Top 10 based on P/B with additional criteria

Market Cap > 50 Crores
3 Yr Sales growth > 5%
Total Debt = 0
Top 10 Based on P/B

All this data is not validated. Please do your due diligence. This is not any stock recommendation

From Charlie Munger to Mohnish Pabrai - Check list

I have started using check list. This is a tremondous tool for every value investor. Please look at this slides from Mohnish Pabrai. He is one of my favorite investors.

http://www.slideshare.net/MShareS/how-mohnish-pabrai-uses-checklists-1984991?src=embed

Burlington Northern Santa Fe - Warren Buffet Transcript

LIZ CLAMAN, FOX BUSINESS NETWORK ANCHOR: Let's get to the story of the day. Berkshire Hathaway making this huge bet on the railroads. One in particular, acquiring Burlington Northern Santa Fe in a deal worth about $44 billion.

Let's talk to the man behind the deal. It was all his idea. On the phone, Warren Buffett, chairman and CEO of Berkshire Hathaway. Hello, Warren, how are you?

WARREN BUFFETT, CHAIRMAN/ CEO, BERKSHIRE HATHAWAY: Hi, Liz.

CLAMAN: What did you do? Did you wake up one day and say, " I think I'll spend another $26 billion in cash and stock for a railroad."? How did this come about?

BUFFETT: It came about because our board had a meeting (ph) scheduled for a year down in Fort Worth. The reason we have three different businesses we own in Fort Worth. And my Debbie Ballsonnick (ph), my assistant said, "Let's do the next one in Fort Worth and check out those companies."

So, we went down there a week ago last Thursday. And I went down a couple of hours earlier -- early because there were two people I wanted to see. One, my friend John Roach and then the other one was Matt Rose over at BNSF.

And while I was over there, we had about ten minutes alone after some vice presidents made a presentation. And I said, "Matt, if you're ever looking for a home for the railroad, Berkshire would make a good one."

And he didn't throw me out of the office, so the next day I made him an offer, and he said he would take it to the directors and the rest is history.

CLAMAN: So, it's a ten-minute meeting and then a week. That's awfully fast, but this is how you operate. You had already owned, of course, about 24 percent of Burlington Northern. What was it that crystalized your belief in that 10 minutes or the vice president's presentation that you ought to buy the whole thing?

BUFFETT: It wasn't -- it wasn't -- you know, I felt good about it from the time we bought our first stock in 2006. But if we hadn't scheduled the meeting down there, probably wouldn't have happened. At least it wouldn't have happened now.

But I -- you know, I like the business very much. I think the management is the best there is, and, like I say, when I didn't get thrown out of the office, I made it specific, and it was a good offer from their standpoint. And they decided to accept it. And now we're going to own a railroad. And we never fool around on things, Liz. I mean, I tell the lawyers, get this thing done, you know.

CLAMAN: I think Debbie Ballsonnick, your assistant who thought it best to put the meeting down there should get the big high five. No doubt at all.

BUFFETT: Well, yes, you'll see we didn't have an investment banker on the deal, but maybe we should have put her down.

CLAMAN: She's smart enough to do it. What is it, Warren, you see in the railroad transport area versus trucking or air cargo?

BUFFETT: Well, the rails move a freight at a much more environmentally friendly way than the truckers do. And they also only use about a third of the fuel. So, it's helping -- it helps our trade balance in the long run. It helps in terms of the atmosphere. It is a very, very efficient, effective, environmentally friendly way of moving freight. And, you know, our rail system is a huge asset to the country.


CLAMAN: BNI, of course, hauls about 10 percent of the nation's electricity-generating coal. Is this, Warren, a bet somehow on coal?


BUFFETT: Well, they haul a lot of coal and coal from the Powder River Basin in the West -- is more competitive, it's lower-sulfur coal than in the East. So, it will be around a long time. But coal, over the long run, coal will diminish in relative importance.


CLAMAN: There's a growing anti-rail lobby in Washington right now. I know you know because you do your homework on this stuff with a push by the shippers to re-regulate the rails -- the Railroad Antitrust Enforcement Act, if you will. Do you have any friends in Washington who assured you that railroads would not be re-regulated? Because I would imagine if the Obama administration went along with the shippers to regulate the rails, that might hurt your investment.


BUFFETT: Well, I would say since the Staggers Act back in 1980, which diminished the regulation substantially, you've had enormous progress with the rail system. You've decreased prices on inflation-adjusted terms significantly. So, I would say that the deregulation that took place starting in starting in 1980 is actually benefited the shippers enormously. And we're moving far, far more freight with using far less fuel, very efficiently. My guess is that people will see the rail for what they are, really an outstanding way of moving freight around the country.


