A2B - A2B Australia

[skc]

So what is the point of continuing this silly argument when

a. Technicians on this discussion aren't even using valid data to support their claims
b. Actual testing across large sample size shows comparable (if un-correlated) returns from either strategy
c. Trend and Valuation are only two of a myriad of factors (size, volatility, liquidity, momentum, value, etc) which affect the price of a stock and making the discussion an argument of the two just narrows the discussion down to a boring argument?

Well said, Sinner. It is a debate as old as the forum itself. The only sensible conclusion is simply that both methods work well in the right hands. Yet the only conclusion many people on this forum reach is that, one instance of failure in the wrong hand proves the method doesn't work.

 

[Julia]

Well said, Sinner. It is a debate as old as the forum itself. The only sensible conclusion is simply that both methods work well in the right hands. Yet the only conclusion many people on this forum reach is that, one instance of failure in the wrong hand proves the method doesn't work.

Can you expand on what actually constitutes 'the method' you're referring to here, skc?

 

[skc]

Can you expand on what actually constitutes 'the method' you're referring to here, skc?

Methods simply meant FA and TA. Other words I could have used include approaches, analysis techniques etc.

Is that what you are asking?

 

[bunyip]

So what is the point of continuing this silly argument

No point at all as far as I can see. In fact I wasn’t aware I was in an argument. I’ve simply stated my opinion based on what’s worked best for me in the past. I’ve tried value investing and haven’t been able to make it work very well. On the other hand I’ve had reasonable success in simply jumping aboard a trend and going for a ride until the trend fizzles out.
I have no problem with anyone using whatever method they find is profitable for them. If they can make value investing work, that’s great. Considering that many people get hammered in the market, I’m not going to argue with anyone who’s making money from whatever method.
I’ve argued with them in the past, but not any more. It’s not worth it.
That’s why I made the statement below in an earlier post.

We do whatever works for us. If someone is making money from a method that’s very different to mine, then good luck to him.

Profit is the name of the game - we should keep doing whatever we find profitable.
I say good on you if you can make money from value investing, good on you if you can make money from trend following, good on you if you can invest profitably by throwing darts at a stock page to make your selections.

 

[Julia]

Methods simply meant FA and TA. Other words I could have used include approaches, analysis techniques etc.

Is that what you are asking?

More or less. I'm just not aware of anyone completely dissing any single approach, i.e. saying that FA, Value Investing etc, never works, or similarly any kind of trending or more sophisticated TA is a failure. The closest to the latter is the suggestion that it is 'amusing'.

All I've seen happening here is the assertion that

(a) holding onto a complete dog is futile, and
(b) declining to sell, either to avoid a downturn, or to take reasonable profits, simply because of the tax implications is possibly short sighted.
So Cynical offered what seemed to me to be a pretty sensible compromise in this respect.

Bunyip above has pretty well summed up my thoughts. I'd have thought there is plenty of room for a variety of approaches without anyone feeling threatened.

All this is essentially aside from the proper discussion of the stock, so it's my suggestion that we consign the previous couple of pages to history, hopefully all having learned something about the dangers of miscommunication, and move on.

 

[Knobby22]

I said back in May that from a fundamental view CAB would drop in price and be a buy below $3.50.
The reason is the slow growth and the risk.

Risk is very hard to correlate so I am not surprised that other investors trying to price the company may have a higher or lower price. At present the market disagrees with me as we are still above the price I would accept.

 

[Ves]

Half year report looks pretty good to me. Cash flow conversion is really good & top line growth is starting to appear. Which is good because a lot of it falls to the bottom line. Balance sheet looks in especially good shape now that they've knocked off some of the debt.

Something that never seems to get mentioned in discussions of this company is the business / industry cycle and where we are currently. I believe the market, after adjusting for regulatory risk, is still pricing this one as if it's in a better part of the cycle and as if there won't be much improvement in the underlying business environment (or "ex-growth").

Cabcharge still has a fairly strong competitive advantage in the industry, and has tendrils all the way through it, and the core business requires very little capital to grow. Any uptick the economy will really benefit this business, and with high margins, profit will grow at a pretty good clip. They'll have plenty of cash flow generation to deal with whatever regulatory measures the governments of the day impose upon them.

 

[galumay]

Half year report looks pretty good to me.

