He links to a 1997 interview with Charlie Rose.

This interview reminds me how good Charlie is interviewing an investor. Many financial journalists don't manage to get as much out of their subjects as Charlie does.

"In almost every activity in life people try to go where the outlook is best…However, my contention is that if you are selecting publicly traded investments, you have to do the opposite. You are trying to buy a share at the lowest possible price in relation to what a corporation is worth. There is only one reason a stock is being offered at a bargain price: because other people are selling. There is no other reason."

(From the Preface to Investing the Templeton Way)

There are already countless articles out there. Here are just a few:

Articles and Obits

Bloomberg

New York Times

Daily Telegraph

Washington Post

Globe and Mail

Books

Investing the Templeton Way: The Market-Beating Strategies of Value Investing's Legendary Bargain Hunter

Templeton Plan: 21 Steps to Personal Success and Real Happiness

Worldwide Laws of Life: 200 Eternal Spiritual Principles

Discovering the Laws of Life

And remarkably, a negative post from a nasty, little blog that uses quotation marks in place of conversation, and preaches to the choir on the evils of preaching and choirs.

GM Weighs Layoffs, Sale of Brands

Merrill May Sell Bloomberg Stake, Some of BlackRock

Glaxo Seeks Guidance from Health Systems

Immelt Defends GE’s Wide Reach

Firms Train for EU Raids Amid Price-Fixing Probes

Pay Your Own Way: Firm Lets Workers Pick Salary

Gas Stations Hit Skids

Retro Ploy on Wall Street

Why Bother?

GM Weighs Layoffs, Sale of Brands

Only if you’re interested in General Motors (GM) or automakers. The branding thing has always baffled me, not just for GM but for carmakers generally. It seems poorly done, confusing, bound to lead to cannibalization, etc. – but I’m not a marketer.

By the way, John Bethel’s Controlled Greed is the best blog for GM shareholders.

Merrill May Sell Bloomberg Stake, Some of BlackRock

Shows the cost of being in a position where you need to make a deal. Who will buy the Bloomberg stake? Don’t know. Probably not Berkshire – it’s likely Bloomberg will be too expensive for Buffett’s taste, though I imagine it’s the kind of company he’d like to own at the right price (it’s also sized right).

Glaxo Seeks Guidance from Health Systems

Read for a sense of the trends in government and medicine.

Immelt Defends GE’s Wide Reach

Combine with 24/7 Wall St’s post and enjoy a GE twofer.

Firms Train for EU Raids Amid Price-Fixing Probes

Funnier than fiction.

Pay Your Own Way: Firm Lets Workers Pick Salary

Neat idea.

Gas Stations Hit Skids

Can you believe it? An article involving gas prices that contains info you probably didn’t know.

Retro Ploy on Wall Street

Because I’ve always thought rights offerings were underutilized and overstigmatized.

With $35bn to Spare, Buffett is Poised to Feed Off the Bear

Blogs

GE’s Earnings, Immelt, And Jack’s Ghost (24/7 Wall St)

Controlled Greed: Life of the Blog (Controlled Greed)

Six Flags Is No Bargain Even at a Buck (Seeking Alpha)

Don't be surprised if you see posts from me on some of these stocks, especially note Whirlpool (WHR), American Eagle (AEO), and Capital Southwest (CSWC).

Read Controlled Greed's "Life of the Blog"

What did you like most about this site? The blog? The podcast? Which posts? Which episodes? What kinds of subjects? What would you like me to do that I haven’t yet done?

How can I make this site better for you?

Thanks.

King of Beers? Only in America

Is Merrill Shopping Its Bloomberg Stake?

Is Bill Miller Toast?

