"Take
your time to buy the companies you
want at the price you are willing to pay."
This statement sums up the investing
methods of Warren Buffett, the world's greatest investor.
Valuesoft has been specifically developed to enable
you to do just this.
Click here
to get your copy of the Valuesoft Investment System
| The
Valuesoft Story
Ever since reading about Warren
Buffett's success in the stock market year
after year, I have had two goals. The first
was to understand how Buffett does it. (This
comes from my background as a research mathematician.)
The second was to describe his methods in clear
terms so that anyone else can do it. (This comes
from my background as a teacher having taught
in universities in seven countries.) |
Stop
Press
A new
test in Valuesoft gives you five times the
earnings forecast accuracy of analysts.
Version 2.1 just released:
More functions, more
templates,
expanded manual, master
list of quality companies. |
Suppose you invest $10,000
in the stock market for an annual return of 30%; at
the end of 10 years you will have over $130,000. If
each year you added another $10,000, at the end of
this time you would have the incredible amount of
$550,000. Of course, if you were like me, you probably
think returns of 30% in the stock market are impossible
over a long period of time.
This is not the case. When you read
about Warren Buffett you learn that he has been averaging
around 30% in the stock market not for 10 years, or
20 years, but for 47 years! Not only that, he has
been doing it with conservative, long-term investing.
To get started on understanding the
investment methods of Warren Buffett I read everything
that I could lay my hands on that was written by Warren
Buffett or about him. After some months, I realized
there were two major problems.
The first problem was
that, even though Buffett has written extensively
on his general principles and methods, he has written
almost nothing about the specific details.
The second problem
was that Buffett has a phenomenal memory. I don’t.
And probably you don’t either. He could memorize
page after page of financial reports and analyze them
at the same time. With his ability he does not need
any stock market software.
After years of research and testing,
I have developed the tools so that now anyone can
begin to analyze stock market companies in the style
of Warren Buffett.
I call the final solution The
Valuesoft Investment System.
Consider the first problem: lack of
specific details. I scoured through hundreds of pages
of material written by Warren Buffett, the chairman
of Berkshire Hathaway. Always the pattern was the
same. Everything would start well with Buffett giving
brilliant descriptions of his general principles.
But when you needed something that was detailed enough
to apply to the evaluation of a specific company,
you would find one of two things. Either there was
not enough information or the information led you
in the wrong direction.
I will give you two examples: intrinsic
value and return on equity.
In the essay An Owner’s Manual
for Berkshire Hathaway, Buffett writes that "intrinsic
value … is the only logical approach to evaluating
the relative attractiveness of investments and businesses."
This is a good start and it gets better. He says that
intrinsic value can be defined simply as "the
discounted value of the cash that can be taken out
of a business during its remaining life." Now
we are getting somewhere.
The next paragraph says that the calculation
of intrinsic value is not so simple and different
people will arrive at different figures. I can live
with that. All I want to know is how he does
it. Unfortunately we don’t get this. Nor do we
get any further indication of how it is done. He closes
the paragraph by saying that "we never give you
our estimates of intrinsic value [although] our annual
reports do supply the facts that we ourselves use
to calculate this value." This tells us nothing.
The annual reports of Berkshire Hathaway are in the
same general form as the reports of any other company
with the financial sections occupying many pages of
dense financial information.
We are left with more questions than
we started with. For example, just what is the "cash
that can be taken out of a business?" Is it earnings,
or cash flow, or cash earnings, or free cash flow,
or owner earnings, or something else? And how do we
estimate its size for future years.
In the Valuesoft Investment System you
will learn how Buffett calculates intrinsic value.
More importantly, you will receive practical software
so that you can do this too. To make the System complete,
I have also described the other methods for calculating
intrinsic value giving their advantages and disadvantages.
You will be able to use each of the methods with the
software and compare the results.
Continuing with the problem of not enough
detail, every book and commentator on Buffett’s
methods says that he bases his analyses using return
on equity. I came to the same conclusion. But when
I went to apply return on equity in practical situations,
often the analyses did not make sense.
So I went back and re-read everything
Buffett had written. Gradually clues began to emerge
that he does not use return on equity … he uses
return on capital!
Suddenly all the pages of analyses and company studies
made sense. In The Valuesoft Investment System I show
you the advantages of using capital instead of equity
and how it will give you a much better estimate of
the future growth of the company. This is critical
in determining whether to invest in a company or not.
However, you will learn that for some purposes return
on equity is better to use, and in other cases return
on capital is better.
These are just two of the ways that
The Valuesoft Investment System overcomes the problem
of insufficient detail in Buffett’s writing.
The System contains many others and will take you
right to the heart of his methods for getting consistent
returns year after year.
The second problem to overcome was Buffett’s
ability to memorize page after page of company data.
