# Skaffold - Who's using it and what do you think?



## The Trooper

Skaffold is the web-based subscription application recently launched in Australia by Roger Montgomery and his team. It provides quality and performance ratings based on the business qualities, management and how the cash flow and financials stack up. It also provides forward intrinsic valuations of stocks as assessed by Roger's team. Intrinsic value in the Roger Montgomery context is broadly based around multipliers of equity per share discounted at high rates of return and considers forward cash trends providing the company continues to act in the manner it has acted or in which it has forecast to act.

I purchased a 13 month subscription through a self-managed superannuation fund on the launch date and have been playing around with it since then. While it has some web-based design aspects that take some getting used to or which i haven't learnt to master yet (i keep closing the browser without logging out and the system seems to have a delay built in before you can log back in when you close without logging out and i haven't worked out how to bring my portfolios in to full screen view) it is a remarkably simple tool for narrowing the field of stocks to consider.

The reasoning behind the quality ratings and valuations makes sense to me and i can weed out the companies i'm not interested in. Skaffold still makes you have to think though such as considering companies that are relativley new on the stock exchange and have good credentials, are trading at below intrinsic value but do not have a defineable track record.

In short my first impression of the program is positive, my goal is to create enough wealth in the superannuation fund to cover the $1330.00 annual subscription fee as well as providing greater return on my cash employed in the stock market than would be received from having it in the bank.

I'll be testing the waters with Skaffold over the next 6-12 months and have created a small portfolio of a few of my high quality favourites within the fund. If this works well the superannuation fund has paid for the program there is no reason why personal funds could not be deployed for the same.

Any other Skaffold first thoughts or user experiences?


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## Gringotts Bank

I wonder if they have subscribed to Lincoln Stock Doctor and repackaged the data?  Surely not.

Quick and easy way to make money.  One subscriber will pay for your Lincoln subs, then the rest is cream.  On-sell!

That wouldn't happen would it?


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## Tanaka

Gringotts Bank said:


> I wonder if they have subscribed to Lincoln Stock Doctor and repackaged the data?  Surely not.
> 
> Quick and easy way to make money.  One subscriber will pay for your Lincoln subs, then the rest is cream.  On-sell!
> 
> That wouldn't happen would it?




I don't believe so GB. The system is based on Roger Montgomery's value system. The formula is in his book 'Value Able'. I have not subscribed to Skaffold, but I have read the book. Skaffold looks like a 'cheat sheet' for anyone with not enough time to apply Roger's formula on 100s of stocks. As far as I can see you are paying $1330 for something that would take you 100s of hours to do by yourself anyway. I am thinking about subscribing... why? because if my time is worth $100 an hour I'd say it'd take me 100 hours to do the work myself, so then $1330 is darn cheap.


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## McLovin

If the system is so good, then why bother hunting out the undervalued companies? Wouldn't it be easier if they created an automated trading system that will buy A1/A2 at x% discount to intrinsic value?


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## The Trooper

McLovin said:


> If the system is so good, then why bother hunting out the undervalued companies? Wouldn't it be easier if they created an automated trading system that will buy A1/A2 at x% discount to intrinsic value?




You're entitled to, but it sounds like you don't want to think. The system is good but it is an emerging IT platform. In practise the narrow field of stocks left to consider based on quality and rating means you don't have to think hard about which choices to make.

However, the fundamental issue is that companies change and people invest for different reasons. Skaffold simplifies the target range and lets you make your own choice. I'm comfortable with it.


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## McLovin

The Trooper said:


> You're entitled to, but it sounds like you don't want to think. The system is good but it is an emerging IT platform. In practise the narrow field of stocks left to consider based on quality and rating means you don't have to think hard about which choices to make.




What thinking is left to do when a black box can apparently tell you the quality, performance and intrinsic valuation of a company? How do you know the system is good, if you can't actually see what it's doing? 



The Trooper said:


> However, the fundamental issue is that companies change and people invest for different reasons. Skaffold simplifies the target range and lets you make your own choice. I'm comfortable with it.




Which again goes back to my point: If you're happy letting Skaffold do all those things for you then it's not a giant leap to just let it trade for you. The way I see it black boxes like these are sort of like sitting in the Captain's seat with your hands on the yoke but the aeroplane on autopilot.

RM has made several blog posts showing how his A1/A2's have outperformed the market if you believe that that will hold true in the future then why not just let the system do all the trading for you?


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## The Trooper

Your comment then is really a matter of choice. You are right, a choice for a trading portfolio advice (or automated system) or a choice to be given the facts in a narrow field to construct your own.


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## McLovin

The Trooper said:


> Your comment then is really a matter of choice. You are right, a choice for a trading portfolio advice (or automated system) or a *choice to be given the facts* in a narrow field to construct your own.




You're almost correct, except for the bit I highlighted. You're being given an opinion not facts. My own opinion is that if you are not confident enough doing the quantitative aspect of investing you probably shouldn't be attempting the qualitative part which is, again IMO, much more difficult.


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## craft

The Trooper said:


> Your comment then is really a matter of choice. You are right, a choice for a trading portfolio advice (or automated system) or a choice to be given the facts in a narrow field to construct your own.




If your choice is to let somebody else make the investment decision for you why not invest in an ETF? For $1330 you could cover the management fee on an investment of over $850,000 in the Vanguard ASX 300 ETF. 

What makes you think Skaffold will earn its keep when the relevant information for assessing its potential is kept secret? 

When Montogomery pulled this sham last time it was via Clime Asset Management and the software was called Stock-Val.

This is CAM’s record under his control.




Of course all his marketing will be telling you that it will work out this time – But will it. How do you know you won’t just be throwing him $1330 to access information that will lead you into underperforming the market as he did with CAM?


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## So_Cynical

The Trooper said:


> my goal is to create enough wealth in the superannuation fund to cover the $1330.00 annual subscription fee as well as providing greater return on my cash employed in the stock market than would be received from having it in the bank.




Dude seriously...seriously!



Tanaka said:


> As far as I can see you are paying $1330 for something that would take you 100s of hours to do by yourself anyway.




No...looks like your paying $1330 for a delusion, a way to stay in your comfort zone, and make Rodger and his team super rich.

---

My necks getting sore from all the side to side head shaking in doing reading this thread.


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## Tanaka

So_Cynical said:


> No...looks like your paying $1330 for a delusion, a way to stay in your comfort zone, and make Rodger and his team super rich.




I agree with you cynical, it will be for many a way to stay in their comfort zones. If I were to join I would be using Roger's valuations as a guide for my own research.  My key point is that the hours to do it yourself are long. I wouldn't be paying for a delusion, I would be paying for the list of valuations. It would be delusional only if I were to blindly buy Roger's A1s expecting good returns without having done further due diligence. I agree with Roger's valuing model, if you have found a better one, I'm all ears


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## So_Cynical

Tanaka said:


> I agree with you cynical, it will be for many a way to stay in their comfort zones. If I were to join I would be using Roger's valuations as a guide for my own research.  My key point is that the hours to do it yourself are long. I wouldn't be paying for a delusion, I would be paying for the list of valuations. It would be delusional only if I were to blindly buy Roger's A1s expecting good returns without having done further due diligence. I agree with Roger's valuing model, if you have found a better one, I'm all ears




In essence your paying for stock tips in conservative stocks, no entry or exit strategy, no trade management, no position sizing, no broad strategy at all....seems a lot to pay for reasonably obvious tips.

Obvious because A1 company's (high ROE) seem to share some quality's.


 very low or no debt
 No hard assets (don't own anything)
 Not capital intense (service providers)
 History of paying dividends 

The above list narrows the all Ords down to less than 50 company's, and that cost you nothing.


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## The Trooper

It seems there are a lot of Roger Montgomery cynics in the mix. I personally have no problem with the guy or his track record. The previous graph shows the effect of the GFC and the effect of the original credit corp incident which was related to fund management for a publicly listed company. Credit corp at the time were poorly managed (this is the qualitative aspect that is mentioned as being difficult to ascertain, which i agree with). As an aside Credit Corp now i think are a good investment and i think previously the management may have fooled a lot of people which i can't find fault in the people who were fooled.

If i was paying $1330 personally i would think twice about it but it is not, it is through a superannuation fund which i use to learn about the stock market, potentially make good gains, but don't worry if i make losses as, being a self-managed superfund will be taxed at a rate of 50% once i ultimately leave Australia for good (the 50% kicks in after two years absence at which time the fund becomes non-complying). Alternately i could transfer the fund to a managed fund when i leave, have no control and risk losing it all.

So for me personally, i don't mind if Roger becomes wealthy and i am not worried about the $1330 that is not personal cash flow. What i am interested in is to trial this tool, Skaffold, and see if the companies that present as good opportunities do come to fruition. The program does provide intrinsic values and forward intrinsic values but not the calculations behind them however, crosschecking with a spreadsheet i derived from the book i get close and can usually get some idea of the adjustments made for the companies i am interested in. If i was sellling IP i would want to keep the recipe secret as far as possible too and have no problem with this. Roger makes the basis for the valuation techniques very clear in his book.

Truth be told, managing mutliple operational businesses a mortgage and a few kids i want to be told which stocks are better for value investing without having to do the work. One day when i have more free time i understand the process and won't need to.