Agreed, I dont mind that they cut the divvy a bit too, focus on the debt and put the money to use inside the business. Happy to see my patience being rewarded with this one!

 

[TikoMike]

So smartphone apps not affecting revenue like people thought? Who would of thunk it?

The only thing I'm upset about is they didn't buy back their own shares as I talked about in this thread previously

 

[ROE]

I still hold a fair chunk, my average is probably around $4 - $4.10
dividend still pretty damn good and look like it navigates the environment well.

I think the market overly pessimistic about it, due for a reprice hopefully.

CAB control fundamental structure that hard for apps to break in, head line fear is good but
when it come down to nitty gritty stuff, CAB has iron gripped on it that why I am not let it
go despite all the headlines..

 

[TikoMike]

I still hold a fair chunk, my average is probably around $4 - $4.10
dividend still pretty damn good and look like it navigates the environment well.

I think the market overly pessimistic about it, due for a reprice hopefully.

CAB control fundamental structure that hard for apps to break in, head line fear is good but
when it come down to nitty gritty stuff, CAB has iron gripped on it that why I am not let it
go despite all the headlines..

To be honest the media has been crying wolf far too often with CAB. I don't even know if Reg won that defamation case, don't know, don't care as it doesn't really affect the underlying business of CAB.

 

[ROE]

Here is why I stand by CAB.

for apps to make money and take serious earning away from CAB, they need some serious volume
and because the apps is not centralise and fragmented, everyone want to get into the space
thinking it easy money but once they get in they discovered upfront investment is expensive
and they cant get the volume.

They then fight one another for volume and no one end up making any money as they cant get the volume and CAB jab in every so often to make their life difficult and eventually someone will burned out.

Also Taxi is not something that everyone use often, it much easier for them to call 13
number and grab a cab rather fumble with apps and various other technology if they going to use it once or twice.

while all that is going on people forget that bus, eft solutions and taxi services and all other business CAB hold actually grow earning at a steady pace and contribute more and more to their bottom line each year.

I see CAB similar to Telstra a few years ago, everyone hate it, they price it for nothing
so if you happy to play the dividend game and wait for the return of the champion then CAB probably
fit well.

Remember when people focus on Telstra decline fix line earning and phone call but don't pay much attention to their mobile and data growing at double digit rate?...now mobile and data contribute decent chunk to their earnings.

 

[banco]

Cabcharge still has a fairly strong competitive advantage in the industry, and has tendrils all the way through it, and the core business requires very little capital to grow. Any uptick the economy will really benefit this business, and with high margins, profit will grow at a pretty good clip. They'll have plenty of cash flow generation to deal with whatever regulatory measures the governments of the day impose upon them.

Imposed on them? They thrive through the regulations imposed on others. They are one of the biggest rent seekers out there.

 

[TikoMike]

Here is why I stand by CAB.

for apps to make money and take serious earning away from CAB, they need some serious volume
and because the apps is not centralise and fragmented, everyone want to get into the space
thinking it easy money but once they get in they discovered upfront investment is expensive
and they cant get the volume.

They then fight one another for volume and no one end up making any money as they cant get the volume and CAB jab in every so often to make their life difficult and eventually someone will burned out.
.

I agree with what you say on volume however I don't agree that it's expensive. In fact the reason that low start up costs are required to get started in taxi apps is the reason why it will fail because of how easy it is to copy.

How many apps is the taxi driver going to have on his phone just to keep up with bookings so they don't miss each and every important booking? With so many apps to choose which app is best for the customer? What if the chosen app by the customer isn't able to get a booking, should they retry with the next app? Is the customer going to have 20 taxi apps on their phone? The customer might just simply say "f*** it, I'll just use my EFTPOS/credit card instead". The driver isn't going to deny someone using card because of that all important fare. This is why I had a laugh when Uber created a "corporate account" as an incentive to lure corporates away from simply giving a Cabcharge voucher to their employees.

 

[So_Cynical]

Here is why I stand by CAB.

for apps to make money and take serious earning away from CAB, they need some serious volume
and because the apps is not centralise and fragmented, everyone want to get into the space
thinking it easy money but once they get in they discovered upfront investment is expensive
and they cant get the volume.

They then fight one another for volume and no one end up making any money as they cant get the volume and CAB jab in every so often to make their life difficult and eventually someone will burned out.

