A Story About Great Production

When I started out in accounting I had a job as a controller at a restoration contractor. They would provide emergency mitigation for water damage jobs, mostly residential damage. Every now and then we would get a call for a larger commercial job. For those of you that don’t know, the insurance company (who paid the bill) required a Certified Water Loss Contractor and I carried that certificate for the company. I would get to go out on that job and do the write-up, engagement process, job set-up, monitor the job site, and the final clean up. It pretty much took every guy in the company (about 12 of us) to do the work. It was here that I learned one valuable production principle.  Machines run circles around humans and they have great production capacity.

One of the requirements was the movement of air at the job site. To remove moisture, you need dry air and air movement. It is instinctive in us because when we wash our hands and there’s no paper towel around, what do you do?  Shake your hands in the air to dry them. Now most modern bathrooms use hand dryers that blow hot air. Anyway, we would set a device called an ‘air mover’ which is nothing more than a large industrial fan. It could move large volumes of air and if set in tandem in a circular pattern in a large room, you could create a low level vortex of air movement. It was really interesting stuff at that time. Well, our fee which is actually industry standard was $25 a day for that air mover. In a typical commercial job, there would be between 20 and 30 air movers in the building. We would bill $500 a day just for air movement and a job usually took 3 days of air movement to dry out the building. 

I typically arrived between 5:15 and 5:30 every morning for work. I would be the one to get the ‘I’m sick’ phone call from the guys that worked in the field. Well, on day two of production with the air movers, I got 3 phone calls of guys calling in sick. It created a scheduling nightmare for the work that day. After spending the morning putting out the typical fires, I went to that job site to inspect progress. Every one of those air movers were operating (which is normal) and based on the test results, you could tell the building was beginning to dry out. It was great production in one day. 

What I learned was that the air mover didn’t call in sick, it didn’t back talk me, it never got upset about how much it was paid and it just kept on humming. It was making us money and I didn’t have to deal with personnel issues. Boy, if only all production could be like this. Turn it on and make money.

That’s the thought process you need to have in production, you will know you are there when you can turn it on and it makes money! Act on Knowledge.

Value Investing

Do you want to learn how to get returns like this?

Then learn about Value Investing. Value investing in the simplest of terms means to buy low and sell high. Value investing is defined as a systematic process of buying high quality stock at an undervalued market price quantified by intrinsic value and justified via financial analysis; then selling the stock in a timely manner upon market price recovery.

There are four key principles used with value investing. Each is required. They are:

  1. Risk Reduction – Buy only high quality stocks;
  2. Intrinsic Value – The underlying assets and operations are of good quality and performance;
  3. Financial Analysis – Use core financial information, business ratios and key performance indicators to create a high level of confidence that recovery is just a matter of time;
  4. Patience – Allow time to work for the investor.

If you are interested in learning more, go to the Membership Program page under Value Investing section in the header above. 

Join the value investing club and learn about value investing and how you can easily acquire similar results with your investment fund. Upon joining, you’ll receive the book Value Investing with Business Ratios, a reference guide used with all the decision models you build. Each member goes through three distinct phases:

  1. Education – Introduction to value investing along with terminology used are explained. Key principles of value investing are covered via a series of lessons and tutorials.
  2. Development – Members are taught how pools of investments are developed by first learning about financial metrics and how to read financial statements. The member then uses existing models to grasp the core understanding of developing buy/sell triggers for high quality stocks.
  3. Sophistication – Most members reach this phase of understanding after about six months. Many members create their own pools of investments and share with others their knowledge. Members are introduced to more sophisticated types of investments and how to use them to reduce risk and improve, via leverage, overall returns for their value investment pools.

Each week, you receive an e-mail with a full update on the pools. Follow along as the Investment Fund grows. Start investing with confidence from what you learn. Create your own fund and over time, accumulate wealth. Joining entitles you to the following:

  • Lessons about value investing and the principles involved;
  • Free webinars from the author following up the lessons;
  • Charts, graphs, tutorials, templates and resources to use when you create your own pool;
  • Access to existing pools and their respective data models along with buy/sell triggers;
  • Follow along with the investment fund and its weekly updates;
  • White papers addressing financial principles and proper interpretation methods; AND
  • Some simple good advice.

Value Investment Club

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