I'd like to hear from some people who have actually used Skaffold and are not discrediting the program or Roger without having trialled it.


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## notabclearning

could anybody lend me a username and password to let me try it out.


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## McLovin

The Trooper said:


> It seems there are a lot of Roger Montgomery cynics in the mix. I personally have no problem with the guy or his track record. The previous graph shows the effect of the GFC and the effect of the original credit corp incident which was related to fund management for a publicly listed company.




Did you actually look at the date on the chart? It starts in 2004 well before the GFC or the CCP debacle. It's a pretty dismal record and he was underperforming well before either the GFC or CCP.



The Trooper said:


> As an aside Credit Corp now i think are a good investment and i think previously the management may have fooled a lot of people which i can't find fault in the people who were fooled.




You can't find fault in a professional fund manager who had several meetings with the company's management being taken for a ride on the largest investment he made? Clearly you set the bar much lower than I do. I do agree with you on CCP being a good investment now and I hold a fairly large parcel.

At the end of the day it's up to you, but if you're buying a black box off someone with a mediocre record as an investor how can you expect to do better than mediocre.


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## The Trooper

McLovin said:


> You can't find fault in a professional fund manager who had several meetings with the company's management being taken for a ride on the largest investment he made? Clearly you set the bar much lower than I do.




I'm just saying i understand it. I have met two small business owners (turnover $1.5-3M pa) in the past three weeks who, one lost his business and had to declare bankrupcy due to a business partner he worked day to day with ripping off the business and another who lost $70K in diverted sales by a person he worked closely with and trusted.

In public companies where acting fraudulently comes with less personal risk and loss and more potential for personal gain than a private company I would contend that there are some very good scheisters out there.


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## The Trooper

notabclearning said:


> could anybody lend me a username and password to let me try it out.




I don't think it is ethical to hand out account details for commercial IP however as a once off note a stock you are interested in and i will try and post the screen dump.


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## McCoy Pauley

Good luck to you Trooper.  I hope it works out for you.

But I find it ironic in the extreme that, after preaching about the value of independent thought and research in his Value.Able book, Roger now offers to his disciples an opportunity to suspend disbelief and critical thinking and rely upon a black box.

Despite the numerous emails his team wrote to me over the past couple of months, I will not be "investing" in Skaffold as I find the intrinsic value of the service to be lower than what he's charging.


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## Billyb

McLovin said:


> At the end of the day it's up to you, but if you're buying a black box off someone with a mediocre record as an investor how can you expect to do better than mediocre.




I agree. Why pay $1300 for a strategy which has a mediocre record.

Personally (if I was looking for a subscription) I would prefer to spend my money for a strategy which does have a good record (which subscribers can easily see and judge for themselves) like Nick Radge's Growth Portfolio which costs one third of what Skaffold does.


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## The Trooper

The following is a screenshot of the three buys i have made since subscribing to Skaffold. I will likely sell these in the near future as forecasts of international financial gloom and doom seem to be rife at the moment. Regardless of the real impact of these forecasts i think it will have a flow on effect to Australia so may have the opportunity to buy these shares back at a discounted rate;




This is not proof of a track record but is not bad for a less than 1 month old portfolio and i understand there are people who would take the time to research and invest in these same stocks without using a program to help them. I don't have the free time to spare.


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## So_Cynical

The Trooper said:


> The following is a screenshot of the three buys i have made since subscribing to Skaffold. I will likely sell these in the near future as forecasts of international financial gloom and doom seem to be rife at the moment. Regardless of the real impact of these forecasts i think it will have a flow on effect to Australia so may have the opportunity to buy these shares back at a discounted rate;
> 
> View attachment 45472
> 
> 
> This is not proof of a track record but is not bad for a less than 1 month old portfolio and i understand there are people who would take the time to research and invest in these same stocks without using a program to help them. I don't have the free time to spare.




Trooper...post in real time or it didn't happen.

Your last post in the JBH thread was 15th-July-2011 before the big dip....if your gona spruk something, credibility is an issue...interesting that you posted in the JBH thread that you were buying at around the $15 level, well before Skaffold.


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## MichaelSy

McLovin said:


> if you're buying a black box off someone with a mediocre record as an investor how can you expect to do better than mediocre.




Wait a second. Are you trying to say RM was a mediocre fund manager?

If so, do you have proof to back up the claim (and don't just link to one poor stock performance)?

Michael


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## skc

MichaelSy said:


> Wait a second. Are you trying to say RM was a mediocre fund manager?
> 
> If so, do you have proof to back up the claim (and don't just link to one poor stock performance)?
> 
> Michael




Scroll up to post #9 on this thread...


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## craft

MichaelSy said:


> Wait a second. Are you trying to say RM was a mediocre fund manager?
> 
> If so, do you have proof to back up the claim (and don't just link to one poor stock performance)?
> 
> Michael




The history is all there in CAM for you to investigate yourself. Most of his followers already have their mind made up and don't want to be confused by the facts.

What about you? Do you want something to believe in or do you want the facts? Research will give you the facts if you want them.

And It’s not just the historical record that raises concerns. 

Despite all the value investing rhetoric he is much more speculating on earnings momentum then value investing.

I mean really how can an intrinsic values change daily? An intrinsic value should take into account everything that is likely to occur in the future – you only change it when you are wrong about an assumption that you have made.

My point of view is that the chart will provide much more timely information then analysing the accounts if you want to play earnings momentum.

Being late at the turns will kill an analysis based earnings momentum approach and as we are most likely in a big sideways market you can expect lots of turns. 

Look at his biggest calls for the last year. MCE which was his number 1 pick for 2011 and he ramped endlessly with valuations up to $11 odd dollars and QR National where he was the media’s go to man to mock the QR float as woefully overvalued.  The market a year later says he was dead wrong on both – but the most disturbing thing is his integrity around MCE when after the price collapsed he claimed never being heavily invested.

Montgomery might like to promote himself the next Buffett, but the record, the strategy,  the integrity, the secrecy,   maybe he’s the next .....


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## Judd

craft said:


> The history is all there in CAM for you to investigate yourself. Most of his followers already have their mind made up and don't want to be confused by the facts.
> 
> What about you? Do you want something to believe in or do you want the facts? Research will give you the facts if you want them.
> 
> And It’s not just the historical record that raises concerns.
> 
> Despite all the value investing rhetoric he is much more speculating on earnings momentum then value investing.
> 
> I mean really how can an intrinsic values change daily? An intrinsic value should take into account everything that is likely to occur in the future – you only change it when you are wrong about an assumption that you have made.
> 
> My point of view is that the chart will provide much more timely information then analysing the accounts if you want to play earnings momentum.
> 
> Being late at the turns will kill an analysis based earnings momentum approach and as we are most likely in a big sideways market you can expect lots of turns.
> 
> Look at his biggest calls for the last year. MCE which was his number 1 pick for 2011 and he ramped endlessly with valuations up to $11 odd dollars and QR National where he was the media’s go to man to mock the QR float as woefully overvalued.  The market a year later says he was dead wrong on both – but the most disturbing thing is his integrity around MCE when after the price collapsed he claimed never being heavily invested.
> 
> Montgomery might like to promote himself the next Buffett, but the record, the strategy,  the integrity, the secrecy,   maybe he’s the next .....




I thought the names looked familiar.  The now chairman of CAM is/was an associate of Geoffrey Wilson of WAM, who is also a Director of CAM. Same with Julian J Gosse and all three are on Australian Leaders Fund (ALF) along with Mr Justin Braitling whose company externally manages ALF.  Hmm, now there is value for you *without* the need to subscribe to any software.  Simply get on a board.


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## craft

Judd said:


> I thought the names looked familiar.  The now chairman of CAM is/was an associate of Geoffrey Wilson of WAM, who is also a Director of CAM. Same with Julian J Gosse and all three are on Australian Leaders Fund (ALF) along with Mr Justin Braitling whose company externally manages ALF.  Hmm, now there is value for you *without* the need to subscribe to any software.  Simply get on a board.




And it’s interesting to note that since John Abernethy took over the investment mandate from RM on 16/2/09 CAM has actually slightly outperformed the XAO accumulation index.

It would be really interesting to know what Geoff Wilson thinks or RM and under what circumstances RM left – Looking at the performance I reckon they threw his sorry **** out of there.


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## quadfin

So_Cynical said:


> In essence your paying for stock tips in conservative stocks, no entry or exit strategy, no trade management, no position sizing, no broad strategy at all....seems a lot to pay for reasonably obvious tips.
> 
> Obvious because A1 company's (high ROE) seem to share some quality's.
> 
> 
> very low or no debt
> No hard assets (don't own anything)
> Not capital intense (service providers)
> History of paying dividends
> 
> The above list narrows the all Ords down to less than 50 company's, and that cost you nothing.




you are so wrong so cynical on every point except low debt
trooper you opened a can of worms the ta lovers hate FA, they are like vegetarians at a BBQ
I currently pay for stock doctor & skaffold, both are completely different & intend to keep both



Skaffold is not a black box, its a valuation system & a supplier of FA Data for every stock on the market the choice of what you do with that info is yours, for me personally it just narrows down the further research i do. would i just create a portfolio based on the A1's No.
After reading his book the method appealed to me, however the time required to put it into practice was restrictive & also i could not use it to narrow down stocks through other FA based scanners, so $1300 is cheap to me. The method to arrive at the valuation is in his book, how he arrives at  an a1 of c5 status is also available in the program & also on his blog.