Also Taxi is not something that everyone use often, it much easier for them to call 13
number and grab a cab rather fumble with apps and various other technology if they going to use it once or twice.

The kids today don't fumble with apps, its all a breeze and to easy, and the apps don't need big volume to be successful because they cost next to nothing to make and run...CAB cannot survive as is.

 

[TikoMike]

The kids today don't fumble with apps, its all a breeze and to easy, and the apps don't need big volume to be successful because they cost next to nothing to make and run...CAB cannot survive as is.

Yes you are correct. Kids not fumbling with apps will be the downfall of Cabcharge. Wish I realised this before investing my money.

 

[skc]

Here is why I stand by CAB.

for apps to make money and take serious earning away from CAB, they need some serious volume
and because the apps is not centralise and fragmented, everyone want to get into the space
thinking it easy money but once they get in they discovered upfront investment is expensive
and they cant get the volume.

They then fight one another for volume and no one end up making any money as they cant get the volume and CAB jab in every so often to make their life difficult and eventually someone will burned out.

Also Taxi is not something that everyone use often, it much easier for them to call 13
number and grab a cab rather fumble with apps and various other technology if they going to use it once or twice.

while all that is going on people forget that bus, eft solutions and taxi services and all other business CAB hold actually grow earning at a steady pace and contribute more and more to their bottom line each year.

I see CAB similar to Telstra a few years ago, everyone hate it, they price it for nothing
so if you happy to play the dividend game and wait for the return of the champion then CAB probably
fit well.

Remember when people focus on Telstra decline fix line earning and phone call but don't pay much attention to their mobile and data growing at double digit rate?...now mobile and data contribute decent chunk to their earnings.

Top post! Exemplary contrarian thinking. Changes my view on CAB a fair bit.

It was a good half year result. I bought on the open and closed on the finish, but I might actually consider this as part of a long term income portfolio.

 

[KnowThePast]

I have an opinion too!

I live in UK at the moment. Public transport here is much, much better and covers pretty much all of London, rather than selective areas as it is in Melbourne. Nevertheless, people use taxis very often. Sometimes, just for a short trip from the supermarket so they don't have to carry all the shopping. And they use apps/websites to find the cheapest deal. From that perspective, if that's where Aus taxi industry is heading, it doesn't look good.

But there are two things that are very different between the two markets:
- Cost. Due to low wages, I can get a taxi from supermarket to my house, about half a mile for ~£4.
- Parking/public transport. Because of effectiveness of public transport and scarcity/cost of parking, lots of people don't own cars. So they regularly need to use taxis. In Australia, non-availability of public transport forces people to own cars. And it is much more convenient to take short trips in your own car, rather than pay and organise a taxi.

Another thing to consider is that the new 5% surcharge rule did not come into effect until 1st February, so this half year result was not impacted by it.

Bus revenues are growing, which is great, but capital expenditure is much higher in that business and so is return on capital.

Just random thoughts. I am a holder, in at $4.03. And with the current numbers, the price would need to at least double before I consider selling.

 

[qldfrog]

the reason I would not invest a cent is that sooner or later "private cars" will come.
http://venturevillage.eu/uber-taxi-paris as one example,
They are doing a killing O/S in the last year and are a threat to the current cosy taxi (and cabcharge) business.
people will not need to know how to play with apps to use these, and they will allow bookings, etc
DYOR

 

[ROE]

the reason I would not invest a cent is that sooner or later "private cars" will come.
http://venturevillage.eu/uber-taxi-paris as one example,
They are doing a killing O/S in the last year and are a threat to the current cosy taxi (and cabcharge) business.
people will not need to know how to play with apps to use these, and they will allow bookings, etc
DYOR

They been around for a while can't do it in Australia due to law and regulation ...they can only play in luxury hire car market ... Different market play differently...

This is a grey area because insurance and stuff can be tricky, what if you use your car and have an accident, insurance won't pay as you run as a business and you not paying insurance business etc...

It sound easy but a mine field when you get Into legal stuff like accidents and public property damage..

I can say with 99% certainty this won't destroy cabcharge business it just ride along the side with cab like everyone else..

Another apps another player, they won't be the last there will be more coming ...Hailo, SideCar etc...
Everyone is in it, the best thing that happen to cab is fragmented market
People soon need to install 10 apps on their phone to get a ride