Nightly Business Report Transcript: James Grant Interview

Blogs

BCE Reaches Final Buyout Agreement: What Next? (Controlled Greed)

A Flurry of Appearances for Bruce Berkowitz (Circle of Competence)

My $650,100 Lunch with Warren Buffett

UnitedHealth Ends Options Suit, Cuts 4,000 Jobs

Circuit City Shares Fall as Blockbuster Yanks Bid

GM Shares Fall to Lowest Price since 1954; Merrill Suggests Bankruptcy

Microsoft, Yahoo’s Winding Road

Blogs

OneBeacon, White Mountain File Shelf Registration (24/7 Wall St.)

Fat Pitch Financials Portfolio Mid-Year Update (Fat Pitch Financials)

Some Blogging-Related Quick-Hits (Controlled Greed)

Starbucks to Close 600 Stores; Cut Up to 12,000 jobs

Steak N’ Shake Appoints Biglari Chairman

Seeking Alpha / Micovision Story

I didn’t have an answer for him.

Bloggers stop blogging for a lot of different reasons. But, that wasn’t the question? The question was why investment bloggers stopped – especially good investment bloggers. Why, once established, and with some number of regular readers would an investment blogger stop blogging?

Good question.

I still don’t have a good answer.

My own experience with blogging has been mixed. I’ve had some wonderful exchanges with readers and especially with other bloggers. But, I’ve also had a lot of listless exchanges. A lot of people write to you – they don’t comment so much on my blog as email me directly – with questions that aren’t really questions. See, they want a certain answer, and if you don’t give them that answer – well, I’ve found almost everyone to be exceedingly polite. However, very few people are exceedingly interested in actually changing their mind. Very few people write to me asking for advice with the intention of actually allowing that advice to enter into the equation. It’s a strange feeling. Someone writes to you, you write back, they thank you profusely, etc., etc., etc. but you also know they’re going to do exactly what they intended to do before they wrote you.

I must sound awfully jaded. But, it really is a strange dance you have to experience to understand. It makes you wonder about the silent majority of readers who don’t write. Has anything I’ve written ever made a difference to them – ever entered into their thought process at all – about any stock, investment, approach, etc. I really don’t know. And I had intended to be a source of information (and improvement) rather than entertainment.

One thing I’ve been very lucky with is the cool-headedness of people who email me (and comment on the blog). When I first started the blog, the specter of ranting readers was the thing that worried me most. I’ve read other blogs. I know that people with the most extreme views will tend to be the most vocal promoters of those views. I know that the anonymity of the internet encourages more ranting, more raving, and more ad hominem attacks then ever occur face to face.

And yet somehow this blog has tended towards civility.

I didn’t expect that.

If the most vocal readers are as cool, calm, and collected as those I’ve exchanged emails with – the silent majority of readers must be on sedatives.

Overall, I’ve been impressed with my readers. And somewhat less impressed with myself. It took a little while to find my voice, and even then, I wasn’t very good at balancing the blog format, my readers’ interests, and my own interests. On several occasions, I made grave mistakes – usually by writing about something that interested my readers more than it interested me. My biggest mistakes in this area were when I had the most traffic data available. Knowing what drew the most readers was more of a curse than a blessing for me. Some of my worst posts were written with half an eye towards what I thought people wanted to read about. That was a mistake. And it was mine – not theirs. The problem wasn’t that people wanted to read about certain inherently unimportant topics as much as that they wanted to read about topics I wasn’t well-suited to writing about.

The balancing act of writing for yourself and for your audience is tough. In some ways a blog makes it tougher than it is in other media. However, a blog does make it a lot easier to put something, anything out there. Whatever your doubts about a certain post, topic, etc. you’re never very far from posting something.

If you’re writing a book and you’ve got the same doubts, you might very well shelve the whole project mid-way through, without any feedback at all. With a blog, you’re constantly taking baby-steps and you’re constantly getting feedback.

What’s been my worst experience with blogging?

(Yes, I’m interviewing myself now; do you have a problem with that?)

My worst blogging experience was when I was – pretty early on – putting my posts in a lot of different places in a lot of different forms, because one website or another would ask if they could use it. I always said yes. For the most part, that worked out okay. It’s never quite as good as when you have it on your own blog, because you don’t have the same level of control. While one or two high quality sites ran things I wrote, there were some sites that really weren’t up to snuff – and I should have said no to these sites. In the beginning, I don’t think I said no to anyone.