My investing is based on FA first than TA, so since the launch of his book i have applied the methodology & am pleased with the results, now i can search the market quickly & efficiently based on my criteria. 

Lots of Ta delusional talking about stuff on this thread they never bothered to learn.

Trooper i'm liking the program, it allows me to broaden perimeters to my liking, the only issue i have with it is lack of ability to export to a spreadsheet & it is still not a total package, no charting or user defined searches, still playing with it will report more in the future


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## McLovin

quafin]Skaffold is not a black box said:


> Lots of Ta delusional talking about stuff on this thread they never bothered to learn.




Most (all?) of the criticism in this thread has been from FAs not TAs.


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## waimate01

quadfin said:


> The method to arrive at the valuation is in his book...




Ahh, sort of.

He obfuscates in order to create mystique, but there's plenty of info around on the underlying formulas, none of which are rocket science (despite him adding 0.5 here and subtracting 0.5 there). 

But when you apply it, it doesn't match what he spruiks via his other mouthpieces.



quadfin said:


> However the time required to put it into practice...




The 'moat' for Roger is that it's too hard to apply his methods broadly. Unless you happen to have the necessary background. And if you do, his methods dissolve into nothingness. 

But never fear, he has another magic formula (that you get to see for substantially more than $50). 

"Never mind that man behind the curtain."


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## quadfin

McLovin said:


> Got a link to how he arrives at an "MQR" for a given company or can you explain it? Maybe you can explain how WOW was of inferior "quality" to MCE. I'm pretty sure Monty has said he won't disclose his black box of magic.
> 
> 
> 
> Most (all?) of the criticism in this thread has been from FAs not TAs.




no link mate sorry, i assume your referring to his blog & past posts regarding wow & mce, without pulling up the program i can later if you want, discount to intrinsic value would be the key to that argument, i do not get excited by wow 

as for what you refer to black box, valuations are company property be it lincoln or skaffold, even huntleys is sketchy  all programs are only useful if you know how to use them

let me know how i can scan the market for FA for free without paying money would love to know


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## McLovin

quadfin said:


> no link mate sorry, i assume your referring to his blog & past posts regarding wow & mce, without pulling up the program i can later if you want, discount to intrinsic value would be the key to that argument, i do not get excited by wow




He rated MCE as an "A1" and WOW as a "B2". It had nothing to do with IV. The question is, if you understand the methodology he uses to arrive at his MQR how can a large consumer staple retailer operating in what is effectively a duopoly be considered inferior to a mining services contractor?



quadfin said:


> as for what you refer to black box, valuations are company property be it lincoln or skaffold, even huntleys is sketchy  all programs are only useful if you know how to use them




Right, so if you don't know how the rating that gets spat out at the end is arrived at what else would you call it?



quadfin said:


> let me know how i can scan the market for FA for free without paying money would love to know




Commsec? How detailed is Skaffold's FA data? I'm assuming it's just the standard Morningstar data redone to look pretty. That is all available on Commsec (and several other websites).


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## quadfin

McLovin said:


> He rated MCE as an "A1" and WOW as a "B2". It had nothing to do with IV. The question is, if you understand the methodology he uses to arrive at his MQR how can a large consumer staple retailer operating in what is effectively a duopoly be considered inferior to a mining services contractor?"
> 
> gees I have to state the obvious, capital gain, again you are referring to an old case, if you buy & hold get an etf, mce was superior to wow for that period
> 
> Most people who do research themselves would have exited mce once it reached its peak & strangely enough its IV, at the time that call was made i agree with RM... I had an exit strategy.
> 
> 
> 
> "Right, so if you don't know how the rating that gets spat out at the end is arrived at what else would you call it?"
> 
> i do understand do you obviously not, read up, i'm not here for private lessons
> 
> 
> Commsec? How detailed is Skaffold's FA data? I'm assuming it's just the standard Morningstar data redone to look pretty. That is all available on Commsec (and several other websites).




as far as i know morningstar is the benchmark for data, providers are licensed to provide aspects of it & not allow duplication, ie capability for users to take to spreadsheets.

Dude commsec does provide some data, just not the amount of data i require nor does it have the search functionality i require, hence i pay for stock doctor & skaffold
nor is commsecs TA package enough for me, its rubbish

plus my time is money i want info at a press of a button not an afternoon wading through figures


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## McLovin

quadfin said:


> as far as i know morningstar is the benchmark for data, providers are licensed to provide aspects of it & not allow duplication, ie capability for users to take to spreadsheets.
> 
> Dude commsec does provide some data, just not the amount of data i require nor does it have the search functionality i require, hence i pay for stock doctor & skaffold
> nor is commsecs TA package enough for me, its rubbish




What does Skaffold have over Commsec? I'm being serious, because the SQL query tool on Commsec seems to get most of the data that retail platforms will offer to compare companies and it's copy/pasteable into Excel.

Capital IQ's database is superior to Morningstar's. The data on Capital IQ is far cleaner.


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## quadfin

McLovin said:


> What does Skaffold have over Commsec? I'm being serious, because the SQL query tool on Commsec seems to get most of the data that retail platforms will offer to compare companies and it's copy/pasteable into Excel.
> 
> Capital IQ's database is superior to Morningstar's. The data on Capital IQ is far cleaner.




first off most of my previous response was inserted in the quote sorry about that i'm new here
Yeah i agree there is debate on the cleanliness of data from morningstar, i have no opinion.

I could not rely on commsec for my scans from memory its very basic, my own created FA filter could not be entered as it did not have the perimeters required.

the fa scans available from hubb stockdoctor & skaffold make commsec look like kindergarten 

Hence i pay


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## craft

McLovin said:


> Capital IQ's database is superior to Morningstar's. The data on Capital IQ is far cleaner.



 basis for that statement is?


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## McLovin

craft said:


> basis for that statement is?




Anecdotal . And not necessarily my own. As I've mentioned before I haven't used the premium Morningstar/FA only Capital IQ.

In my limited use of Capital IQ I never noticed errors. I regularly spot them in the free Morningstar data.


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## McLovin

quadfin said:


> first off most of my previous response was inserted in the quote sorry about that i'm new here




I assume this is your response below?



quadfin said:


> gees I have to state the obvious, capital gain, again you are referring to an old case, if you buy & hold get an etf, mce was superior to wow for that period




No, the MQR has nothing to do with capital gain or SP performance. It's about measuring/predicting/guessing the likelihood of a "capital event"; ie a need to raise money. 



quadfin said:


> Most people who do research themselves would have exited mce once it reached its peak & strangely enough its IV, at the time that call was made i agree with RM... I had an exit strategy.




Here's what Monty said about MCE as its SP was hitting $9...



> There are no hard and fast rules around this. And don’t believe you can come up with a winning approach with a simple ‘sell when 20% above intrinsic value’ approach either.
> 
> What you MUST do is look at the future prospects. In particular, is the intrinsic value rising? I believe it is for Matrix (and I am not the only fund manager who does – you could ask my mate Chris too).
> 
> ...
> 
> Personally I believe one of my most important contributions to the principles of value investing is the idea of future valuations. Nobody was talking about them at the time I started mentioning 2011 and 2012 Value.able valuations and rates of growth. They are important because we want to buy businesses with bright prospects. And a company whose intrinsic value is rising “at a good clip” demonstrates those bright prospects.
> 
> If you have more faith and conviction that the business will be more valuable in one, two and three years time, you may be willing to hold on. *I am currently not rushing to sell Matrix*, however I do hope for much lower prices (buy shares like you buy groceries…)




{bolding mine}

http://blog.rogermontgomery.com/when-to-sell-matrix-and-other-adventures-in-value-able-investing/

Hardly sounds like a guy who thought MCE was well over its IV...I assume his black box would have said it wasn't overpriced as well.


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## craft

McLovin said:


> Anecdotal . And not necessarily my own. As I've mentioned before I haven't used the premium Morningstar/FA only Capital IQ.
> 
> In my limited use of Capital IQ I never noticed errors. I regularly spot them in the free Morningstar data.




Hi McL
I’ve had a chance to look at both now and my conclusion was that the differences in accuracy are marginal. 

As far as verifying the data CIQ has a very useful feature in being able to drill to the source document when something looks abnormal.

Either database is adequate for prelim analysis but neither is perfect. – best to check your own chute before jumping.

As for the free data which seems to be generally sourced from Morningstar – I wonder how much is lost in the transfer process.  Like when earnings are quoted is it as reported, adjusted for abnormal, normalized, weighted, diluted etc – all are available on the main Morningstar database and it would depend on which line is linked too. Perhaps the errors occur with the links.

Have you got any examples of errors on a free site – It would be interesting to compare it to Finanlysis.

The consensus estimates on Comsec seem to be very limited in the numbers of analyst contributing compared to the paid versions and very slow in updating. 

If you open up the comparison between CIQ and Morningstar to include interface, Screening, exporting data etc then CIQ wins hands down (CIQ is quite awsome actually) but the core databases are very similar IMO.

Cheers


----------



## Miner

A late entry in this thread and I am not yet a member of Skaffold system though have been getting lot of emails from them asking to become founder member.

