Professor Glen Arnold

Just a quick note: I was very pleased to read in TClarke’s interim management statement today that the expected profit margin improvement discussed in earlier posts (5th -10th Nov.) is on track as customers become more willing to pay in a tightening market for skilled sub-contractors. Here are the key sentences: “We can see a […]

When they first starting discussing a possible deal, Rosner offered to show Warren round a few stores so he could see what he might be buying. Warren turned him down flat. The details of retailing were beyond his circle of competence. But what was definitely within his circle was the financial situation of the company […]

By 1967 Warren is running a very unusual investment fund. Rather than following convention by only taking minority stakes in stock market quoted companies he positions the Partnership as the majority shareholder of a broken textile company, Berkshire Hathaway (with an insurance subsidiary to be added soon). In addition $5m of the partners’ money (about […]

In his 1989 letter to Berkshire Hathaway shareholders Warren mused on his change in emphasis from the qualitative (balance sheet in particular) to the qualitative, a thought prompted in part by the mistake of buying Hochchild-Kohn. “Shortly after purchasing Berkshire, I acquired a Baltimore department store, Hochschild Kohn ….. I bought at a substantial discount […]

In the summer of 1967 Warren described the progress of Hochschild-Kohn as highly satisfactory. Ironically, considering its future success, in the same letter, he was quite depressed about Berkshire Hathaway. In January 1968 Warren stated he was enjoying working with the leaders of companies that the Partnership controlled, and that he was determined to keep […]

In the late 1960s, the thirty-something Buffett is a multimillionaire. For over a decade he has been entitled to 25% of the gain he makes for his investment partners above the threshold of 4%. Because he has averaged returns of around 30% per year and the investment fund has grown to more than $50m he […]

A share bought because it has a low price relative to its average earnings over ten years is one that gives serious cause for concern to Mr Market. What analysts, who are less emotional than Mr Market, have to do is examine the facts and judge if the worries are justified or the share is […]

For some time TClarke has been one of, if not the, market leader for the installation of electrical systems in large, complex and technically challenging new builds and refurbishments. Contracts can range up to £10m. It has a valuable brand and a reputation which may allow some degree of pricing power. But only at certain […]

Piotroski factors allow us to look at variables that collectively indicate whether a firm is suffering from financial distress. So, for example, if there is a combination of losses with negative cash flow, with worsening debt, with falling gross profit margin, and a rights issue, you might be inclined to think that the company is […]

TClarke installs the electric wires/equipment, mechanical items and ICT stuff in buildings. It suffered during the long recession as the building of office blocks, public sector infrastructure (e.g. railway stations) and shop refurbishments was curtailed. Its profits fell year by year. Now that its 1,200 staff have demonstrated their ability to deliver the most sophisticated […]