Professor Glen Arnold

In 1970 the investment writer “Adam Smith” (George Goodman) received a letter from Benjamin Graham about an investor he’d never heard of who lived in Omaha.  Graham suggested he go and talk to him.  When it’s the “Dean of Wall Street” telling you it’s worthwhile listening to a talented investor Adam Smith realised that he […]

Very early in the twentieth century a young Rose (founder of the Nebraska Furniture Mart) woke one night in the family’s two-room log cabin home in a village near Minsk to find her mother already hard at work making bread.  She said to her mother that “she couldn’t stand that she had to work so […]

In the decade or so after breaking up the partnership, that is the 1970s and early 1980s, Buffett and Munger contemplated fundamental principles for managing the collection of businesses and shareholdings they had gathered, and for the way in which they were to treat shareholders.  These ideas formed the foundations stones for the creation of […]

The period between Buffett acquiring Buffalo Evening News (1977) and Nebraska Furniture Mart (1983) illustrates how much value can be added to a portfolio by allowing companies that are fully owned to carry on with the team of trusted managers with very little interference, but to use the money they generate to buy other great investments.   Also, […]

Today I’ll start a series of 5-6 posts describing one of the greatest investments of all time, when Warren Buffett’s Berkshire Hathaway acquired 90% of the Nebraska Furniture Mart.  This case study has a lot to tell us about recognising strong economic franchises and about the importance of having good people (competent and with high […]

The team at N Brown (LSE:BWNG) sell clothes and other items in a competitive environment.  But that has not stopped them producing, annually, underlying profits north of £50m in recent years.  They seem to have created a strong culture within the organisation.  Comments posted on Glassdoor by employees are generally positive. Two-thirds would recommend N […]

I’ll use Piotroski’s nine factors, aimed at a detecting a trends in financial distress risk, to gather some thoughts on N Brown’s vulnerability to running into serious problems. Note however that there is a difficulty in using Piotroski factors here.  They were designed for a commercial non-financial organisation. Here we have a company with a part that […]

Today I’ll examine if N Brown (LSE:BWNG) achieves high returns on tangible assets on a consistent basis. This will be followed by valuations informed by the return on net tangible assets data. Selected data from the income statements and balance sheets £’000s 2018   2017   2016 INCOME STATEMENT Profit after tax 12.5 44.3 54.3 […]

With owner earnings we are trying to obtain the earnings that, in future, would be left for shareholders after the managers’ use of the cash generated to pay for items of expenditure to maintain the strength of the economic franchise (e.g. additional capital items, additional working capital, marketing spend, R&D and staff training) and to […]

N Brown (LSE:BWNG) has made average earnings per share over the last eleven years of 21.4p.  Its shares now stand at 142p for a market capitalisation of £402m. Its business model is to generate sales by selling clothes, etc., without looking to make a profit directly from such sales – it has lost between £20m […]