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Value Traps in Elements of Value “Value trap” is a common epithet for stocks that disappoint or are expected to disappoint. It implies that some investing shortcut has indicated that a security is undervalued, yet it hasn’t performed well. What I dislike about the term is that it suggests that mistakes were made, but not by me. It doesn’t tell me how I screwed up, so I can avoid repeating my mistakes. Shortcuts and DCF analyses fail because of a weak link in one of the four elements of value—(1) profitability, (2) life span (3) growth, and (4) certainty.
Big Money Thinks Small
Joel Tillinghast
About three-quarters of modern humans have a deviated septum clearly visible to the naked eye, which means the bone and cartilage that separate the right and left airways of the nose are off center. Along with that, 50 percent of us have chronically inflamed turbinates; the erectile tissue lining our sinuses is too puffed up for us to breathe comfortably through our noses.
In looking back, Steve Kerr recalled his favorite memory of Jordan and his final Bulls team. It involved a typical Phil Jackson assignment for his players as the 1998 regular season came to a close. “Phil had this great moment,” Kerr explained. “It was the last day of the regular season and he told us, ‘Tomorrow, at practice, I want everybody to write down a few words about this experience you’ve had with this team. It can be anything, you can write a poem. You can just write a letter to your teammates. You can take some lyrics from a song that are meaningful. Whatever. But bring something tomorrow.’ Half the guys brought stuff, about half the guys forgot. I forgot. But Michael brought something and it was a poem that he wrote about the team.” It was the ultimate triumph of Jackson’s effort over the years. Jordan, the game’s angry man and all-time badass, had written a poem. “It was shocking,” Kerr recalled. “What happened was, every guy ended up saying something, whether they read something or said something. Phil told me later that June, his wife, had told him about this and suggested the idea. And so what he did was after each guy spoke, whoever had written something down had to crumple up the paper and put it into a big coffee can. It was like a Folgers can. Then when everybody was done, he lit a match and he lit the contents on fire in the coffee can. The lights were out and there was this glow in the room. And it was like, ‘All those memories that you guys just talked about, those are ours and nobody else is gonna see.’ He didn’t say that, but it was the metaphor. This is ours and they’re gone and they’ll forever live within us and nobody else will ever see ’em.” Phil Jackson burned Michael’s poem?! “I know, that thing would be worth millions right now, right?” Kerr said, laughing at the memory. “Michael’s poem was, what does this mean to you? What does this experience mean to you and where have you been and where are you going? It was so cool. In a legacy of powerful moments that Phil, you know, left with us, that was by far the most powerful one. I’ll never forget it. I was crying. A lot of guys were shedding tears.”
Michael Jordan
Roland Lazenby
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