Long Term Stock Ideas

[Triathlete]

At least 90-95% of the stocks on the ASX I would dismiss in seconds. Yes I let a couple of gems slip through with the big sieve but they tend to keep poking there nose back up if your not to stubborn to forgive yourself missing them the first pass.

The other 5-10ish % take a varying amount of time and the payback is not always immediate. But here's the thing, the knowledge always stays valuable and is scalable. Some companies I would have put hundreds of hours in over the years but patiently applying the knowledge eventually results in very high profit per hour.

Buffett has accrued 99% of his wealth since turning 50. Having scrapped a couple of bucks together and learned a little along the path, at 46 that statistic blows my freaking mind!!!

The knowledge of true wealth creation is hiding in plain sight. (actually its slightly obscured behind instant gratification and slightly to the right of a bit of hard work but clearly marked on the road less travelled)

Thanks Craft....I think that is the problem for most that want instant success we do not want to wait for the fruits of our labour....It gets harder the older we get...

Maybe the way around it is to run two portfolios .

1. Based on looking for those hidden gems that take many years to come to fruition and
2. Another portfolio where you are to trade in and out as required.

I see what you mean about Buffet and his wealth after 50......although if I had what he did at 50 that would
do me

 

[tech/a]

It's also very profitable.

I don't know and haven't seen it presented here or elsewhere as being any more profitable than Experienced Systems/discretionary traders using shorter or longer term strategies.I'm sure there are profitable traders using Fundamental Analysis but I've not seen Very Profitable.(Which is a relative statement)

I am not sure how its possible to invest if you dont understand the financial health of a business, but if you find it boring then I guess its hard.

Just like it is possible to analysis any data in any number of ways to bring about a long or short term positive result.
You don't have to use an exclusive form of analysis. Fundamental can be as wrong as any other analysis.

I do not mind being wrong....it is one of the ways I continue to increase my knowledge.....

Since their is new members always starting out in this investing field it may help to explain to all of us from our more experienced members of this forum how long it does take to analyse companies Fundamentally.

It would be great if we could get the opinions of all those that do undertake this type of analysis only so that those starting out can have an idea of what it takes....

Perhaps Know the past can expand a little on his selection process.

Just spent a week going through what I figured would be an awesome buy... put through an order last week but it never got to my price. It's now up by about 22% since I first noticed it some 3 weeks ago.

I find this interesting. If your investing longer term why would you "miss your price?"
Surely you'd buy at market---As a pro trader once said--"Don't be a dick for a tick'
In this case you missed out when you needn't have.

Buffett has accrued 99% of his wealth since turning 50. Having scrapped a couple of bucks together and learned a little along the path, at 46 that statistic blows my freaking mind!!!

I think this would be the case with most who have reached 50 with any form of success---not necessarily Buffets Success!
Money makes Money and creates opportunity. I and many of those I know at 50 + had the same experience.
They Had and Have Experience, Collateral, and Money in abundance---compared with 25-30.
Those in that position given the knowledge of HOW will/can grow financially exponentially.

Really any form of serious increase of wealth needs a great deal of luck.--Right Place Right time.
Then it needs LOTS of Money.
100% on $50K isn't a lot of money in the scheme of a lifetime.
25% (A seriously good return) isn't a lot on $100K
Take out Tax and have another look!

Compounding
Sure on paper year on year and you'll get ridiculous looking POTENTIAL figures.
In reality opportunity is often fleeting and serious return cannot be sustained.

Personally I think if you can see it as clear as day---like our friend above (22% in a week) you need to put as much as you can in front of it.
Not a time to be conservative.

Financial freedom is like any endeavour in life.
It takes time to become good at it.
There are many many ways to go about it.

Everyone sees a way over their lifetime but few
know how to take advantage of it.

Woulda Coulda Shoulda

 

[Klogg]

I don't know and haven't seen it presented here or elsewhere as being any more profitable than Experienced Systems/discretionary traders using shorter or longer term strategies.I'm sure there are profitable traders using Fundamental Analysis but I've not seen Very Profitable.(Which is a relative statement)

Well, I can't say I've compared the two in a lot of detail, but I don't know that it's a worthwhile comparison to make.
Those investing using FA principles can use the same technique and scale up. Furthermore, work done now can pay off for years at a time... It's not uncommon for someone to hold a company for 5 years and make 25% p.a.

From what I know (which is little, so please correct me if need be) TA has upper limits on the amount of capital you use. I guess that would depend on which securities/markets you're trading.

Just out of curiousity, what do you define as 'very profitable' using your methods? (Framed in terms of CAGR, after tax)

Really any form of serious increase of wealth needs a great deal of luck.--Right Place Right time.
Then it needs LOTS of Money.

Right place Right time is only the half of it. You need to have learnt enough, done enough work to identify the opportunity. And if you've been doing this consistently, you'll have lots of money for that particular opportunity.

 

[tech/a]

Very profitable is a return of over 20% particularly after tax.
But what I'm getting at is 20% on a Grand while very profitable for that Grand invested
wont have a life changing impact.

You need serious $$s to impact.