Now the emails have stopped.

I have some observation about Skaffold valuation:

They are look alike of Stock Vale and stock doctor. I am not saying same.

Clime used to boast a lot but could not prove to be a succesful venture. Look at Clime own performance table.

Lastly, to be fair for skaffold - they offer 30 days money back guarantee. So in reality you can make or lose money and still get out after 30 days. I believe that offer is fair and reasonable even for the worst critic of Skaffold.


----------



## asxiq

1) from a 30000 ft level the valuation formula used by roger seems to a variant of 'Gordon Growth Model' & or dividend discount model what prof A.Damodaran describes in his book "Damodaran on valuation"

2) he seems to follower a ben graham from the tv talks that i glanced , 

" In the 1970s, an investor named James Rea was convinced enough of the value of these screens that he founded a fund called the Rea-Graham Fund, which would invest in stocks based upon the Graham screens. While it had some initial successes, the fund floundered during the 1980s and early 1990s and was ranked in the bottom quartile for performance " from the book investment fables page no.67

in short a favourable investment theme offlate is to mix with value with momentum .. something in the lines of Josef Lakonishok 
http://articles.businessinsider.com...-stocks-price-to-book-value-earnings-surprise

ps:i don't have access to skaffold


----------



## McLovin

craft said:


> Hi McL
> I’ve had a chance to look at both now and my conclusion was that the differences in accuracy are marginal.
> 
> As far as verifying the data CIQ has a very useful feature in being able to drill to the source document when something looks abnormal.
> 
> Either database is adequate for prelim analysis but neither is perfect. – best to check your own chute before jumping.
> 
> As for the free data which seems to be generally sourced from Morningstar – I wonder how much is lost in the transfer process.  Like when earnings are quoted is it as reported, adjusted for abnormal, normalized, weighted, diluted etc – all are available on the main Morningstar database and it would depend on which line is linked too. Perhaps the errors occur with the links.
> 
> Have you got any examples of errors on a free site – It would be interesting to compare it to Finanlysis.
> 
> The consensus estimates on Comsec seem to be very limited in the numbers of analyst contributing compared to the paid versions and very slow in updating.
> 
> If you open up the comparison between CIQ and Morningstar to include interface, Screening, exporting data etc then CIQ wins hands down (CIQ is quite awsome actually) but the core databases are very similar IMO.
> 
> Cheers




Thanks craft

I don't use the free data that often, I go straight to the source, but if I do find an error I'll post it to see what FA says. It would be interesting if FA is different to the free data. Interesting that the difference is only marginal.

I've not really used the interface for CIQ (although I have used the data) but I'll be subscribing in the new year.

Cheers


----------



## MichaelSy

craft said:


> The history is all there in CAM for you to investigate yourself.
> 
> What about you?
> 
> Despite all the value investing rhetoric.




Craft,

Thanks for posting back in regards to my comment.

Excuse my ignorance but he was the fund manager at CAM, which clearly was underperforming the index - as depicted by your graph?

I am most of the way through his book and the resounding message to me is, you can make money by value investing (buy good companies at bargain prices).

Value investing: Let's say, hypothetically, you want to invest in steel manufacturers. You find someone who has been in management for 20 years in the steel industry and you find out which companies are performing well and likely to perform well into the future. You ask him/her which steel producers are competitive and well managed. While you are at, you get them to teach you how the steel industry works. You buy this stock, and speculate that it will increase into the future, or until the circumstances change.

Rinse and repeat for all the other industries listed on the exchange.

I don't see any other way how you can truly "Understand the business". Regardless of how many financial statements you read about a company.

I mean, essentially the message is that you should buy a company because it is a valuable company. Except I wouldn't have a single clue whether I should buy the corner store up the road becuase I don't know whether it is valuable or not - and from learning accounting at university, the message is: that it is not good to rely on the financial statements (which RM relies on in his book, and probably Skafold). So how else am I to work out if it is valuable?


----------



## McLovin

MichaelSy said:


> Value investing: Let's say, hypothetically, you want to invest in steel manufacturers. You find someone who has been in management for 20 years in the steel industry and you find out which companies are performing well and likely to perform well into the future. You ask him/her which steel producers are competitive and well managed. While you are at, you get them to teach you how the steel industry works. You buy this stock, and speculate that it will increase into the future, or until the circumstances change.
> 
> Rinse and repeat for all the other industries listed on the exchange.
> 
> I don't see any other way how you can truly "Understand the business". Regardless of how many financial statements you read about a company.




You've described fundamental investing, not value investing specifically.

Certain types of businesses are easier to understand than others. Find a circle of competence and stick with it. As I've mentioned before I try and find businesses with high recurring revenues because it makes estimating earnings easier and gives those estimates a margin of safety.

The key to value investing above all else is the margin of safety.


----------



## MichaelSy

McLovin said:


> You've described fundamental investing, not value investing specifically.
> 
> The key to value investing above all else is the margin of safety.




My mistake.

Good point, I will certainly remember that one - margin of safety.

Do you think Skaffold better assists in working out the margin of safety?


----------



## McLovin

MichaelSy said:


> Do you think Skaffold better assists in working out the margin of safety?




It depends how you approach it. Skaffold markets itself as a "valuation service" (I believe Monty has used this term when hyping it on his blog). As a "valuation service" it doesn't work because, as has been discussed ad nauseum on the RM thread the formula has some serious flaws.

If however you use Skaffold to obtain fundamental data (and I have no idea how good/bad the data is) then I guess it could help you to understand and determine margin of safety.

I wouldn't trust the MQRs or the valuation formula to make an investment decision though.


----------



## The Trooper

So_Cynical said:


> Trooper...post in real time or it didn't happen.
> 
> Your last post in the JBH thread was 15th-July-2011 before the big dip....if your gona spruk something, credibility is an issue...interesting that you posted in the JBH thread that you were buying at around the $15 level, well before Skaffold.




Very observant So Cynical. The stocks i posted were all bought post-skaffold subscription. Yes, have bought jbh before. Panicked and sold after the price drop when the shares returned to break even purchase point then rebought after i subscribed to Skaffold. I still stand by my first buy.


----------



## The Trooper

McLovin said:


> If however you use Skaffold to obtain fundamental data (and I have no idea how good/bad the data is) then I guess it could help you to understand and determine margin of safety.




The following is an example of some of the data for cash converters. The summary is:




For each company there is an evaluation function where you can select the history of data from the following drop down menu;




An example of the cash flow chart and history are as follows, the notation on the cash flow chart is the year summary from where the mouse hovered when i selected it;


----------



## prawn_86

The Trooper said:


> The following is an example of some of the data for cash converters. The summary is:
> 
> For each company there is an evaluation function where you can select the history of data from the following drop down menu;




Looks the same as what Netwealth (and other brokers i'm assuming) provides for free just in a bit better format....


----------



## quadfin

McLovin said:


> I assume this is your response below?
> 
> 
> 
> No, the MQR has nothing to do with capital gain or SP performance. It's about measuring/predicting/guessing the likelihood of a "capital event"; ie a need to raise money.
> 
> 
> 
> Here's what Monty said about MCE as its SP was hitting $9...
> 
> 
> 
> {bolding mine}
> 
> http://blog.rogermontgomery.com/when-to-sell-matrix-and-other-adventures-in-value-able-investing/
> 
> Hardly sounds like a guy who thought MCE was well over its IV...I assume his black box would have said it wasn't overpriced as well.





I agree they are damning statements if it doubled everyone would be a fan,,,, the key is do not follow either way
 Skaffold its not a black box (if you think it is your deluded) FA changes be on the ball

i will say like Roger, morningstar huntleys & the scourge of the newsletters port phillip publishing trading halts after every picks, people follow who cares i do not, i tend to get out when they are in.


----------



## quadfin

McLovin said:


> You've described fundamental investing, not value investing specifically.
> 
> Certain types of businesses are easier to understand than others. Find a circle of competence and stick with it. As I've mentioned before I try and find businesses with high recurring revenues because it makes estimating earnings easier and gives those estimates a margin of safety.
> 
> The key to value investing above all else is the margin of safety.




Mclovin you put the pox on the thread than come back with a roger quote "The key to value investing above all else is the margin of safety"

Thanks


----------



## quadfin

McLovin said:


> He rated MCE as an "A1" and WOW as a "B2". It had nothing to do with IV. The question is, if you understand the methodology he uses to arrive at his MQR how can a large consumer staple retailer operating in what is effectively a duopoly be considered inferior to a mining services contractor?
> 
> .





Capital gain profit we are not all buy & holders


----------



## quadfin

prawn_86 said:


> Looks the same as what Netwealth (and other brokers i'm assuming) provides for free just in a bit better format....





prawn can you scan that data?????????????? For free on your own peremeters????????

Is it free


----------



## quadfin

McLovin said:


> It depends how you approach it. Skaffold markets itself as a "valuation service" (I believe Monty has used this term when hyping it on his blog). As a "valuation service" it doesn't work because, as has been discussed ad nauseum on the RM thread the formula has some serious flaws.
> 
> If however you use Skaffold to obtain fundamental data (and I have no idea how good/bad the data is) then I guess it could help you to understand and determine margin of safety.
> 
> I wouldn't trust the MQRs or the valuation formula to make an investment decision though.




