My key criteria is independent of the market. WHat would I pay for this growth? What would I pay for this dilution?
I agree sometimes it is hard but if you stick to t his you should do better. Guessing what person X things of growth or dilution is kind of dumb since your playing psychology over math.
If you think the valuation is stretched then why buy the stock?
Honestly it seems interesting but not interesting enough for me to research it. Not even really interesting enough to watch it . A 35 PE for a standard old fashioned business model
it is kind of like Coinstar ya you see the growth but you can clearly see the limits on its business model right. Its not like it can go 35% a year indefinitely. There is a reason Conn's doesn't exist in downtown NYC. Its a poor store that makes its money selling expensive products to poor people. America's car mart does that too.
It is good but how good to buy at a 35 PE?
If we knew a company could grow at 35% a year for 20 years at their current net income they would be worth $7.5 billion (assuming no dividends) so the valuation is pretty stretched here.
Though this company suspiciously issues equity every year a sign.
Explain to me why a company with not much cap-ex needs to issue equity in fact so much you have been 40% diluted since 4 years ago.
Not saying that makes it a fraud just something that is a red flag.
Not only that it is just unattractive and lowers the valuation substantially when you consider they pay no dividends or buybacks and they dilute you.
It is too bad I didn't see this thing at a cheaper price but $75 looks a little pricey. I don't like the business model of go after the poorest people for an 18% loan. It seems to have less growth once you hit a certain point. But we will see.
hmmm just to CLARIFY I am not recommencing GRE. I did recommend Yellow though.
All I said was GRE was on my watch list and t was next in line for me to do some heavy research on.
Yes obviously GRE breaks all my simple principles of never invest in China
but that is why I have PRINCIPLES and not rules. Never Investing in China is smart but sometimes you need to go beyond the simple rules. Ya I could just brush it off and go its China. And I usually do this but at 50% growth and at 2 times earnings it is really worth my time to do some analysis.
CONN's is interesting! lol It seems like the multiple fully bakes in that growth / risk factor already. I invested in a similar company in 2010 AMerica's Car Mart where they got poorer customers to buy more by allowing financing to them. So this it the same thing. I feel growth is more limited since you have to pick your spots carefully.
ya Greenstar agriculture a company making 40 cents a share trading at 80 cents. I normally avoid companies liek this like the plague CVE:GRE but I mean the fundamentals are too good and I would be an awful investor to not check into it despite the red flags.
If I hit a 10 bagger on this I can easily outperform the market for the next while.
A company with growth of 30-40%, a dividend with a PE of 2. Even if it is a fraud at these prices you can at least get paid back your principal if its not called a fraud for a while.
I am obviously kidding around throwing around the fraud word. But in reality that is the only thing that I need to check out in determining the value of this stock. I live close to their head offices so I plan to visit them. I also plan to contact the IR once I know a little more.
$13M market caps are dumb but not so dumb to write them off completely.
I haven't done much research yet but I should have a lot of time coming up/.
lol ya I will check out BCEI again then I see it has gone down from the last time we spoke (it was at $48). This GRE though is getting me excited though small its a possible 10 bagger if not a fraud. SO I will be focusing on it for the next bit. but ya keep your ideas coming.
Also u sold Tex at a loss how? Or u made a new purchase? TEX has done really well here it seems overbought.
what about Yellow I think I told everyone here that Gem. Unfortunately I also sold at $13 my average cost was like $7 now its at $20.
I have the confidence that I can determine a fraud or not as an outside investor. You just need to look for things. If they add up or not. I am leaning on GRE being a fraud but I will potentially ask their Investor relations or visit their office.
I agree it is a stock that will need a few extra steps. However in this up market where most stocks are overvalued, it is worth it to get a bit more creative.
Also I screwed up my gem I posted last year of Yellow Media now up like 200%. I think I made 50% on it but the position i had was like 3% of my portfolio.
I originally bought convertible bonds at 2 cents on the dollar but I sold them because the company forced me to pay the 3.5% interest. So I was paying upfront huge interest payments. And I was worried because the company said they wouldn't pay back the interest/.