CLAMAN: Cheapest, best way. But then there's cap-and-trade, Warren. Some analysts are very skittish about coal and a possible backlash if cap-and-trade goes through. You mentioned now -- you said, we're going to see a diminishing of coal use. But what do you think cap-and-trade would do to the business if that went through?

BUFFETT: It won't change the composition of what utilities are doing tomorrow or next week or next year. The utilities over time are going to use less coal and probably more nuclear. Our own utility, for example, uses wind very substantially in Iowa.

So, over time, coal is going to diminish somewhat. Now, I think that will hit Eastern coal more than Western coal, but that's a fact of life over a considerable period of time. And that's true whether there's cap-and-trade or not, yes.

CLAMAN: The way you structured this deal, you're using some Berkshire stock for this and then $16 billion, I believe, in cash to pull it off.

The Berkshire board approved a what? -- 50-to-1 split for the Class B(ph) shares. Why not all cash, Warren? Are you trying to preserve your cash at this point?

BUFFETT: I like to have a very comfortable level of cash. This is also the minimum amount of stock we can give and still have people be able to elect a tax-free deal that own BNSF stock currently. If we were going to use -- I don't like using stock, I can tell you that. I don't like issuing Berkshire shares.

CLAMAN: Is this the first time you've used stock?

BUFFETT: No. No, we've used it before. In fact, if you go back to

(INAUDIBLE) deal, that was an all-stock deal. But generally speaking, I'm not enthused about using stock. But using 40 percent and considering the fact we already own some, which we also bought for cash, we're mostly using cash in this transaction.

CLAMAN: You just mentioned the tax-free aspect. Can you clarify a little bit on that?

BUFFETT: Well, 40 percent of the deal will be stock, and everybody will be able to opt whether they want stock or cash. And if less than 40 percent opt for stock, they get an all-stock allocation. And if more than 40 percent, still, people who opt for stock will get mostly a stock allocation. And to the extent they get stock, it will be a tax-free exchange.

CLAMAN: To acquire a company of this size when transportation demand is down, of course, as you said, is really a bet on the U.S. economy. In fact, in the release you called it an all-out wager on the economic future of the United States. When do you see the total recovery taking hold?

BUFFETT: I don't know. But it doesn't really make any difference in terms of this acquisition. If we're going to hold something for a hundred years, the next week or month or year doesn't really make any difference. If we hold it a hundred years, I guarantee you there will be some recessionary years in that period. And it really doesn't make any difference whether it's the first year or the fifth year or the eighteenth year. We're in for keeps.

CLAMAN: It's funny you did this with the rails because just two weeks ago we had Bob Oldstein of the Oldstein Funds on saying the rails are overstating their earnings and underdepreciating their equipment.

Do you see it that way? Did you look into that?

BUFFETT: It's true. I didn't have to listen to that, but it's true any company that has long-life assets is replacing assets that they bought many years ago with things that cost more money now. That's true of our utility business, that's true of any business. It's true -- if you build a plant that 30 years ago had a 30-year life. When you go to replace that same plant, it's going to cost you more money. That's a fact of life in an inflationary economy.

CLAMAN: One year ago in September, we were all so nervous, and that's when President Bush and Hank Paulson pushed through T.A.R.P. Since then, we've had the stimulus. You have said when you treat a patient with such a huge amount of medicine, the likes of which we've never done before, somewhere down the line, we're going to see the ramifications. What do you think those ramifications will be, and aren't you worried to make such a huge purchase knowing that that may come to pass

BUFFETT: I'd be more worried holding cash. I think that if you look at the side effects of the incredible dosage that we've had to give -- and I think that dosage has been 100 percent appropriate; I'm not knocking that. But when you apply the kind of medicine we've applied, you may have sort of unprecedented aftereffects, too. But the one thing about those unprecedented aftereffects is they're going to be very bad for cash. I would much rather own working assets than have cash in a period that well could become inflationary down the road.

CLAMAN: But that's with the headwinds, though. You told me back in May and repeat in June the commercial real estate would, quote, "hit the skids big-time," and now we see that it is. What makes you think the businesses would ship more goods by a railroad when that kind of headwind is blowing in dark clouds? Or is this such a long-term bet at this point that you're not looking the next two years out?

BUFFETT: OK. Thank you, Liz.

BUFFETT: I don't know what will ship next year, but I would bet a lot of money -- in fact, we have bet a lot of money -- ten years from now there will be more people in the United States and they will be consuming more things than they consume now. And that will be more so 20 years from now and 30 years from now.

