What I'm Reading Now-August 15th edition

I wanted to break this up and do a separate post from my August 14th post for two reasons.

1) These are long-ass posts when I do them all together.

2) I felt like the subject matter of the previous reviews should have it's own post.

So, continuing on, here's more on my latest reads:

Mister Pip by Lloyd Jones -I picked up this book because Michael over at Books on the Nightstand raved about it in a podcast and Ann followed up with a positive review as well; it's a book I would have probably been interested in but never actually read otherwise. I bought it in the airport at Sydney, not realizing that the author is a native of New Zealand and the book was published in Australia, so that was a nice surprise to find that I had a book that was somewhat relevant to my travels.

To summarize quickly (I know I'm not good at this, but I'll try!), it's about a group of island children who are introduced to Charles Dickens' Great Expectations by their new teacher who reads the book aloud to them in class each day, bringing to life a whole new world, completely unlike anything any of them have ever experienced. They live somewhere in the South Pacific, close to Australia from what I could gather, perhaps New Zealand, but I don't think a location was ever specified. There is a civil war of sorts going on (perhaps if I were up on my world history I would have been able to figure out where this takes place) and the book takes a rather dark turn that I hadn't expected. The narrator is Matilda, one of the students, and she is enthralled, fascinated by Great Expectations, particularly it's main character, Pip. As Pip becomes more real to her than her culture's beloved ancestors, more real than God Himself, Matilda's mother becomes increasingly uncomfortable with Mr. Watts, the new teacher, and his chosen material which leads to unfortunate circumstances colliding to create a misunderstanding between the islanders and enemy soldiers, and things go downhill from there. The book is basically broken up into two parts, Matilda's life on the island before things go bad and Matilda's grown-up years, off-island, after.

I have very mixed feelings about this book. I wanted to love it since it had received such rave reviews, but, honestly, I kept forgetting that I was reading it. It wasn't that it was bad, it just wasn't anything I was ever excited about getting back to. I would be looking around the house, going, "I need a new book to read," and then I would see this book and go, "Oh yeah, I'm already reading a book." At the same time, I think it is worth reading, and I feel like there are a lot of things right below the surface of this one that I am just missing, like if I just sat down and really thought about it for an hour or so I could get all my thoughts together and come up with a great appreciation for its profound nature. Matilda is who she is in large part because of Mr. Watts, her teacher, and Mr. Watts is a complex character whose story takes an unexpected twist. It's hard to say too much about this without giving things away. I'd say go ahead and give it a read. It's an easy read, and I can see how it has the potential to be a book that you would really love. I may have to go back and re-read the second half again.

Bonus! Mr. Watts asks the adults of the village to come to class to share their knowledge. They can talk about anything they want, whatever they know about, and at one point Matilda's mother talks about the digging habits of beach crabs. She imparts this wisdom:

"'Wind and rain are on the way if a crab digs straight down and blocks the hole with sand leaving marks like sunrays. We can expect strong winds but no rain if a crab leaves behind a pile of sand but does not cover the hole.

'If the crab blocks the hole but does not scrape the mound flat there will be rain but no wind. When the crab leaves the sand piled up and the hole unblocked the weather will be fine. Never trust a white who says, "According to the radio rain is on the way." Trust crabs first and above all others.'" I think that's pretty sage advice. Now I will have to do some reconnaissance work and see if Hawaii crabs follow the same rules. Don't hold your breath waiting for the results though.

So, for the readers who found my blog by searching for "why do hawaii beach crabs dig holes" and "sideway sand shuffle crabs" perhaps this would be a good book for you to read! Or, perhaps not since I just told you all that it says about crabs.

**Updated 6/2/09 to include

Other reviews (many much more well-researched than mine):

Chris--Book-a-Rama

Chartroose-Bloody Hell, It's a Book Barrage!