Mclovin or mcpox easy to sit afar and throw monkey poo,,, lots of people follow brokers consensus, lincoln valuations & now montgomery valuations. 

Each to their own, (i follow none) everyone is not an expert (funny the experts just lose other peoples money whilst getting extremely overpaid), if huntleys  montgomery & stockdoctor provide a education for some people and its a tax deductible expense who cares
 personally everything that gets spat out of a scan is only a mark for further investigation

Mclovin where do you find your picks without these programs.?????


----------



## McLovin

quadfin said:


> Mclovin or mcpox easy to sit afar and throw monkey poo,,, lots of people follow brokers consensus, lincoln valuations & now montgomery valuations.




Good for them, each to his or her own, as you say. I wouldn't and I, along with other posters, have given an opinion as to why Skaffold isn't worth the money (the formula has some issues and the rating methodology is opaque) . If you believe it is worth it then use it, no skin off my back. 



quadfin said:


> Each to their own, (i follow none) everyone is not an expert (funny the experts just lose other peoples money whilst getting extremely overpaid), if huntleys  montgomery & stockdoctor provide a education for some people and its a tax deductible expense who cares




I don't understand, the "experts just lose other people's money" but you subscibe to their services? I would never consider a subsciption based service on whether it is or isn't tax deductible.



quadfin said:


> Mclovin where do you find your picks without these programs.?????




Scans, reading on here, talking to people.


----------



## Ves

quadfin said:


> Mclovin you put the pox on the thread than come back with a roger quote "The key to value investing above all else is the margin of safety"
> 
> Thanks



Surely you mean to say that Roger Montgomery paraphrased this from the musings of those generations before him? It's certainly not an original or unique idea that he came up with...


----------



## McLovin

Ves said:


> Surely you mean to say that Roger Montgomery paraphrased this from the musings of those generations before him? It's certainly not an original or unique idea that he came up with...




What does this remind you of...?


----------



## McLovin

prawn_86 said:


> Looks the same as what Netwealth (and other brokers i'm assuming) provides for free just in a bit better format....




Yes, it confirmed what I thought it was. The same data just with lipstick on it. You really are paying for the MQR and valuation service.


----------



## quadfin

McLovin said:


> Yes, it confirmed what I thought it was. The same data just with lipstick on it. You really are paying for the MQR and valuation service.




Yeah of course you are, whilst I am no follower, at the end of the day its another tool & i hope their are more white robed followers than in the picture you posted, another tool to front run like the ASCI fluff of years ago, maybe they still do it who knows my circumstances have changes i dont follow the market daily anymore.

More info more ops more certainty 

Still do not see the comparison to netwealth, from a previous poster still i reckon a lot of financial advisors have bought skaffold just to confuse the clients of their superior understanding or lack of understanding, skaffold will never give you a buy, if you use it like that you will fail, same with lincoln, same with morningstar etc etc

As i have said before mclovin "i am an individual you cant fool me" Jacko 1985, its not a black box but used in conjunction with other analysis, it works for me. good luck with your system.


----------



## Ves

When you say "other analysis", what do you mean, quadfin?

Tough day to the guy who bought JB Hifi on Roger's program's recommendation, by the way. A small profit to a bigger loss will be a hard pill to swallow, I imagine. But the signs were all there (not that the program can tell you this information).


----------



## quadfin

Ves said:


> When you say "other analysis", what do you mean, quadfin?
> 
> Tough day to the guy who bought JB Hifi on Roger's program's recommendation, by the way. A small profit to a bigger loss will be a hard pill to swallow, I imagine. But the signs were all there (not that the program can tell you this information).




exactly vesupria, its not a black box, its info, people take the easy path than complain, same happens on the stockdoctor forum when stocks are downgraded, as you said the signs were all there & no program can replace  your own brain., hopefully the guy learned a valuable lesson, that you always should have stop losses & a trading plan, if he did their would be no bitter pill to swallow

Other analysis, here is my process people may think its rubbish but its mine i do not follow newsletters or market gurus or follow other peoples trading plans nor should anyone follow mine
1) scan the market for FA, via my criteria
2)scan the market for FA with stockdoctor on their criteria
3)set parameters in skaffold scan
4)Collate results move to spreadsheet
5)review & research via stockdoctor & skaffold
6) choose the best candidates, set entry & exit via FA
7) Run Technical analysis
8) set entry & exit via TA & FA
9)Set alerts
10) review before entry once alerts triggered
11)enter position set stop losses & stop profits
12) monitor & review winning trades & losing trades
13) continually monitor & alter system & stops if needed.
14) drink beer


----------



## Ves

There is a lot of talk in here about "financial data" (I hope at the very least that this includes a review of the Financial Statements).

However, to me, this discounts the most important part of my analysis; which is looking at the qualitative aspects that are not necessarily directly measurable by numbers such as the business model, competitive advantages and other intangible factors (such as industry expertise, management).

Since the user has no direct input into the Skaffold valuation calculations; they will never be able to incorportate their research and assumptions gained from this important analysis into the final product. It serves no real use to me as a scanning tool as I generally find businesses by reading forums such as this one, seeing company announcements or news articles and hearing details of their business model which often prompts further research. Outside of that, the major ratios such as Return on Equity can be scanned via Commsec.


----------



## quadfin

Ves "(I hope at the very least that this includes a review of the Financial Statements)."

Dude by paying for programs my review is done by an analyst if i want to question it they are a phone call away, i cannot review the whole market as an individual hence i pay and not stuck on spending hours reviewing multiple companies

vespuria "However, to me, this discounts the most important part of my analysis; which is looking at the qualitative aspects that are not necessarily directly measurable by numbers such as the business model, competitive advantages and other intangible factors (such as industry expertise, management)."

yes vesupria that is some what valid what i termed FA includes business model, competitive advantages not intangible factors (such as industry expertise, management).

vespuria "Since the user has no direct input into the Skaffold valuation calculations; they will never be able to incorportate their research and assumptions gained from this important analysis into the final product."

i disagree as i have stated previously my trading plan is stated whats yours??? skaffold is only another input not a final decision to a buy ,



vespuria "It serves no real use to me as a scanning tool as I generally find businesses by reading forums such as this one, seeing company announcements or news articles"

for a tool you have never used its rich saying its no real use to you, personally i rate tips from forums & news Articles as the lowest value in my research, actually they are not even part of my research or analysis

vespuria " Outside of that, the major ratios such as Return on Equity can be scanned via Commsec."

solid gold if your happy with a commsec scan stick with it, personally i need more, and commsec does not have the perimeters i need


----------



## Ves

quadfin said:


> for a tool you have never used its rich saying its no real use to you, personally i rate tips from forums & news Articles as the lowest value in my research, actually they are not even part of my research or analysis



Just to clarify, I do not take tips from forums and other sources. But I do use ideas from knowledgable sources as a basis for the start of my research.

For instance, Forge gets mentioned a lot on this forum as a quality company by other value investors. I would go and do my own independent analysis on this company and see if it is worth consideration. If you are curious I made a post or two in Robusta's thread about this company.

I don't trust experts to read Financial Statements for themselves, let alone on my behalf.  If I wanted to cut down time I would put my money in a managed fund or even an index fund. I personally enjoy all of the hard work that goes into analysing companies with my own set of eyes and coming to my own conclusions.


----------



## quadfin

Ves said:


> Just to clarify, I do not take tips from forums and other sources. But I do use ideas from knowledgable sources as a basis for the start of my research.
> 
> For instance, Forge gets mentioned a lot on this forum as a quality company by other value investors. I would go and do my own independent analysis on this company and see if it is worth consideration. If you are curious I made a post or two in Robusta's thread about this company.
> 
> I don't trust experts to read Financial Statements for themselves, let alone on my behalf.  If I wanted to cut down time I would put my money in a managed fund or even an index fund. I personally enjoy all of the hard work that goes into analysing companies with my own set of eyes and coming to my own conclusions.





So you take info from knowledgeable sources on forums & newspapers whose opinion is based on data analysts. Never put you money in a managed fund maybe an lic if your lazy as for index funds, do your research before hand they are not as simple as they appear, I'm glad you enjoy all the hard work that goes into analysing companies, personally i find it easier to get the info chopped & ready for the pan


----------



## Tightwad

It's like the cheese that you can buy already grated but you pay more and get less.


----------



## So_Cynical

Tightwad said:


> It's like the cheese that you can buy already grated but you pay more and get less.




Its true

At Harris farm this arvo

Aust Shaved Parmesan cheese $39 a Kg
Aust Parmesan cheese in a wedge $29 a Kg

I passed on both...i don't pay more than $20 a kilo for any cheese.


----------



## nulla nulla

So_Cynical said:


> Its true
> 
> At Harris farm this arvo
> 
> Aust Shaved Parmesan cheese $39 a Kg
> Aust Parmesan cheese in a wedge $29 a Kg
> 
> I passed on both...i don't pay more than $20 a kilo for any cheese.




You should have grabbed the "Millel Pecorino" then. It was only $19.99 in a wedge.  Goes well with the pasta.

They were also running a weekly special on "Jindi" cheeses at our local Harris Farm, $4.99 for a 200 gram Brie or Camembert. About $3.00 better than the supermarket chains.


