 10 you're going to buy it flip it out when it gets there it's not you know this is like 1955 Buffet stuff it's not it's not 2014 Buffet but who's looking for the greatest businesses in all the world he wants to hold them forever and ever and ever this is definitely cigar but investing absolutely well we're just about the end of our hour let me turn it over to uh Charlie Tiana he is the architect of gur focus.com the Creator founder CEO programmer and actually answer some of your support emails so if you get one from Charlie that's the boss man you're talking to uh I'll give you guys a couple of minutes to ask questions to him if you have some of the more technical questions you guys were answering he would be able best to tell you uh and then we'll we'll wrap up our SLO presentation hello everyone this is Charlie etn thank you very much for attending our webinar and the Ross has been doing a very good job on this I'll be glad to answer some of your questions uh uh John's asking did Irving car follow the exact same uh procedure uh I would think so Irving car is looking for very cheap companies too he had he was a student of Ben gr together with World water SL uh do we have Guru training problem in Premier Service no we we we don't we do have lots of uh interviews with the gurus and we continue to do webinars and is suggesting we need a normalized earnings of for the last 10 year option but to me the sheer PE the shers uh earnings will be inflation adjusted earnings will be very close to normalized earnings so if you want to look at the ratio of price over normalized earnings you can look at the Sher PE I think it's it's even better than the uh direct direct average and uh the all the all our SC Wilson asking whether the about about Asian company countries yes uh all our screeners and the chart charting tools and the financial data will work well for Asian countries uh they work in a similar way uh yes you can see Sher p on Guru Focus you can see the you can see it on the 10 year Financial page for instance I can show you here uh go to 10e financial page and uh at the bottom of the valuation valuation chart valuation area ratio area the last one is sheer PE and you can also see the charts in sheer PE charts in the interact chart also in here uh one thing uh Ross Ross uh we we could do also after you create the SLO screener you can you can import all these uh stocks into a portfolio by Click by clicking here and by clicking here uh yeah and you can here after you after you uh generate this screener you can add all this into a uh portfolio then you'll be able to monitor the performance of the uh the performance of this portfolio to see how it goes over time yes you can you prev asking whether you can screen over Sher P or p is less than Sher p no we don't have that that that kind of screener but you can screener for shter p less than certain certain value uh you don't have to exlode O OTC but but you can if you want what is Mr schl sh turnover what's what's what's his turnover yeah his turnover is about 25% thanks yes you can access all the guru webinars for replay there are under there are all the past webinars are at home uh tutorials here if you go to the home home home menu and the third one tutorials if you click here all the past AR past webinars are here AR archived here uh yes Shader p Norman is asking should p is calculated for each individual stock yes and it is a premium feature uh you can also screen uh with Sher p uh just like regular p uh yes there's a preset uh water SLO SLO screener here in our Allin screener and uh you can access here go to the Allin screener and there's a a g Focus screens and one of them is water SL screen here we also write articles explaining how we set the parameters okay very good okay if there's no more questions and I'll do this back to do we know any Guru who's presently using schl criteria not as we know for the gurus recover I think okay I think uh Michael price Michael price will be very close to that and he invest mostly in small cap companies uh I think that that's probably close uh John is asking why some some stocks show certain parameters that gram number or l number and others don't it because how uh how the numbers are calculated for instance Grand number it's a it use parameters Book value and earnings so uh then you take a square root of the mo the product of the and so it requires earnings to be positive so if the earnings is not positive you can not calculate gram number and similar issues with lunch uh lunch value and and others do we show Guru strategy we we do show some of the strategies and we explain how they invest the best we can in the profile in description of theirs uh yes when you when you pick water Closs preet screen you it may show this SC it's just one way we set it so that uh because this score is a indication of the financial strength of the company so we we set that way just to make sure that you're selecting from relatively strong companies and you can use other parameters to to achieve similar purpose yeah this is uh this is our pre press and as I as I mentioned yeah AR Disc Go was there to select strong companies only uh asking whether we have a weight screen for nine uh nine Gap earnings uh yeah we actually recently just put into another P we call p uh not without recurring items without non recurring items we will release it it's not released yet yes uh Jack's asking whether webar will be will be will be uh archiv yes webinar will be active archive that explain here it will be and the home and the tutorials link yeah for the next week we'll be we'll be hosting a Peter lunch webinar correct okay very good thank you all very much I back this too all right thanks Charlie and yeah you guys asked about the webinar so next Monday we're going to do uh how to pick stocks like Peter Lynch and this is what um well I'll have it up in a minute but when you guys go to when you go to the guru Focus page every night of the webinar I update these you see here in the top right where it shows you what next Monday's webinar is going to be this is replicating Walter Sloss uh in about an hour it'll say how to pick stocks like like Peter Lynch anytime you can click on this and it'll take you to the registration page um or if you want to come in you know right at the time of the webinar you can click it it'll take you directly to that page so definitely uh check us out next week we're going to do how to invest like Peter Lynch and Peter Lynch is a definite growth guys if you're more of a growth stock investor check that out I mean most people try to balance their portfolio right you want a little bit of growth in there you want some deep value like the schl style you want some Buffet as far as you know holding some some wealth Fargo some coke some really safe dividend money um try to mix that up so we try to cover all aspects of that and Lynch was one of the few value growth guys who actually had some limits on what ridiculous prices he would pay that's why he did so well so we're going to cover that on Monday be sure to register that you'll probably get an email on Friday about it but again about an hour just come click this you can register uh for that webinar I'll be sure you get all the information on that if you guys have any other suggestions things you want covered in one of these weekly webinars definitely feel free to let us know you can email support gurufocus.com or Ross gurufocus.com and um we'll be glad to try to accommodate you as best we can we appreciate all of you coming to the webinar this evening and hope you have a wonderful night a good week in the markets and we'll see you uh next Monday evening