One site distributed my posts in all sorts of places, including message boards for individual stocks. It got me traffic. For a brief moment, I even thought I should do the same thing myself. I quickly learned that wasn’t a good idea. All in all, it was a horrible experience.

This blog isn’t really a place for people long or short a certain stock to make their case. The emails I got during that period were the least intelligent, the least fun, the least everything.

It completely sapped my interest in the site.

What’s been my best experience?

(Thank you for asking)

Writing to and hearing from people who are new to investing, or new to value investing.

In this respect, the podcast was a lot of fun – and almost all of my best email exchanges came from people who listened to the podcast. Other aspects of the podcast were less fun – especially as that’s not really a good medium for me (if you heard any of the podcasts, you’d know what I mean). But, I have to admit, I did get the highest highs from the podcast. Nothing I did for the blog ever quite rivaled some of the stuff I did for the podcast in terms of interesting me. Whether it interested others or not – who knows?

So why do bloggers stop blogging?

I’ll get back to you on that one.

So I thought maybe gas prices would like to tell us something about politicians for a change.

These “pump points” are based on gapitem data. I’ll explain gapitem in greater detail in a later post. For now, just know that it’s a unit of fuel consumption equal to gas consumption per person per day.

Gapitem = Gas per capita per diem

As the following scores use gapitem, a decrease in per capita gasoline consumption is just as effective in scoring highly as a decrease in the price per gallon of gasoline. The converse is also true – higher consumption, even at the same price per gallon, would result in a lower score.

Tree-hugging environmentalists will love this; laissez-faire capitalists not so much. The latter have a legitimate beef in that people may increase gas consumption for reasons other than necessity – and therefore gas consumption is not entirely non-discretionary. In that sense, higher gas consumption isn’t quite as ubiquitously onerous a burden as say increased tax revenues – but, it’s awfully close.

All scores are from 0.0 to 10.0 with 10.0 being the highest recorded score in that category.

Remember, these scores reflect increases in real per capita GDP after paying at the pump.

Presidents

1. Bill Clinton (10.0)
2. Ronald Reagan (8.6)
3. Jimmy Carter (5.9)
4. George W. Bush (4.2)
5. Gerald Ford (2.7)
6. George H.W. Bush (2.0)

Congresses

1. ’94 Republican Majority (10.0)
2. ’54 Democratic Majority (8.9)
3. ’06 Democratic Majority (0.0)

Party Presidents

1. Democratic Presidents (10.0)
2. Republican Presidents (6.2)

Party Congresses

1. Republican Congresses (10.0)
2. Democratic Congresses (8.2)

Majorities

1. Anti-Administration Majorities (10.0)
2. Pro-Administration Majorities (8.8)

Terms

1. Second-Terms (10.0)
2. First-Terms (4.5)

Real per capita GDP after paying at the pump tends to grow faster when the Congress opposes the President.

In other words, agreement in Washington tends to encourage stagnation in America.

Why?

No comment.

The Company invests in a number of financial securities including debt instruments, preferred and common stocks, a joint venture, and a limited partnership that primarily invests in other limited partnerships who invest in real estate investment trusts and marketable securities…Certain preferred stocks are bought and sold on a short-term basis with the sole purpose of generating a profit on price differences…These securities are valued based on quoted prices in inactive markets… the Company held…ARS classified as available-for-sale securities. Auction rate securities are generally long term debt instruments that provide liquidity through a Dutch auction process that resets the applicable interest rate at predetermined intervals in days.…The recent uncertainties in the credit markets have prevented the Company and other investors from liquidating their holdings by selling their securities at par value... In the first quarter of fiscal year 2009…auctions for substantially all of our auction rate securities portfolio…began to fail due to insufficient buyers.