Whatever method you use to analyze a company, you
need to remember the information so that you can compare
it with analyses of other companies or analyses of
the same company at later times. So the solution had
to involve a computer program.
Further, the computer program had to
be flexible enough to be able to use data that was
typed in by hand or imported from a data base. Also,
since I intended to offer it to people who attended
my investment seminars and workshops, it had to be
easily learned and used by a wide range of people.
Some years earlier I had designed and
built an option valuation and analysis system based
on Microsoft Excel and so I knew the advantages of
this approach. Armed with this knowledge I designed
a system that will help you perform Buffet analyses.
The system incorporates a software package of functions
that work within Windows Excel spreadsheets. The software
is written with Visual C++ so that the resulting functions
are completely stable and seamlessly integrated within
Excel becoming a part of Excel. They are not macros
that are tacked on.
With this approach, the software that
you receive with the Valuesoft Investment System is
stable,
portable,
easy to learn,
flexible |
and can be combined with
most data that you
already have,
data that you can copy or paste from
the internet,
most commercial databases (eg. Value Line),
with hundreds of other functions within
Excel. |
Finally, you can
|
easily plot your results using the chart
facilities already within Excel. |
The Valuesoft Investment System is in
three parts:
- A
practical manual
detailing how you can invest in the stock market
for maximum long-term results.
- Stock
market software so that you can incorporate the
investment functions directly into any
Excel spreadsheet.
- Examples
and templates showing how you can use the functions
to analyze any portfolio in just a few minutes each
week.
Free Data You can get
all the data you need for the Valuesoft Investment
System on-line and for free from sites such as Yahoo
Business or Microsoft's Money Central. Or you can
use commercial data bases. Many people use Value Line
which is available from libraries all around the country.
The manual comes as an Adobe Acrobat
document so that you can read and search it right
on your computer or you can print it out to get a
hard copy version. Some of the topics you will cover
in the manual include:
- Static
Valuation Methods: Benjamin Graham, Buffett’s
mentor, was the master of these methods. You will
learn his strategies that have been shown many times
to yield around 30% year after year.
- Dynamic
Valuation Methods: With these methods
you will learn how to calculate the intrinsic value
of companies using a variety of methods.
- Earnings
Growth Estimation: You will learn that most
analysts estimates are, well, to put it mildly,
not reliable. But there are times when you can rely
on them. You will also learn simple strategies that
give far better results for estimating the growth
rate of earnings using the proprietary function
STAEGRŽ.
You will also will receive a functions EGROWTH and
EFORECAST that does it all for you.
- Beyond Valuation
Methods: This is the core
of The Valuesoft Investment System. You will learn
that the theoretical
value of the stock does not matter. What counts
is that you can be confident that it will rise in
price so that you can get the return you expect
from it within your investment time frame. You will
receive two functions that show how to find stocks
that will do this. The first function STRET calculates
the expected return from buying the stock. But the
second function TARG is really my favorite. It sets
a target price for a stock. Once you know this target
price you can sit back and quietly wait for the
right time to buy the stock. As Buffett says, wait
for Mr. Market to offer it to you at your price.
New
Functions: Two new functions
STRETDŽ and TARGDŽ have been added to the latest
version to allow you to do stock return and target
price calculations assuming that dividends are reinvested.
Margin of Safety
Functions: Amazing!
Two new functions allow you to automatically incorporate
a margin of safety in your evaluations.
| Implementation
The software component
of Valuesoft can be used in any Excel file.
It takes a few seconds to load. After that,
the functions in Valuesoft become part of
Excel and are used in the same way as any
of the other Excel functions. For example,
it is a simple matter to use the usual Excel
procedures to rank stocks according to their
returns as calculated using the Stock Return
function. The stock
data for Valuesoft has to be entered by
the user. This data can be obtained from
web sites such as Yahoo Business or from
commercial data bases. Once it is entered,
whether for individual companies or for
whole families of companies, the data
is easily updated. Valuesoft comes with
a large range of templates based on well-known
companies including all the Dow Jones
companies. You can use these with the
master list of companies as starting points
to analyse your own choices. Full details
of how to use Valuesoft are given in the
manual with a step-by-step guide for locating
undervalued companies.
Requirements
Valuesoft Investment
Software for Windows requires a PC computer
running under Microsoft® Windows®.
It is not suitable for Mac computers. |
These are not just abstract principles
and methods. For a start, you can easily implement
each one using functions that come with the system.
Furthermore, they have been thoroughly tested and
studied in three ways. The principles
- are based on my study of everything
that Warren Buffett has written,
- are grounded in common sense (once
you see them you will wonder why you were not always
using them),
- have been tested using long-term,
scientific studies of the marketplace.
Other functions in the Valuesoft Investment
System include:
Covering period: This
practical function calculates the number of years
required for the sum of the discounted future earnings
to equal (or cover) the price of the share. For some
well-known companies it can be as short as 4 or 5
years, for others it is hundreds of years. Very useful
for comparing companies.
