Glossary

Key terms for net-net investing.

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  At-The-Market (ATM) Facility

  ATMs let issuers sell small share blocks over time; watch filings to spot creeping dilution.
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  Borrow Fee / Short Rate

  High fees can force covering and fuel squeezes; low fees mean shorts can sit longer.
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  Catalyst

  Examples: buybacks, tenders, asset sales, liquidations, relistings, or credible turnarounds.
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  Float vs. Outstanding Shares

  Float excludes insider/locked-up holdings; %float metrics amplify moves in tiny floats.
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  Floorless Convertible

  Lacks a minimum conversion price, so conversions balloon share count when prices drop.
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  Going-Concern Warning

  Signals liquidity strain or refinancing risk; demands wider margins of safety and faster thesis clocks.
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  Net-Net Portfolio Rule

  A 20–30 stock basket, rebalanced periodically, reduces single-name risk in deep value microcaps.
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  Net-Net Working Capital (NNWC)

  NNWC = cash + 0.75×receivables + 0.5×inventory – total liabilities; a harsher cousin of NCAV for deeper safety margins.
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  Reverse Split

  Often used to meet listing rules or reset option pricing; can precede further dilution.
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  Tender Offer

  Can shrink float, return cash, and catalyze rerates—if priced below intrinsic value.
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  Circle of Competence

  Operate where you understand the drivers, risks, and values; pass on the rest.
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  Defensive Investor

  Focus on quality companies, moderate prices, and diversification with minimal trading.
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  Enterprising Investor

  Research-intensive approach focusing on bargains, special situations, and small caps with margins of safety.
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  Market Analysis

  Predicting price paths or averages rather than comparing price to intrinsic value.
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  Mr. Market

  Treat market quotes as offers to accept or ignore, not commands to act.
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  Security Analysis

  Graham's discipline of appraising value versus price based on financial statements and conservative assumptions.
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  Special Situation

  Graham viewed workouts as businesslike underwritings of terms, timing, and downside.
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  Cost of Capital

  Blends equity and debt costs into a hurdle rate for projects and valuations.
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  Depreciation vs. Amortization

  Both are non-cash expenses, but depreciation applies to tangible assets and amortization to intangibles or deferred items.
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  Earning Power

  A steady-state cash flow figure that anchors valuation beyond the balance sheet.
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  Margin of Safety

  A buffer that protects against mistakes, dilution, or weaker assets than expected.
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  Net Current Asset Value (NCAV) Per Share

  NCAV per share is the core net-net yardstick for valuing balance-sheet bargains.
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  Net Current Asset Value (NCAV)

  NCAV is current assets minus total liabilities, the core net-net metric.
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  Net Tangible Asset Value (NTAV)

  NTAV strips out intangibles to show hard-asset backing after liabilities.
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  Non-Cash Charges

  Non-cash charges lower earnings without immediate cash impact; add them back when assessing cash flow but consider their economic meaning.