It was dumb since my bank told me I wouldn't have to pay the interest because of the proposed cancel by Yellow. These huge interest charges made Yellow like 20% of my portfolio an amount I was not comfortable with so I had to sell all the bonds.
Anyways suffice it to say the bonds are up 8 to 9 times since then.
So these are the little creative gems that can make you a lot of money. I ended up making a little taste but obviously I was a moron. It is still always worth it to look into the GRE and the Yellows.
I think every company is potentially worth it though if you put in the time to research it. I think it is definitely worth making 6-7 times your money.
I agree I will probably not end up investing in it but I will do some solid research on it. I have already completed some preliminary analysis.
no problem. I looked into the auto market once and it just didn't seem attractive enough for me. So I have not entered it. Perhaps something has changed.
Our thoughts are pretty congruent. I just don't think Ford is the best bet in terms of reward to risk out there.
also congrats on your returns YTD. So your average purchase price was 34.5 in TEX?
Also a key in investing is isn't getting cocky. I have made that mistake before early on. Though I would admit I have been at my best this year.
It is hard to really measure who is the greatest investor by a single year. I believe Buffett is probably up like 4% this year. I have averaged 35% a year since 2008 so this year is on par. More speculative have really surged in 2013 and I made a couple of mistakes limiting my return.
Last year I made 100%
I made some screwups in 2013 which if I had not made I would be up like 60%. Yellow pages comes to mind which is up 300% but I didn't benefit nearly enough from it.
I lost faith in TEX delivering. It seems like your wishing and a hoping on $10. The dividend means next to nothing really. The facts is revenue has gone down year over year in every quarter. Ford also is being helped by a huge resurgence in auto demand that will probably soon taper off.
So it seems optimistic.
Anyways I will possibly update you guys on my ideas going forward.
I told you guys ford was poor. The TEX dividend and share repurchase is kind of small. I am sure they are not buying back $200M this year and the 5 cents whatever that is laughable.
It really doesn't tell you about the state of the company. However it does tell you management and shareholders have goal congruence! Though we already knew that all along. TEX has some of the most investor friendly management around.
Right now I was buying Deere, its done Okay up 6% since I bought in Sept. I am up 36% now on the year.
I am looking into TGH, TAL some container shipping stocks.
GRE (greenstar agriculture( on the Canadian venture is interesting but it may be a fraud. Trading a 2 times earnings lol with 40% growth and a dividend. Lucky for me I live next to their office so I will investigate it. So stay tuned.
I don't think AGCO is as good as DE. For a couple of reasons historically AGCO organic growth has been below DE. Even at the current time DE has grown earnings faster.
Also AGCO has reinvested 1.68 times its capex while Deere has done 1.2 X despite this huge influx of capital they have managed further growth.
On top of this, AGCO pays a 5% payout while Deere does 65-70%. So Deere is growing and spinning off excess cash. AKA Deere is far more attractive.
Obviously going forward I assume AGCO and DE will grow around their historical averages. If that is way off than that would change the analysis. But on almost all metrics DE is way better
Even in an off year i beat the market. Better than Buffett who has probably returned like 6 % on his stock picks this year
well I guess your glad then you're not beating the market by more than 2 times since i started my partnership.
lol this is just an off year for me and its mostly related to the ridiculous surge in the S&P of awful companies like Netflix. I can barely keep up. I don't expect stocks like Netflix to go up 400% next year so I should easily destroy the S&P going forward again
lol ya I mean we should all be happy. We all have overvalued positions because the market has gone up so much. And to find such an easy stock and such a great company trading at absurd prices is a wet dream
lol ya I said 30% sucks. Read u moron. I said I have done really poorly this year. I am barely beating the market
lol I am a godly investor. Though I will admit I have been pretty average in 2013. Up 30% and the market is up 28% (including dividends) Compared to last year I was up 42% compared to 16%. This is for the fund I manage.