Back in 1999, I bought a Briggs & Riley wheeled carry-on bag for a little less than $200. I’d liked the design (it came with a built-in garment holder inside) and could tell it was built better and sturdier than several of the other brands that the luggage store carried. What really got my interest, though, was their warranty, which stated that they would repair, free of charge, any damage to the bag caused by anything, be it the airlines or your dog for the lifetime of the bag. Thinking it was some nice marketing, but never expecting to use it, I bought the bag.

Since it’s been my only carry-on bag, I’ve used it to go everywhere in the last 7 years: all over the US on domestic flights, Taiwan twice, all over Europe from the UK to Spain to the Czech Republic, Peru, not to mention innumerable cross-country road trips. You name it, and it’s been there. Unfortunately, it also managed to get worn and torn throughout this time by cabbies and baggage handlers. Last week, I decided to make the 40 min drive to Moss Bay, CA to drop off my bag at their repair center.

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I went over to a small get-together at a friend’s house on Saturday, and a few of the guests brought a bottle of wine as a gift for the hostess. Since neither she nor her husband drink very much, the practical thought occurred to both of us that they could bring the wine as gifts for another party in the future. Yet the idea didn’t sit entirely well with either of us. So-called regifting was a hot topic last Christmas and seen as a way to fight off consumerism.

I’m all for being frugal but still somewhat constrained by my culture, I guess. In my family, especially in Asia, gift-giving is not as casual as it is here in the States. Gift giving there has a lot more significance, and people understand the amount of thought that was probably put into the present: its price, its quality, its brand, the country where it was made, even sometimes its accessibility (e.g. how difficult it would be to find). Thriftiness and frugality are important elsewhere in life, but just not when it comes to gift giving or hosting. And when someone who’s given you a gift visits your house, the most respectful thing to do is to have the gift prominently displayed somewhere that they can see it. I can imagine that if a person were to find out that his or her gift had been passed on to someone else, it would be both an insult and a reason for relationships between parties to break. Similarly, I don’t to discount stores to buy anything that I’d be giving as a gift to someone else. In Asian society, gift-giving also comes with a set structure and hierarchy, and gifts (and their value) are chosen depending on the type of visit, event, celebration, and proximity of and age of receiver, among lots of other factors. The red envelopes (of money) that you give to the bride and groom with whom you are acquainted will vary significantly from the amount you give to a close friend.

I remember learning Japanese in college and just about giving up right when we started learning the verbs for receiving and giving gifts. In Japanese, there are different verbs and different conjugations depending on whether the giver was below or above you, in your in-group or out-group, and a whole other set for receiving gifts. I don’t think anyone who’d brought the wine on Saturday would have cared if my friends gave them to someone else to use, but it’s interesting how ingrained cultural training can be.

Investorgeeks is hosting this week’s Carnival of Investing, and it marks my first submission to this ongoing event. For those of you unfamiliar with the concept of “carnivals”, don’t worry, I wasn’t sure what they were either up until last week. The short explanation is that carnivals are basically a regular listing of links to posts submitted by bloggers that highlight their work. Usually those who have already submitted a post take turns to “host” the carnival each time. In the area of personal finance, there are three carnivals that I know of: Carnival of Investing, Carnival of Personal Finance, and Festival of Frugality.

The post I most enjoyed this week on Carnival of Investing is called “Jewlers Dangling” over at Mover Mike’s. My husband and I ordered our wedding rings from a jeweler in Spain, where we married, in December 2003, when platinum was around 650 Euros (~US$780) per troy oz. The jeweler was the owner of his own small shop and had given us that figure as his high-end estimate, which he honored a few weeks later when we picked up the rings. He was just astounded at how platinum had taken off in price. In his case, he was simply charging his customers whatever the current spot price of the metal was at the time of their order.

In case you’re curious, as of last Friday, platinum was hovering around $1300 per troy oz!

This is a lengthy post that will go through each step of calculating the ratios used in value investing to find a defensive investment, as opposed to an “enterprising” one, which I’ll save for a later date. For more information, I suggest reading The Intelligent Investor, which is the best book on investing, value or otherwise, that I can recommend. The edition shown here comes with commentary from Jason Zweig that helps show how Graham’s advice applies even to recent times.

The ratios here are taken from those listed in the book in chapter 14, and so that readers can follow along, I’ve selected Gerdau AmeriSteel Corp (GNA) as the example we’ll be using. If you’re not familiar with the company, you can read about it on Yahoo! Financials’ profile page. The only complication this adds is that due to its foreign headquarters, GNA files 40-Fs instead of 10-Ks (for our purposes, they’re the same thing, just called different things due to SEC’s specific regulations governing foreign companies and subsidiaries). I didn’t intentionally choose a foreign-based company, but it was about the only example I could find that met most of Graham’s criteria, which might say something as well about the market right now!

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Seen in a letter from a reader in this week’s Economist, who wrote:

SIR – I would like to reassure readers that all is not doom and gloom on the oil front (“Nostalgia for calmer days”, April 22nd). I recently took my car to a petrol station and was pleasantly surprised to find that the price of premium-grade petrol had been reduced from 90 halala to 60 halala per litre. For those unfamiliar with Saudi Arabia’s currency, this works out at 60 cents per American gallon.

John Christopher Williams
Dhahran, Saudi Arabia