So, there's going to be goods moving around for more and more people who are going to be consuming more and more of them, and certainly, rails should not only get a share but probably should probably get a little more than their share. It's a bet on the American economy essentially continuing to prosper over time just as it's prospered every since 1776.

CLAMAN: A lot of employers you're taking on here. Universal healthcare is at the forefront of a lot of people's minds. Do you think as you look what the government is attempting to do and Congress, now is the time to tackle such an expensive problem?

BUFFETT: Well, I think it's long past the time we tackle health care.

But one of the real problems is the incentives in the system, and they’re very tough to get to. But we do spend 16 percent or so GDP on health care in the United States. And we have to figure out some way to slow down that particular engine.

CLAMAN: Do you think the wealthy should be taxed to pay for healthcare for all?

BUFFETT: I think the wealthy overall should be taxed more relative to the poor and the middle class.

CLAMAN: Here's a worry, though. The House bill calls for that 5 percent surtax on the wealthy, but it’s not indexed for inflation. Could that end up mimicking the alternative minimum tax which originally was supposed to tax only the rich, and now, as you know, police officers and teachers have to pay it?

BUFFETT: Well, I haven't read the 1,900 some pages in their entirety. I do know they have the 5 percent tax -- I think it's on incomes of over $500,000 or something. You're right, the way I read it, it's not index.

But as a practical matter, I think that the wealthy have had their share of overall taxes, counting payroll taxes diminish significantly in the last 20 years. So I think that if you're looking for more revenue from the citizenry, I think the rich are the place to look.

CLAMAN: And that's you.

BUFFETT: That's me, right!

CLAMAN: You're okay with it?

BUFFETT: Absolutely.

CLAMAN: I always take your temperature each time we speak when it comes to President Pbama. Back in June, the last time you spoke you were very happy with all he's done. Does that sentiment continue?

BUFFETT: I am very, very glad I worked for and voted for President Obama, and I think he's the right man to have in the job.

CLAMAN: You're not concerned about all the spending that's going on at the moment?

BUFFETT: I think it's been -- I think it's necessary. I think a lot of the things we've done in of the last year or 15 months will have aftereffects. But I think they've been very important. We came very close to going into the abyss a year ago. And, you know, they've had to do some very unusual things, and some will have later costs. But they still were the right things to do.

CLAMAN: You wrote in back in August in the "Times" "the dollar's destiny lies with Congress." And with the deficit for 2009 -- listen, the numbers keep changing but $1.4 trillion, 10 percent of GDP high since 1945. Are you buying foreign currencies now or at least playing that carry trade since the dollar's so weak and there are other currencies with better yield? And I know you don't like to talk about what you're doing but, you know, as you see the dollar.


BUFFETT: You're seeing us get rid of a lot of dollars today in exchange for a lot of assets. So, I would rather own physical assets than own dollars.


CLAMAN: OK. As we finish up here, I have to ask, is this Burlington Northern purchase really just a chance to beef up your Lionel Train collection you have in the attic?



BUFFETT: I've got -- I’ve got a pretty good railroad on the third floor, but it’s nothing compared to the Burlington Northern...



CLAMAN: Yes. Matt Rose of Burlington Northern just said he's getting thousands and thousands of railcars to add to that collection.


BUFFETT: Yes. Right! Right!

CLAMAN: Thank you so much, Mr. Buffett.

Gwalior Chemicals Update

Gwalior chemicals came up with an announcement that it will buy back shares at Rs.120 currently trading at 89. What's more interesting is that the promoters would also participate in the buy back offer.

As we all know that it is still undervalued with sitting on Rs130 - Rs 150 / share cash. They are buying back only 25% which is the maximum a company can buy back in a financial year.

Most important questions

- Why the promoters are participating in Buy back? Does that indicate that they do not want to take it Private?
-  and the most important question, how are they going to spend the remaining money. They want to get into Power business and Speciality chemicals. I understand he reasoning getting into Chemical business but what core competency they have getting into power business
- What is the catalyst to unlock this value?

Will keep you more updates

How to Evaluate brands/moats - Warren Buffet thought process

Obviously Warren Buffet has lot of insight ful comments but some comments provide more information on his thought process. 

We all know that for commodity companies we need to pick the low cost provider and for branded companies, it is the share of the mind that matters. How Coca cola is unique company where it has both share of mind, low cost provider worldwide and value to consumers. This has a powerful lalapalooza effect. Read this interview to think about how to evaluate which brands are more valuable?

Buffett: Will developments in the generic brand area hurt Coca-Cola? That’s a terribly important question.