----------



## skc

The Trooper said:


> The following is a screenshot of the three buys i have made since subscribing to Skaffold. I will likely sell these in the near future as forecasts of international financial gloom and doom seem to be rife at the moment. Regardless of the real impact of these forecasts i think it will have a flow on effect to Australia so may have the opportunity to buy these shares back at a discounted rate;
> 
> View attachment 45472
> 
> 
> This is not proof of a track record but is not bad for a less than 1 month old portfolio and i understand there are people who would take the time to research and invest in these same stocks without using a program to help them. I don't have the free time to spare.




I'd imagine the update from JBH would change it's Skaffold valuation by a fair bit.

How regularly is that updated? And how quickly does it issue a sell signal (if there's ever such a thing)?


----------



## The Trooper

skc said:


> I'd imagine the update from JBH would change it's Skaffold valuation by a fair bit.
> 
> How regularly is that updated? And how quickly does it issue a sell signal (if there's ever such a thing)?




Current Skaffold valuation for JBH is around $15.80 increasing to $18.99 over the next two years. 

Skaffold is not updated in real time but overnight based on close of business the previous day. Priority of update and frequency i am unsure of as prominent stocks like JBH seem to be updated overnight however there is another small cap stock i am watching currently subject of a takeover bid that doesn't look like it's been updated for a while or perhaps the valuation is independent of the takeover bid which is speculative as these always have the chance of failing.


----------



## skc

The Trooper said:


> Current Skaffold valuation for JBH is around $15.80 increasing to $18.99 over the next two years.
> 
> Skaffold is not updated in real time but overnight based on close of business the previous day. Priority of update and frequency i am unsure of as prominent stocks like JBH seem to be updated overnight however there is another small cap stock i am watching currently subject of a takeover bid that doesn't look like it's been updated for a while or perhaps the valuation is independent of the takeover bid which is speculative as these always have the chance of failing.




So you are still holding based on Skaffold's valuation in 2 years? 

Does Skaffold ever issue a sell signal or equivalent for a loss?


----------



## McLovin

skc said:


> Does Skaffold ever issue a sell signal or equivalent for a loss?




I don't think Skaffold issues buy or sell signals. It just gives you a valuation and you have to decide. It's part of the charm/illusion of thinking you are actually doing any work.


----------



## skc

McLovin said:


> I don't think Skaffold issues buy or sell signals. It just gives you a valuation and you have to decide. It's part of the charm/illusion of thinking you are actually doing any work.




Well as long as people know what they are signing up for, and they know when to sell on their own accord, then that seems OK.

But if the assumption is that it will pick such awesome stocks which one would never need to sell... then it's probably the usual buy and hold forever pitfall.

With this kind of valuation I think a >20% fall in the valuation should trigger a sell, regardless of how much the share price is trading below the reduced valuation.... otherwise you can trail the valuation all the way to ground zero.


----------



## McLovin

skc said:


> Well as long as people know what they are signing up for, and they know when to sell on their own accord, then that seems OK.
> 
> But if the assumption is that it will pick such awesome stocks which one would never need to sell... then it's probably the usual buy and hold forever pitfall.




I agree. However, there is a lot of emphasis in the comments section of Roger's blog about "coming up with a valuation". Which leads me to believe many are just plugging some numbers in, making sure the MQR is decent and then assuming your second paragraph holds true.


----------



## bargainbenno

So what are people's thoughts on Skaffold now? Better than Stock Doctor? Anyone finding it proving worth the money?


----------



## tech/a

bargainbenno said:


> So what are people's thoughts on Skaffold now? Better than Stock Doctor? Anyone finding it proving worth the money?




All your getting is a valuation OPINION 
nothing more.
Unless a larger majority agree with the potential of a stock
To reach that valuation ---you wont profit.

Personally I can see all I need in a chart.

I've seen countless charts rise AND fall in the face
Of Fundamenral --- valuation--- err opinion!

I have seen trader after trader sacrifice opportunity cost in the face of 
Stagnation and un certainty.
I've seen fanatical support of losses due to an un wavering
Valuation "opinion". Right from profit to spectacular loss!

Technically I have far more control.


----------



## Garpal Gumnut

notabclearning said:


> could anybody lend me a username and password to let me try it out.




username is            oneborneveryminute
password is             whoneeds$1330

all in lower case

gg


----------



## Nutmeg

McLovin said:


> As I've mentioned before I try and find businesses with high recurring revenues because it makes estimating earnings easier and gives those estimates a margin of safety.
> 
> The key to value investing above all else is the margin of safety.




Well said.  After all, the essential question is: how much is this company worth?  If you can't work that out, how can you work out how much a piece of it - a share - is worth?  In my view, strong established streams of recurring revenue provide the best basis for forming a valuation that stands the mostly likely chance of remaining accurate a year or two years hence.  It's the method Buffett uses.  Buying with a margin of safety then ensures greater upside and much reduced downside, i.e. permanent capital loss.  

On the issue of Skaffold, I heard Roger is pitching this to big financial institutions now.  If Skaffold comes to be used by large segments of the investing market, I suspect that the result will be that it will create its own valuation anomalies that those not using Skaffold will be able to profit from.  As I personally depend on valuation anomalies to make my investing decisions, I say that the more people that use Skaffold, the better.  If those people turn out to be institutions, I'll be very happy.


----------



## McLovin

The Trooper said:


> Current Skaffold valuation for JBH is around $15.80 increasing to $18.99 over the next two years.




What's JBH's current Skaffold valuation?


----------



## skc

McLovin said:


> What's JBH's current Skaffold valuation?




Current year $8.53, FY13 $13.43.

http://blog.rogermontgomery.com/wp-content/uploads/2012/04/Skaffold-JBH-Value-chart-2012-04-27.png

Skaffold is nothing more than a fancy, graphically rich calculator. It says nothing about a company's competitive advantage, reliability of earnings, risks of changing external environment etc. 

Indeed, RM said it himself quite well.


> Skaffold’s *conservative valuation *estimate for JBH is $13.43 for 2013 as can be seen by the thin orange line in the above chart.* Whether the share price now approaches that valuation or that valuation instead is revised lower and approaches the price *will be determined by whether the company can harness its opportunity and when the irrational pricing associated with collapsing competitors ends. Of course after that, its success will be dependent on the depth of the impact of the structural change represented by the retail shift global and online.



http://blog.rogermontgomery.com/

Those who invest based on Skaffold alone are ignoring that sort of stuff. I just don't know how much of Skaffold's marketing emphasise this.


----------



## Ves

skc said:


> Current year $8.53, FY13 $13.43.



Love it, 50% fluctuation in the space of 12 months.  I love earnings momentum investors and their constantly moving goal posts.


----------



## Ves

Have a watch of this youtube video from about 3:00 onwards and look at the stocks he names as those "if the market closed tomorrow for 3 years I would not care." I know this is from later in 2010, but not even 3 years onward and he has publicly stated that he has sold some of these. 

More proof that he is a salesman rather than an investor of any conviction.

http://www.youtube.com/watch?v=i0hzjWagPuI&feature=relmfu

edit:  and laughing at about 4:15 where he talks about the funds management business and how he never lost money.


----------



## McLovin

skc said:


> Current year $8.53, FY13 $13.43.




Ridiculous. He's a FM and his job is to make money for his clients, I understand that. But, he is using his book and blog as marketing material for Skaffold. The issue being that Skaffold appears to be nothing more than a program that is trying to sit slightly in front of the earnings curve (using analysts' forecasts no less!) and capture that momentum. The book and blog though advocate a long term buy and hold strategy. Isn't their a risk of leading novice investors into a false sense of security in believing they are buying something below it's IV, only to have the rug pulled out from under them when the IV suddenly gets adjusted downward. In the case of JBH, it had an IV of $19 for FY13 as late as January this year. 



			
				skc said:
			
		

> Skaffold is nothing more than a fancy, graphically rich calculator.




It is very GUI.:


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## skc

McLovin said:


> Ridiculous. He's a FM and his job is to make money for his clients, I understand that. But, he is using his book and blog as marketing material for Skaffold. The issue being that Skaffold appears to be nothing more than a program that is trying to sit slightly in front of the earnings curve (using analysts' forecasts no less!) and capture that momentum. The book and blog though advocate a long term buy and hold strategy. Isn't their a risk of leading novice investors into a false sense of security in believing they are buying something below it's IV, only to have the rug pulled out from under them when the IV suddenly gets adjusted downward. In the case of JBH, it had an IV of $19 for FY13 as late as January this year.
> 
> It is very GUI.:




I am sure somewhere in the footnote or fine print says "Skaffold valuations only work when you have bought an awesome company". But RM himself doesn't know awesome companies from a bar a soap.

MCE was a classic example where, not only that it is a capital intensive cyclical stock, it operates in a very limited niche market where it alrealy had 1/3 share being 1 of 3 major competitor. His analysis purely from the ROE and extrapolating to the future was both laughable and sad. It's all very GUI (not sure I get the joke right though).


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## ROE

like he values TLS at $2.30 or $2.40 what a joke
He's a trend predictor using some fuzzy formular 
based on ROE that is all there is to it.

when things going up and throw good out roe he pump
when things going bad throw bad roe he dump..


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## tinhat

McLovin said:


> It is very GUI.:






skc said:


> It's all very GUI (not sure I get the joke right though).