Marg at Reading Adventures
Heather J. at Age 30+... A Lifetime of Books

Getting Started in Value Investing by Charles Mizrahi-Finally! I have been trying to read this book since...well, let's see, it was due back to the library on July 29th when my renewal expired...yeah, I'm THAT person, ok?? I'm not proud of it, but the library gets their money from me, so it's all good in the end. (Also, I had to share it with the cat, and he's a slow reader-all that math wears him out.) I'm sure that Mr. Mizrahi would say that paying $7.50 (my library's maximum late fee for an overdue book) for a library book is not a good example of value investing, but I'm not claiming to be his star pupil here. I almost didn't read this book (on several occasions) but I'm really glad that I did. I think it offers a lot of good advice, it breaks down a lot of the confusion about all those numbers you see on financial statements, and it does it all in layman's terms.
Mizrahi tells you how to look at a company and decide if it is a good investment, meaning if you put money into it, will it be worth it in the long haul. He is not talking about playing the market, he's talking about investing Warren Buffet-style and watching your investment grow over the years. There are a lot of common sense things that sort of correlate with how I've been choosing companies to invest in thus far, which made me feel like I'm not a complete moron and I do have a good general sense of what I'm doing...sort of.
I like to invest in companies that I like, companies that I would want to own, which is basically what you are doing when you buy stock in a company. Yeah, I could make lots of money in big oil or pharmaceuticals, but I'd feel icky about owning them. Not that there aren't some great aspects about both, but overall, it's just not my bag. Also, I want to be able to understand what a company does-Starbucks sells coffee, Home Depot sells building materials, Bank of America lends money, etc. I have a basic understanding of how they make their money, and that's another thing that the author and Mr. Buffet both advocate. If you can't figure out what they do or how they earn their money, don't invest in them!

Another piece of advice that Mizrahi gives is buy companies that are doing well and have a history of doing well. If they are not currently doing well, see if you can figure out why-did they have some huge capital expense this year, like equipment upgrades, that is draining all their cash but should result in better figures next year, or are they on their way out of business because they can't compete in their market? I think now is a tricky time to be trying to figure this out since virtually everyone is experiencing lower revenues in the current economy, so current figures aren't necessarily going to be representative of historical figures, but there should be some standout companies that are able to weather even the current economic storm, and those are the ones that you invest in!

Where I perhaps haven't been doing the best job, and where a lot of people get hung up, is picking stocks that are not overvalued. The author lays out a detailed process for figuring out what you should pay for a stock and explains it all very clearly, but I'm still a little confused about this part. I made an Excel spreadsheet and typed in all the numbers they gave in the example in the book, and I got my answer to match their answer, so I knew all of my formulas were right, but I'm just not convinced that I'm plugging in the right numbers, and that was the only problem I had with this book. For most of the examples he gives, Mizrahi has corresponding financial statements or bits of financial statements so you can see where he is pulling numbers from, but for this part, he just tells you what the numbers are for the given company, and I'm not sure that I'm not calling something by one name when on a financial statement it goes by another name. Google and Reuters team up nicely to provide financial information about companies (as an example, go to Google Finance, type in GOOG and hit "Get quotes." Now you can see Google's stock info. If you scroll down you will see "Financials" and "Key Stats and Ratios." Click on the "More ratios from Reuters" link and you get this. Between these two sources, you should be able to find all the numbers you need to come up with a valuation for a stock, but don't do dumb things like I did and enter the "EPS (TTM) vs TTM 1 Yr. Ago" figure (29.33) in your spreadsheet where you should be entering the EPS (15.22) or it will be wonky beyond belief. See, if you're scratching your head going, "What the hell does all THAT mean?" then you should read this book. By the time you get done, you will actually know!) Where was I? Oh yeah, Google and Reuters team nicely, but every once in a while you run across a company for which this information is not available (I think this tends to be for foreign entities), so then you have to go find the company's annual report and look at their financial statements on your own. While the basic layout and accounting principles should be the same, each one is still unique in its own way, and that's where I run into problems, especially when dealing with foreign terminology. Does this count as revenue? Should I count that as a capital expense? Do I need to know gross revenue, operational revenue or net revenue for this calculation? So, I don't know. There is still a lot for me to learn, but I feel like I learned A LOT from this book, and I now have a good basis to build on. Speaking of investing, I might actually invest in this book since I think it would be one that I would refer back to frequently, and I think the advice will remain pretty timeless.