“Generic brands have been with us a long time. But lately they’ve attracted a great deal of attention—partly because they’re doing better and in particular because of Philip Morris’s actions a few weeks ago—when, in reaction to the threat and the inroads of generics, they cut the price dramatically on Marlboro.

“I wouldn’t say Marlboro is the most valuable brand name in the world. Coca-Cola is more valuable—and I think that’s been proven by subsequent events. But Marlboro earned more money than any brand name in the world.

“And all of a sudden, Philip Morris took some actions which dramatically reduced the earnings of that brand and changed the pricing dynamic that had existed in the cigarette business for many decades. And since then, Philip Morris has had $16 billion lopped off its market value and RJR’s suffered accordingly.

“It’s a terribly interesting case study and it illustrates one of the dangers of generic competition. Philip Morris cigarettes got to where they were selling for $2.00 a pack. The average cigarette consumer uses something close to ten packs a week. Meanwhile, the generic was at about $1 or thereabouts. So you really have a $500 a year differential in cost per year to a ten-pack-a-week smoker. And that is a big annual cost differential. You better have something that people think is dramatically better than the generic for the average consumer to shell out an extra $500 a year. It’s happening in other areas, too—whether it’s corn flakes or diapers or a lot of things...

“In our case, I think the Gillette brand name, for example, is far better protected against generic competition than the main product of Philip Morris—although there always has been generic competition in blades and there always will be.

“The average male purchases something like 30 blades a year. He pays 70 cents each if he buys the best—which is the Sensor. That’s $21 a year. The best he can do if he wants something that leaves him Band-Aids on his face and an uncomfortable experience costs him $10 a year. So you’re talking $11 for a 365-day experience...

“I think there’s a generic threat of some sort in any industry where the leaders are earning high returns on equity. It just stands to reason that that’s going to encourage competition.

“And the threat may be accelerating in many industries. But I think that brand names with the right ingredients are enormously valuable. Sometimes infrastructure is a problem for the generics. The worldwide infrastructure for Coca-Cola, for example, is very impressive and very hard for a generic provider to duplicate.

“But if somebody wants to sell a generic box of chocolates in California against See’s Chocolates, that’s obviously somewhat of a threat. And I just hope that they take them home on Valentine’s Day and say, ‘Here, Honey, I took the low bid.’ ”

“Wal-Mart’s selling Sam’s Cola. And Wal-Mart is a very, very potent force. One thing that’s helpful is that they were selling it as cheap as $4 a case here. And I don’t believe that’s sustainable. That’s 162/3 cents a can.

“It’s been a while since I looked at aluminum—and it’s down. But I think the can is close to a six-cent item by itself. The can is far more expensive than the ingredients... Distribution costs, trucking, stocking and all that sort of thing have to be fairly similar. In a 12-ounce can, there’s 1.3 ounces of sugar—which at the domestic price, would be around 13/4 cents per can. And that’s got to be the same whether it’s Sam’s Cola or Coca-Cola.

“The Coca-Cola Company sells about 700 million 8-ounce servings—largely of Coca-Cola, but also of other soft drinks—worldwide every day. If you take 700 million and multiply it by 365 days, you come up with 250 billion or so 8-ounce servings of Coke or its products in the world each year.

“The Coca-Cola Company made about $21/2 billion pretax last year. That’s one penny per serving. One penny per serving does not leave a huge umbrella. The generic is not going to buy the can any cheaper. And they’re not going to buy the sugar any cheaper and so on. Their trucks aren’t going to be any cheaper.”

So while everyone is busy looking at P/E Ratios and making forecasts into the future, Buffett simply looks at the business from a businessman's point of view. Ands that all you've got to do folks to succeed in this game.

True to form: 'I'm a better investor because I am a businessman and a better businessman because I am an investor.'

Awesome information about Walter Schloss - Great Post Market Blog

Inspired by the Walter Schloss: 16 Golden Rules For Investing,  These articles are indeed timeless and have a ton of information that is exceptional.

Here are some excerpts of the article
For sheer uninterrupted excellence few investors can match Walter Schloss. For 45 years, from 1955 through 2000, Walter Schloss has managed  the same investment partnership. The compound rate of return for his Limited.  Partners was 721.5x or 15.7% per year compared to a gain for the S&P Industrial Average
of 117.5x or 11.2% per year. In 1973, Walter’s son, Edwin, joined the partnership and the fund became known as Walter & Edwin Schloss Associates. In 2001, Walter and Edwin decided to close up shop and
liquidate the fund. I sat down with Walter and Edwin and asked them about their careers, why they decided to shut down, and what the future has in store


There are 16 lessons on http://mrmarketblog.com/?page_id=23. All are must read.

Please visit http://mrmarketblog.com/?page_id=23 for more information.