Off Topic... Geek joke alert...

http://www.youtube.com/watch?v=hkDD03yeLnU


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## odds-on

McLovin said:


> Ridiculous. He's a FM and his job is to make money for his clients, I understand that. But, he is using his book and blog as marketing material for Skaffold. The issue being that Skaffold appears to be nothing more than a program that is trying to sit slightly in front of the earnings curve (using analysts' forecasts no less!) and capture that momentum. The book and blog though advocate a long term buy and hold strategy. Isn't their a risk of leading novice investors into a false sense of security in believing they are buying something below it's IV, only to have the rug pulled out from under them when the IV suddenly gets adjusted downward. In the case of JBH, it had an IV of $19 for FY13 as late as January this year.
> 
> 
> 
> It is very GUI.:




Skaffold could be marketed as momentum trading software. Is it cheaper than other trading software products?

I reckon you can make lots of dollar using the RM blog, as long you understand the blog "pump and dump". When there is a new "MCE" on the RM blog, I am going to buy straight away then watch like a hawk for company announcements - any bad news and I sell straight away. Behavourial finance at its most profitable, no need for business analysis or anything.

All value investors should note he is going to start a retail fund.


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## ScottyfromAussie

Who cares if Rog can't see a good stock from a bar of soap? Even if its all gimicks, his message is still "Go for high ROE companies with low debt, good prospects and good management + big margin of safety".

If Rog can't make money on it thats not my problem. You shouldn't buy a stock just because he says to and if you do its your fault if you lost. Welcome to the stock market 

*How to do a skaffold search without skaffold*

Personally I wouldn't buy skaffold. You can easily head over to stock-value and run a filter for high ROE + low debt and you can even throw in market cap if you like.

List the companies that show up

Then head on over to your commsec account and check each of the companies for consistentcy of ROE. Kick out the inconsistent ones (usually small mining companies with a once off windfall).

Then with the few companies that remain, go to asx.com and look up their latest financial report, check the cashflow to ensure its good.

Step 1 is complete! You've narrowed down your search to a relatively small group of stocks. 

Now you can move onto assessing their management and future business prospects. This is a huge step.

Once done you can estimate the IV (via Rogs method or DCF or whatever) and look for a big margin of safety.

In other words, (and I know this might sound scary), you have to do some work. Calculating a few numbers isn't going to make money here.

I think Buffetts got his quote wrong, you need to be 85% Fisher and 15% Graham.

Cheers,
   Scotty.

p.p.s If you lose money with the above, its your fault that you picked a bad company.


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## luutzu

*Skaffold - Roger Montgomery*

Has anyone use the web application Skaffold? Any opinions?

It's around $1k per year so for the Australian-market version.

I haven't sign up so can't, shouldn't, critique it but they do have a lot of videos of conferences and seminars and from these:

1. the charts seems OK, nothing to wow about;
2. the datasets are probably from reuters or one of those big data providers and Skaffold seem to develop around those
3. I don't think the Skaffold scores/rating works right: some companies Roger was demonstrating had some A1 rating but he said it's not really OK if you look at other scores or details
4. the price and intrinsic value chart would be useful but he's using, from memory, consensus forecasts value or at least value derived from analysts' forecasts... then when asked about Forge group, the chart clearly show the price is under the value but it's about to go broke, he said he wouldn't have bought it because its forecasted value is declining or something...

I've seen videos and demos from them and not too impressed but I could have my own reasons for that.

But I've watched a few of Mr. Montgomery's seminars/Q&A   and his investment philosophy doesn't seem coherent to me.

I mean, the guy obviously read Graham and follow Buffett and say he build his investment software and fund management around value investing... then go on and say he doesn't like this stock because a bunch of analysts, real professionals, has gone to the sites and their consensus, as seen in Skaffold, tells him the future is no good so he's not looking at it.

I have a hard time imagining Buffett calling up a broker or an analyst and ask what they reckon of this and that stock.

Or say that even though he had tried, and failed to find a useful method/system in Technical Analysis himself... it could work (if used with Skaffold), those technical indicator could work. That's just sales talk to me.

I'm not trying to pick on the guy, I mean I have no record or capital or reputation or experience like the guy... just wondering if this is representative of the "smart money" that's managing our retirement and advising investors.

I mean software like Skaffold, as they claimed, are being used by financial planners from Macquarie and one assumes elsewhere too... Clime would be another and that one's also no good.

I've read about and read interviews with successful managers/analysts and haven't had a close look at the industry but the more i look, the more Peter Lynch seems to not be kidding when he say anyone with a bit of brain and effort would beat these overpaid smart monies.


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## Faramir

*Re: Skaffold - Roger Montgomery*

You probably have searched and found this:

https://www.aussiestockforums.com/forums/showthread.php?t=23798&highlight=Skaffold

Many people with an opinion. You are looking for someone who has actually brought and used this system.

I was tempted to buy the system as a "short cut" but now I realise there is no short cuts to investing. I wish I could contribute but I have only tried a short Free Trial Period with 5 Stocks. When I used it, I wasn't educated enough to evaluate whether or not it would be valuable for me. I let the trial period lapse and I don't seem to miss it. I liked the bubbles and how he simply rates companies A1, A2, B1, etc. 

luutzu, your previous post on other topics have educated me. I believe that you probably do not need Skaffold but who am I to say without knowing you in person. You might say that I need Skaffold. Please let me do more reading first.


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## luutzu

*Re: Skaffold - Roger Montgomery*

Thanks Faramir, forgot there's a search feature.
The Lord of the Ring was awesome, not too keen on the Hobbitt though... way too long for its content.

I can't recommend Skaffold mainly because I haven't use it, but from what I have seen from demos etc., it's not that much more useful than what you'd get, for free, with a large broker like Comsec.

A forum member, Switest, point me to gurustock.com and i think i also found its UK equivalent - stockopedia... there's a couple other australian applications, a few minor ones in the US, but the two top ones i've seen are guru and stockopedia. 

I didn't sign up or paid for these, it's done more as research than anything... kinda like searching the forum before posting a new topic.

Glad you find some of what i said useful... if you haven't realised already, you will, there's nothing original there    I think originality in finance could only come from the application of these principles.


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## FxTrader

luutzu said:


> Has anyone use the web application Skaffold? Any opinions?
> 
> I mean, the guy obviously read Graham and follow Buffett and say he build his investment software and fund management around value investing... then go on and say he doesn't like this stock because a bunch of analysts, real professionals, has gone to the sites and their consensus, as seen in Skaffold, tells him the future is no good so he's not looking at it.



The reality is that Montgomery has always been just another quant with a formula for valuing companies that he believes is more accurate than others that use price as an input.  These days he's primarily a fund manager and occasional paid commentator/speaker.  Skaffold is a repacked and dressed-up version of Clime's old Stockval (now called StocksInValue) but much more expensive while offering little if any additional benefit to subscribers.

If you can extrapolate a strategy from RM's "Valuable" it's buy high quality stocks when they're cheap (undervalued by his model) and hang on to them forever unless they become overpriced (by how much is hard to say) or the underlying fundamentals change meaningfully for the worse (to late usually).  The problem though is that those great businesses are rarely cheap so you end up on the sidelines while the stock soars (CBA is one of many examples).

Skaffold and the like are more useful in determining what not to buy, it's not a trader's tool and the data and info provided are not changing enough to warrant an annual subscription purchase IMO.


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## McLovin

Offered without comment. Well maybe one comment: This system spat out a valuation of $13.77 for FGE and gave it an A2 rating (there's plenty of wildly optimistic price valuation from briefly looking at that list...).


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## VSntchr

McLovin said:


> View attachment 58234
> 
> 
> Offered without comment.




Pictures really do say MORE THAN WORDS!


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## DeepState

VSntchr said:


> Pictures really do say MORE THAN WORDS!




How do these screens relate (or not) to the Fund performance?  I don't understand how the results shown by their fund could differ so much from the reserved opinions being expressed for their Skaffold product.  No judgment being expressed.  I just don't understand.


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## McLovin

DeepState said:


> How do these screens relate (or not) to the Fund performance?  I don't understand how the results shown by their fund could differ so much from the reserved opinions being expressed for their Skaffold product.  No judgment being expressed.  I just don't understand.
> 
> View attachment 58235




It's interesting that he posts his total return since inception rather than annualised.


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## skc

DeepState said:


> How do these screens relate (or not) to the Fund performance?  I don't understand how the results shown by their fund could differ so much from the reserved opinions being expressed for their Skaffold product.  No judgment being expressed.  I just don't understand.




Because he doesn't practice what he preaches. He's often a trader of earning momentums as opposed to "buy-and-don't-care-if-market-is-shut-for-5-year" type of value investing.

And here's a pivot table of the top 50 stocks for 2013, sorted by Skaffold score.

Average return of the picks is -19.5%, with 17 winners (avg +39%) and 33 losers (avg -50%).

A1 performs the worst (except for the single B3 stock).


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## craft

DeepState said:


> How do these screens relate (or not) to the Fund performance?  I don't understand how the results shown by their fund could differ so much from the reserved opinions being expressed for their Skaffold product.  No judgment being expressed.  I just don't understand.




