tag:blogger.com,1999:blog-2949218657849719987.post4103367462396671341..comments2024-02-10T10:35:20.557+00:00Comments on My contrarian adventure: Contrarian rules part IIFredrik von Oberhausenhttp://www.blogger.com/profile/10924238593055161520noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-2949218657849719987.post-4761509174033626702015-09-06T10:59:37.020+01:002015-09-06T10:59:37.020+01:00Hi Garry,
Thanks for your feedback!
I have spent...Hi Garry,<br /><br />Thanks for your feedback!<br /><br />I have spent the weekend digging into the blog of Lundaluppen (you can find him in the blog roll but it is all in Swedish). He was one of the most successful value invest bloggers in Sweden until he stopped to write a couple of months ago. I needed that to clear my thoughts a little.<br /><br />I fully agree that financials and energy are difficult because as an amateur investor one will probably never be able to fully understand the companies and often I even doubt if the managers fully do... The thing is, if we take banks as an example, I can not get it into my head that German banks should trade at P/B of 0.5 (which they are at today) while many other banks are trading above a P/B of 1.5 in Europe. I simply cannot understand that. So even though I know that I do not understand the business to me that P/B difference makes no sense and for that reason I also cannot sell my banks.<br /><br />I fully agree that I swing the bat far too often in terms of buying new companies. I do however not like to have cash lying around. My thoughts were always that a cash pile will be built up when sales are made and once the dividend payments reach such a level that it is well above my monthly "savings" but until that point is reached I want to keep pushing in every € that I can when I get it.<br /><br />Oh, I should probably also say that I think that writing the blog is negative for accepting mistakes and selling stocks. It simply makes it one step harder to do so because I need to report it and write about it. So one have to rub salt into the wounds additionally due to the blog.<br /><br />I will most likely start to phase things out and the "new strikes" will be more wonderful companies and then I will still increase positions in the companies I have where the valuation makes no sense but I must stop to buy companies such as Fugro, Eniro, Gerry Weber, Asian Bamboo and Kernel.Fredrik von Oberhausenhttps://www.blogger.com/profile/10924238593055161520noreply@blogger.comtag:blogger.com,1999:blog-2949218657849719987.post-33627564509011981892015-09-04T22:21:22.747+01:002015-09-04T22:21:22.747+01:00Hi Frederik
I think Falk is right: be more select...Hi Frederik<br /><br />I think Falk is right: be more selective in your picks, the financial and energy sector is too difficult to predict and to invest in, too many parameters. I would add more Buffett-type investments to your portfolio. (pricing power, deep-moat,easy to understand, wonderfull companies at good price...) And cut the rest while your loses are controllable.<br /><br />Every month you buy a new stock, but to me it seems impossible to have every month a great new idea. Be patient until a real opportunity comes around, don't just buy stock to buy something. <br /><br />Studying Buffett may help (books, quotes,...)<br /><br />"An investor should act as though he had a lifetime decision card with just twenty punches on it."<br /><br />"It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price."<br /><br />"The stock market is a no-called-strike game. You don't have to swing at everything — you can wait for your pitch. The problem when you're a money manager is that your fans keep yelling, 'Swing, you bum!'"<br /><br />I think the current volatility results in opportunities to pick up some wonderfull companies at good prices. <br /><br />Goodluck<br />Garryhttps://www.blogger.com/profile/08261157807992272897noreply@blogger.comtag:blogger.com,1999:blog-2949218657849719987.post-86065290841686282982015-09-04T15:26:36.068+01:002015-09-04T15:26:36.068+01:00Thank you for your feedback Falk!
Well... yes, it...Thank you for your feedback Falk!<br /><br />Well... yes, it is hard to have a quick edge on something but I still consider myself to have two edges: <br />1. I am not scared of -50% (which I probably should be) and <br />2. I do not have any real time/performance pressure (compared to active managers) that<br />on the other hand can lead me into beautiful value traps such as... Utility?<br /><br />Hear, Hear on the managers! I find them to be more and more crucial and I am looking into that even more specifically via my Tessenderlo and Avtovaz investments. Less good though is that I am fairly annoyed by several of the managers in my current holdings... which leads us to your advice.<br /><br />I would have to kick out so many companies. So many. It makes me sad. Really sad. I do not think I am able to do that today. I do not think I am strong enough for that. Not yet. I need to think.<br /><br />Thanks Falk.Fredrik von Oberhausenhttps://www.blogger.com/profile/10924238593055161520noreply@blogger.comtag:blogger.com,1999:blog-2949218657849719987.post-9378401929120446052015-09-04T10:53:05.443+01:002015-09-04T10:53:05.443+01:00Hi Fredrik,
thank your for your honesty to us and...Hi Fredrik,<br /><br />thank your for your honesty to us and to yourself. This alone together with the possibility to learn from your mistakes should lead to better investment results in the long term.<br /><br />When I started investing I made the exact same mistakes. I invested in quantitive cheap companies, crossed my fingers and waited for returns that never came. After loosing only small money (lucky me) I realized that I also had to analyze the quality of the company. To quote Buffet: "Price is what you pay, value is what you get"<br /><br />I also had to realize that my circle of competence was not as wide as I thought it was and that most of the companies were cheap for a good reason. I didn't have any edge at all. You already linked valueandopportunity and his latest article, so you know what I mean. <br /><br />Last but not least I realized that temporary problems that lead to depressed prices will normally only be solved by an trustworthy management with a good track record and with fair incentives. There are a lot of bad managers out there that only think about theirselves first and destroy the companies they are working for.<br /><br />So if you ask for my advice: reanalyze your current portfolio and focus a little bit more on your circle of competence, the quality of the company business models and their current management. Then rank them, based on the quality and the current over-/undervaluation. And then sell the low quality + overvalued companies first. Or only the low quality stocks. Or only the ones outside your circle of competence. Just my five cents...<br /><br />Regards <br />FalkFalknoreply@blogger.com