Professor Glen Arnold

I’ve been looking for investment lessons for today’s investors in the analysis and approach Warren Buffett took when buying the shares in the dominant furniture and appliance retail chain in Utah. When Buffett bought it for Berkshire Hathaway, R.C. Willey commanded one-half of all furniture sales in Utah and one-third of all electrical goods sales. […]

McCarthy and Stone (LSE:MCS) built its first owner-occupied retirement development in Milton Keynes in 1977. Five years later it joined the Unlisted Securities Market and two years after that obtained a full listing on the LSE. In 1988 it sold 2,596 apartments, more than it did in 2019. In 2006 it delisted after being taken […]

My last newsletter explained that McCarthy and Stone (LSE:MCS) was valued by Mr Market at less than net current asset value (I bought at 72p last week). The main reason for the plunging share price is fear among investors that MCS will, for months or years, not be able to sell its apartments.  At any […]

McCarthy & Stone’s (LSE:MCS) shares have fallen from 290p in 2016 to 72p.  The precipitous fall since March has pushed them significantly below net current asset value per share.  Furthermore, the main current assets (valued at £709m) are properties held by the company either ready for sale apartments to elderly folk, rentable assets or land […]

It was seven years ago that I left a tenured professorship to concentrate on investment.  At the time the FTSE 100 was around 6,600. The market as a whole has not exactly moved in a positive direction over those seven years (although there have been dividends of around 3-4% per year). Given the headwinds I […]

The seller of Helzberg Diamonds, Barnett Helzberg was very pleased that it found a home within the Berkshire Hathaway family. He was able to step back from the business and devote more time to his family and philanthropic pursuits. The family were diversified now with a large holding in Berkshire which gained income from a […]

When asked at the Annual Meeting in May 1996 for detail on his discounting method, for example, how many future years does he extend the calculation to, Buffett explained that, yes, the discounted owner earnings is the framework at the heart of investing or buying businesses, but, no, there are no written down calculations at […]

Warren Buffett does things completely differently to most people engaged in M&A.  The Helzberg Diamonds purchase illustrates this well. After the owner of Helzberg Diamonds sent Warren Buffett the financial statements in Spring 1994 a few things struck him.  First, sales had grown from $10m in 1974 to $53m in 1984 to $282m in 1994.  […]

Warren Buffett bought Helzberg Diamonds in 1995 for – I estimate – around $165m – $183m in Berkshire shares (the precise number of shares has never been revealed). There are lessons for today’s investors in understanding what made this company so appealing to Buffett. Today I describe the company’s development leading up to the Berkshire Hathaway […]

Investors need to be cautious when their companies are keen on purchasing other firms. It’s well known that most mergers/acquisitions fail to produce shareholder value.  This newsletter looks at the principles Buffett follows to improve the odds of success. He set these down for us shortly after buying Helzberg Diamonds in 1995. Acquisition by walking around On a sunny […]