The candle company in question is Blyth (BTH). Jonathan Heller, formerly writing as Clyde Milton, recently wrote about Blyth. I wrote about the company back in September of 2006.

Read Jonathan’s new post

Read my old post

Despite Blyth’s ability to find imaginative new ways to lose cash, the stock is worth a look.

There may be a lesson in all this. There are certainly a number of bad puns.

Value Discipline: Recurring Revenues and Industrials
Bill Rempel: Fundamental Portfolio Struggling YTD
Cheap Stocks: Premier Exhibitions (PRXI) – Value Not Without Controversy
Cheap Stocks: Net/Net Index In Positive Territory

Some Books Worth Reading

Investing The Templeton Way
The Little Book That Builds Wealth

The Fed is in a very tough position. This is a credit problem. It's serious. It's hard to say what the result will be - but it could potentially be very bad. You can have some pretty catastrophic things happen when people start to panic - as far as what happens with money and how all sorts of things can seize up at once. It's really a psychological problem - a spiral of negativity and panic that feeds on itself. People start to do irrational things and then others respond in irrational ways to their irrational actions and so on and so forth.

The possibility of terrible outsized effects from the kinds of problems we're seeing with Bear Stearns etc. is real. The housing problem is real. The economy can deal with a lot of things clogging up the system, but credit is probably the toughest.

This is the most serious threat the economy has faced in a long, long time - much more serious (to the economy) than the September 11th attacks. People always want to see just one catastrophic event - point to that - and explain away horrible problems. It doesn't happen that way. You have a whole climate of negativity, fear, panic, etc. that feeds on itself and causes real problems. It really does come down to psychology. And it's amazing how fast it can happen.

It's something that either achieves a sort of critical mass or it doesn't. It's like a riot. Either it never really gets out of control and we all forget about it, or it builds on itself and it gets bigger and uglier faster than anyone could imagine.

I don't worry about single issues. The price of oil alone means next to nothing. Housing alone means something, but it's really how housing indirectly influences everybody's behavior where you get problems. A stock market crash means next to nothing to the economy. But the totality of some combination of these things - the climate created - that means everything.

We are on the brink. We haven't seen such potentially perilous economic times in a long, long time. But if the peril passes no one remembers it. People remember 1929 because the peril didn't pass - because that climate of depression fed on itself in so many horrible ways that things got worse and worse not better. It seems almost inevitable in the past - but there was a point (no one knows when at the time) where you were on the brink, where terrible things lasting a long, long time could have happened (and eventually did) where you could have broken a downward spiral.

People always want to look at just one "black" day and say that was the day when "it" happened. It doesn’t work that way. What you really have is a series of unfortunate events; if people made different decisions at a lot of different points, things could have been better. But – like in a riot – everything around you is encouraging stupid, irrational behavior. The climate starts to drive the bad decisions that create the climate that drive the bad decisions that create the climate.

Has the Fed been too slow? Yes. It should have cut to below where we are now months ago. People would have said that was drastic. And it would have been drastic prevention.

I know you can prevent an economic disease. I'm not sure you can cure one.

Eventually the ravages of the disease create the right environment for a cure - actors start to act rationally and positively because it's so obviously profitable to do so – their greed overcomes their fear.

I'm someone who really believes the Fed and anyone else who thinks they can/should influence the economy has to "shock" the system before the spiral takes hold. There's always talk of "order", "prudence", and "measured" action. Psychologically, that stuff doesn't work. Only shocking action prevents true catastrophe.

I've always been skeptical of the Fed's ability to manage the economy. But, if and when it does something drastically unexpected and unexpectedly drastic it can potentially prevent a fearful spiral.

Is it too late for that now?

Maybe.

But that's the one thing I think the Fed can do - the one place where it can really make a difference. In a perfect world we would have rates well below where they are now months ago. In the fall, you could have cut a lot deeper. That would have been a good bet to make, because the one thing - above all else - the Fed must do is try to prevent the truly catastrophic from happening.