Playing follow the leader in relatively illiquid stocks is great for the leader, especially when the FUM are small in the early days. At least this time as funds have grown he has employed portfolio managers that have their own ideas, so hopefully there will be a better outcome then when he managed the portfolio at clime. (or maybe there wont - time will tell)


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## DeepState

skc said:


> Because he doesn't practice what he preaches. He's often a trader of earning momentums as opposed to "buy-and-don't-care-if-market-is-shut-for-5-year" type of value investing.
> 
> And here's a pivot table of the top 50 stocks for 2013, sorted by Skaffold score.
> 
> Average return of the picks is -19.5%, with 17 winners (avg +39%) and 33 losers (avg -50%).
> 
> A1 performs the worst (except for the single B3 stock).
> 
> View attachment 58236




Thanks SKC.  Thanks for sharing your calcs too.  

I have actually been on the receiving end of a discussion with members of their investment team, including their model builders.  Hence my interest. Disclosure: I do not have any financial relationship with them whatsoever. 

I understand that their fund uses a Buffett style approach but is screened first by their internal models, which I take to be Skaffold, though could be wrong.  These portfolios are much more concentrated than the Skaffold list.  Perhaps portfolio construction, further stock analysis from a shortlist or trading on momentum or something like it, can account for the difference.

In general, the types of investors who follow the Buffett style of investment have done well since GFC.  They fall within that category and I guess their numbers are genuine given they are more or less in line with that type of outcome.

What is clear to me is that there is a pretty major difference between the portfolio he develops, the stocks in the portfolio and the list which is provided.  

Bottom line for me: I appreciate your view..and I appreciate that you have provided it.  Thanks again.


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## DeepState

craft said:


> Playing follow the leader in relatively illiquid stocks is great for the leader, especially when the FUM are small in the early days.




Yep. Thanks Craft.


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## n00m

Faramir said:


> You probably have searched and found this:
> 
> Many people with an opinion. You are looking for someone who has actually brought and used this system.




Hi All,

First post. I had Skaffold membership for 1 year and decided not to continue with it. It is very much aimed at SMSF investors, which I am not, but I have watched RM for a number of years and was interested in the methodology. I had a trial for Stock-Val back when RM was at Clime too.

My background - complete newbie to stock investing, always sat on the sidelines...until last year. No background in reading financial reports, have read Stock-val's version of Value.able.

Differences between Stock-val circa 2009 (can't remember exactly when I got the trial but it was ages ago) and Skaffold:
* Stock-val used an adopted performance criterion that is manually adjusted by their analysts, so you can't reproduce the IV calculation yourself unless you know more than I did
* Skaffold has a nicer user interface

Skaffold pros for me - the nice graphical presentation of financial information. As a newbie who reads graphs better than tables of numbers, I found this very helpful - if the company you're looking at has suddenly started raising a heap of capital, that shows nicely on the graphs. Having access for a full year allowed me to get massed practice on reading cash flow and funding screens, which I found far more useful than the IV calculation. If you are a visual person and don't want to bother with learning how to read the numbers, a subscription to Skaffold or other IV-calculating program might be for you.

Skaffold cons for me - being in general a bargain hunter, I was spooked by how low IV was relative to share price - generally the good shares are trading at a fair premium and this caused me to leave those ones untouched, thinking that I was better off buying A1 stock trading at a discount to IV. This kept me out of some good stocks, and had me considering some bad ones (some stocks are out of favour for a reason - like the end of the mining boom. They might still be good companies but if nobody wants to buy then there's not going to be much capital gain eh?) 

Main lessons I learnt in the last year:
1) What needs pointing out to the absolute beginners is that Skaffold in and of itself is not everything you need to reduce the risk of losing money on shares. You still need a consistent method for working out entry, stop-loss and exit strategies, understand how your parcel size works to your risk profile and on top of all that make sure your trading strategy is not at odds with your personality, or you will find it difficult to stick with. That's the sum total of what I learnt from reading at least a dozen books on the sharemarket to distill my own strategy. All the information that Skaffold presents nicely and quickly should only serve to make you ask questions for your own research - can you explain why a particular share's price jumped or dumped? If you can already do this then perhaps Skaffold isn't for you.
2) For me the ability to read the numbers came from owning Skaffold, I didn't get the same benefit from Stockval for a short trial membership. I don't have a finance background and found the financial tables in Commsec quite daunting. However, with a pretty graph and the numbers underneath, eventually I learnt to read the numbers directly, since you can log into Skaffold as many times as you want to check. So for a visual person who isn't hampered by a bargain-hunting mentality (I bought quality leather shoes for $50/pr on the weekend), Skaffold, while pricey, might be one way to learn to read financial numbers. Of course, you have to add a fair dose of your own persistence in there too...

Just my 2c.


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## ROE

I usually don't trust small fund return figure, depend what stocks they hold that figure can be
easily be manipulated and there is no way to tell.

Let say you hold concentrated 15 stocks and the closing date for the report is 30/06
it wouldn't be too hard for you to make some trade that move price the way you want it
to move so the fund out perform the index and with smaller il-liquid stock it even easier.

 there are plenty of them claiming out performing the index
but most of their members aren't much richer


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## adrianb

*Skaffold now $550 until Tuesday? is it worth it?*

Skaffold now $550 until Tuesday? is it worth it?

 i'm a bit skeptical about this tool. Has anyone used the service made any profit?  is the service tax dedutable?

I'm a newbie and info would be appreciated.

Adrian:1zhelp:


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## McLovin

*Re: Skaffold now $550 until Tuesday? is it worth it?*



adrianb said:


> Skaffold now $550 until Tuesday? is it worth it?
> 
> i'm a bit skeptical about this tool. Has anyone used the service made any profit?  is the service tax dedutable?
> 
> I'm a newbie and info would be appreciated.
> 
> Adrian:1zhelp:




Have a look at this post and compare the prices then, the valuations and the current price.

https://www.aussiestockforums.com/f...t=23798&page=5&p=828193&viewfull=1#post828193


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## dchass

*Re: Skaffold vs Stock Doctor*

I am not a user of Skaffold but am currently attempting to study the usefulness of the program for my purposes, by evaluating the 7 day trial. It appears that Lincoln Stock Doctor is an alternative which performs a similar function. As a matter of interest, is anyone aware of a detailed comparative analysis between Stock Doctor and Skaffold?


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## watchdog11

*Skaffold data is out of date and just plain wrong! Why would you pay for a service that gives you incorrect market intelligence?*

Just checked BHP:
Skaffold says that BHP closed at $27.38
True closing price was $26.890

Skaffold says shares on issue: 5.32B
ASX says it is 3.21B

Skaffold says Market Capitalisation: 142.68B
ASX says: $86.36B

Check it yourself at http://www.marketindex.com.au/asx/bhp


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## luutzu

watchdog11 said:


> *Skaffold data is out of date and just plain wrong! Why would you pay for a service that gives you incorrect market intelligence?*
> 
> Just checked BHP:
> Skaffold says that BHP closed at $27.38
> True closing price was $26.890
> 
> Skaffold says shares on issue: 5.32B
> ASX says it is 3.21B
> 
> Skaffold says Market Capitalisation: 142.68B
> ASX says: $86.36B
> 
> Check it yourself at http://www.marketindex.com.au/asx/bhp




With BHP, it could be that the ASX figures are only for the ASX-listed part of BHP's duo-listed structure. Not sure as I haven't looked into BHP, but RIO is split like that.

So maybe the Skaffold figure is reflecting the entire BHPBilliton on all exchanges. 

More to the point, I don't find these out of the box consumer data/ratio sites useful or accurate at all. 

They all pretty much get the same data/ratios from one of some 3 data provider [or their reseller] and packaged it with different user interface, slightly prettier presentation of the dataset [charts and what not].

But deep down, it's all the same old data... most of which you can get for free from your broker or Google/Yahoo finance.

Start there, it costs you nothing... then if you find the company/stock is interesting, then simply open up its annual reports, goes through its presentations... get the latest share price and shares outstanding etc. to then invest or not.

And here's my shameless self-promotion... if you don't have the time or patience, or experience, to calculate all the ratios you need to look into for each company, use my app: www.danginvestor.com

It's not easy to use, people have been telling me to simplify it... If I know how to simply making-money, I'd be pretty dam rich already. Anyway, it does require you to read the reports, enter the financial data, do your own thinking by interpreting the charts and ratios in context with your understanding of the business etc. And it's free for individual/private investors.


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## watchdog11

luutzu said:


> ...
> 
> And here's my shameless self-promotion... if you don't have the time or patience, or experience, to calculate all the ratios you need to look into for each company, use my app: ...



Hi Luu Dang 
Does this forum allow self promotion/advertising? Perhaps I should have a go too... LOL


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## luutzu

watchdog11 said:


> Hi Luu Dang
> Does this forum allow self promotion/advertising? Perhaps I should have a go too... LOL




Well, given the stuff I wrote and the insults I've flung around on the forum... it's pretty hard to define whether it's advertising or not. 

So on that technicality, Joe will probably not ban me. That and I have made him about $1 all these years in ad revenue.


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## watchdog11

luutzu said:


> Well, given the stuff I wrote and the insults I've flung around on the forum... it's pretty hard to define whether it's advertising or not.
> 
> So on that technicality, Joe will probably not ban me. That and I have made him about $1 all these years in ad revenue.



I like your sense of humour!


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