Expectations Risk Index:
This function calculates a measure of the proportion
of the share price due to projected growth rate of
earnings compared to the historical growth rate. A
recent study showed that stocks with a low expectations
risk index outperformed those with a high index.
Graham’s Intrinsic Value
Formula: This is a formula developed by Benjamin
Graham, the father of value investing, giving a different
approach to the intrinsic value of a stock. You can
compare the results with the methods used by Warren
Buffett for extra security.
Bonus:
Option calculations The granting of options
to the management and employees of companies is having
a substantial effect on the earnings of the companies,
an effect not widely recognized in the marketplace.
So that you have a better opportunity of gauging this
effect for yourself, Valuesoft includes 19 functions
for calculating the price of options and their sensitivities
to market movements. Functions such as these are usually
only found in software costing $1000 or more.
"At last, a system that identifies great companies
and tells you when to buy."
It even tells you when to sell.
My investment
record Over the period from 1 January 2000
to 30 June 2005, allowing for deposits, withdrawals
and transaction costs, a $10,000.00 investment in
my portfolio would have grown to $31,979.12 over this
period. This represents an average annual return of
23.54 per cent.
Over the same period the S&P 500
Index decreased from 1469.25 to 1191.33 which is equivalent
to $10,000.00 decreasing to $8108.42 giving an average
annual return of minus 3.74 per cent. Click
here for the original report.
In a nutshell, my total return was over
300 per cent over 6 years compared to negative return
for the S&P 500.
This is my recent track record using
the Valuesoft Investment System. Of course, these
returns are not guaranteed. But here are what others
are saying about Valuesoft: click
here.
I developed Valuesoft for my own investing.
I wanted a practical step-by-step method based on
the ideas of Warren Buffett.
One thing led to another and I ended
up making it available to other investors. This system
is the only rational way I know of finding great companies
at low prices.
What is the value of a system that has
earned money each time I have used it for the past
three years? It is at least $2,000. However, at the
moment I am selling the latest version of Valuesoft
for $97 $75. (All payments in U.S. dollars.)
But there is more. Order before April
30, 2008 and you get:
1. A No-Questions Asked,
100% Money-Back Guarantee!
I completely believe in this system.
It is the only way I know of sifting through the market
and finding great companies that will give you excellent
returns year after year. I guarantee that
the Valuesoft Investment System will make you a better
investor within 90 days: more knowledgeable, more
confident, more ability to pick great companies selling
at low prices.
If not, let us know within 90 days and
we'll gladly give you a complete and immediate refund
of your purchase price. No questions asked; that's
our guarantee to you.
2. Dow
Jones Companies New with Version
2.1: a $50 value.
Complete Excel templates with ten years of data with Valuesoft return and
target price calculations are included with every purchase. You can accept
the forecasts or override them with your own estimates.
3. A
Master List of Quality Companies New
with Version 2.1: a $45 value.
This is a list of companies that have
all the potential of making great year-after-year
returns. Selected from a data base of 10,000 companies,
these companies have
- high return on equity,
- high growth rate of earnings,
- solid growth rate of revenues,
- a high level of earnings stability
(STAEGR).
On top of this, they have depressed
price-earnings ratios compared to historical levels.
This list will be updated at regular intervals and
you get access to it FREE for the next 12 months.
4. Customer Support!
A full 12 months customer support. If
you have any questions about installing or using the
Valuesoft Investment System at any time, send me an
e-mail at support@sherlockinvesting.com.
Payment is very simple using
credit card over our secure server. Start by
clicking on the order button. After that you will
be guided through the steps. Nothing is finalized
until you include your credit card details and review
the information.
Note: Everything is delivered
via the internet. When your credit card is processed
a screen will be displayed with the download details.
For future reference you may like to print the screen.
You will also be sent an e-mail with the download instructions.
If you did not receive the instructions, please e-mail
support@sherlockinvesting.com.
Remember, everything is fully guaranteed. If you have any
questions at any time, e-mail me at johnp@sherlockinvesting.com
Wishing you happy and successful investing...now, and for the rest of your life,
John Price
P.S. The Valuesoft Investment System
is suitable for all stock markets and is currently
used in countries around the world including Australia,
Austria, Belgium, Canada, France, Germany, India,
Indonesia, Ireland, Italy, Japan, South Africa, U.K.
and U.S.A. For users in the U.S. its cost is a tax
deduction under IRS Code Section 212(1), (2) as an
investment expense. Consult your tax advisor for confirmation
as well as tax deductibility in other countries. Generally
it is tax deductible against income from your investment
activities.
STAEGRŽ, STRETTM, STRETDŽ,
TARGTM and TARGDŽ are trade marks and registered
trade marks of Dr. John Price.
Sherlock Investing's commitment to privacy.
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