All the rest - the careful managing of unemployment, inflation, growth - and expectations is basically BS. You either get luckier with the climate you have or you don't. But avoiding the super spirals - the truly catastrophic events - you can do something about that in the embryonic stages and you can still try to do that now.

They'll probably be too prudent though. Even a full percentage point cut now won't be shocking.

We might manage to get out of this fine. I don't know. But it's the riskiest position we've been in for decades. While the probabilities may not be tilted toward catastrophe, it's a possibility, and the right bet is to throw everything against that possibility, because the cost of failing to do so is too high.

I think it's still probable we'll have problems that are relatively short-lived (in history's eyes, not ours) and can be overcome. But we are currently in a high risk situation. Although the odds of catastrophe may be small, they are real.

Regardless, the principles of value investing remain the same.

The best thing to do when you can't understand the world is to try to better understand yourself.

Invest in yourself during times like these. It'll pay off at some point.

Good assets may not necessarily be liquid assets. As a result, good decisions do not necessarily lead to good outcomes when an actor is dependent upon liquidity. An actor is dependent upon liquidity whenever liabilities are great relative to assets. However, an actor can avoid insolvency and make good decisions that will almost certainly lead to good outcomes if the actor can studiously avoid disbursing cash or other assets to meet obligations in the near-term. An actor who can finance an asset by selling a thirty-year zero-coupon bond does not have to worry much about liquidity. Any actor so financed weds its destiny almost entirely to the intrinsic value of the asset – and only the intrinsic value of the asset. All other worldly concerns seem to melt away. This sort of financial nirvana is rarely achieved by any actor who has tasted of the sweet, sweet nectar known as debt.

Actors – like addicts – can develop a dependence through regular use. There is no such thing as non-habit forming debt. Debt is so addictive precisely because it is so useful.

Wonderful businesses have been brought down by a lack of common sense and an abundance of debt. Great businesses – even some simple, great businesses – have been brought down by debt.

What their competitors could never do to them, these great businesses did to themselves.

Berkshire Hathaway (BRK.B) bought Fruit of the Loom out of bankruptcy. It’s hard to bankrupt an entrenched underwear business. Only debt could kill a business like Fruit of the Loom or Hanes (HBI).

So how can investors evaluate a debt-laden liquidity whore? For the most part they can’t.

Investors never like to hear that. But it’s true.

Hanes may have debt; but at least its business isn’t directly dependent on liquidity. Like Fruit of the Loom, Hanes can go bankrupt, but Hanes can also be evaluated without reference to all sorts of variables beyond the company’s control. An investor can decide if the company has too much debt without giving much thought to capital markets, interest rates, commodity prices, and all the other much discussed macro variables. The further an investor ventures from the specifics of the business he is evaluating the more unstable all of his assumptions become. As he stacks unstable assumption upon unstable assumption, he builds a teetering tower crowned with an intrinsic value estimate that could prove perilous.

If you can make successful macro bets, make them. If that’s your strong suit, stick with it. But don’t confuse the business of evaluating businesses and picking stocks with the business of guessing which way the macro winds will blow.

You don’t need to have an opinion on every stock out there. It’s no mark of shame to admit you can’t come to actionable conclusions within whole industries. If you knew Bear Stearns (BSC) was a short – good for you. If you could admit Bear Stearns was beyond your comprehension – even better.

Investors have a hard time roping off the areas they can work within from those they can’t. Too many of us venture too far afield. A few good decisions can make a fortune. A few bad decisions can lose one.

You’re going to make mistakes. But there’s no need to make them in unfamiliar territory.

The temptation to take a stand, either with the market or against it – with the bulls or with the bears – is always great. Too great for most investors.

In the days and weeks ahead, most people will be focusing on Bear Stearns. However, most investors would do better to focus on themselves.

Now is a good time to examine how honest you are with yourself. Admitting when you’re wrong is good. Admitting when you don’t know is better.

What lesson will you learn from all this? How will you become a better investor?