MRM (ASX) Ann: Trading Update

Originally posted by danginvestor ↑

I know Graham's Liquidation Value, I coded the whole thing

But as with most rules of thumb, it's only a guide and must be applied on a case by case basis. We can't really wrote down MRM's vessels book value to 10% or 30% just to feel safe. Not when the company itself have written off some $250M (of the original $1B?) in the past two years.

I guess that as an engineer, you'd want to be doubly sure and certain. And that's all great. But from my little experience with engineers... to double the strength and ensure safety to them just mean a thicker line and a bigger number on the plan. It costs them nothing but costs the builder/owner a whole bunch of cash. Some engineer would just use the one foundation plan regardless of the on top of it - double brick, two storey, slap to first floor... or brick veneer with timber flooring... same $50,000 foundation.

But yes, to each his own and we do what we are comfortable with. Hence my take of Buffett's maxim from Graham: Start seeing a share as a business, and everything else follows.

Judging by the two major shareholders both buying in at around 30 cents, both being experienced OSV operators... and of course my own limited judgment... give me a hundred million and I'll take this sucker private tomorrow.

anywho... happy new year.

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I agree most "engineers" as with "investors" are inept and so don't deserve the title. They are complimentary skills though not mutually exclusive.
Here's the relevant quote right? I don't know about coding but don't need to either.
"This means that a great number of American businesses are quoted in liquidating value; that in the best recent judgment of Wall Street, these businesses are worth more dead than alive.
For most industrial companies should bring, in orderly liquidation, at least as much as their quick assets alone. Admitting that the factories, real estate, etc. could not fetch anywhere near their carrying price, they should still realize enough to make up the shrinkage in the proceeds of the receivables and merchandise below book figures. If this is not a reasonable assumption there must be something radically wrong about the accounting methods of our large corporations."
From my perspective you are arguing that the earth is flat. After a time I will give up pointing out that it is round - you are entitled to your point of view but respect is earned.

Ann: Trading Update, page-39