AND
Having lots of money available for an opportunity is also half of it.
You've actually got to do it.
I know many with plenty of $$s sit by in 1996-2008 and watch the
Housing boom go by.
They also watched Gold Rise from $250 to $1600 and more.
The AUD go from 50c to $1.03

The Bull run of 2000-2008
Short Oil.

There are many more.

 

[craft]

I don't know and haven't seen it presented here or elsewhere as being any more profitable than Experienced Systems/discretionary traders using shorter or longer term strategies.

The profitability of other approaches is none of my concern when I'm presenting the merits of investing. The comparison seems to always come from other quarters in the form of one upmanship. If you have better opportunities then by all means peruse them.

I'm sure there are profitable traders using Fundamental Analysis but I've not seen Very Profitable.(Which is a relative statement)

Not talking trading - talking investing. And yes Very Profitable is a relative statement - what do you consider Very Profitable. I consider the results documented in the SMSF Returns to meet the definition.

Just like it is possible to analysis any data in any number of ways to bring about a long or short term positive result.
You don't have to use an exclusive form of analysis. Fundamental can be as wrong as any other analysis.

No arguments from me I don't see anybody saying any different.

I think this would be the case with most who have reached 50 with any form of success---not necessarily Buffets Success!
Money makes Money and creates opportunity. I and many of those I know at 50 + had the same experience.
They Had and Have Experience, Collateral, and Money in abundance---compared with 25-30.
Those in that position given the knowledge of HOW will/can grow financially exponentially.

Yes money makes money - but how much money depends on the scalability of your opportunities within your area of acquired knowledge. This is where Fundamental Investing Knowledge starts paying out in spades.

Really any form of serious increase of wealth needs a great deal of luck.--Right Place Right time.

Its all luck in one form or another starting with which crutch you were snatched out of and in what country and whether what interest you is rewarded by society at the time you are kicking around the globe.

Then it needs LOTS of Money.
100% on $50K isn't a lot of money in the scheme of a lifetime.
25% (A seriously good return) isn't a lot on $100K
Take out Tax and have another look!

Compounding
Sure on paper year on year and you'll get ridiculous looking POTENTIAL figures.
In reality opportunity is often fleeting and serious return cannot be sustained.

Again this is where fundamental investing pays in spades.

99% after 50 requires a compound Growth rate of 14.06% for 35 Years. Its not the stretch created by the required return hurdle that is the limiting factor to becoming a Billionaire its the scalability transaction size and pool of opportunities.

Personally I think if you can see it as clear as day---like our friend above (22% in a week) you need to put as much as you can in front of it.
Not a time to be conservative.

Financial freedom is like any endeavour in life.
It takes time to become good at it.
There are many many ways to go about it.

Everyone sees a way over their lifetime but few
know how to take advantage of it.

Woulda Coulda Shoulda

Fundamental Investing is one of those ways hiding in plain sight for most people. That's all I'm trying to point out - the opportunity. If I keep doing what I'm doing which is easily managed enjoyable and scalable the highest probability if I don't die or stop is that I will become a Billionaire and If I can do it - Uneducated, wrong demographics blah Blah Blah - then it can't be too hard especially as the Master of it Buffett has laid out the blue print for anybody interested. - problem is you often have to go back after you have reached your own revelations to see he has already beaten you to your insights.

Woulda Coulda Shoulda - exactly.

 

[Klogg]

Very profitable is a return of over 20% particularly after tax.
But what I'm getting at is 20% on a Grand while very profitable for that Grand invested
wont have a life changing impact.

Using an FA approach, my CAGR since I began (I started 5 years and 1 month ago) is 29.4%. This includes open positions, but given the duration which I hold things, I'm not sure I should be excluding them...
That said, I've had a good run of late, so some mean reversion would not be unexpected. Lets revise it downward to adjust - say 23%.

(FWIW - results tracked with Sharesight, and includes any cash available for investment)

The best part is, I'm not particularly good at it. There are many here much better than me... Furthermore, this includes a whole bunch of mistakes that are particularly bad (as I had just started), so I am hopeful there's a lot of room for improvement.

As for the size of total capital, I'd much rather not discuss that in an open forum.


On a different note, craft mentioned this:

If its education content, most of my thoughts for what they are worth are in the Present Value of cash flows thread, SMSF returns and various stock codes, actually I've probably dribbled all over the place, but if you really want it all on a platter try Berkshire Hathaway Shareholder Letters.

If anyone is trying to learn these concepts, I would suggest taking a copy of the "Present value of discounted cash flows" thread and re-reading it until the concepts come naturally to you. I did this, some of it stuck, and I'm much better for it. Great content from great investors in there.

 

[galumay]

If anyone is trying to learn these concepts, I would suggest taking a copy of the "Present value of discounted cash flows" thread and re-reading it until the concepts come naturally to you. I did this, some of it stuck, and I'm much better for it. Great content from great investors in there.

Totally agree, craft's and other's contributions in that thread are invaluable. Its a thread I dive back into everynow and then when I am not actively reading elsewhere and I always find a little more sticks.

We are very lucky to have people like craft, klogg, skc, ktp, systematic, etc who are happy to share their knowledge, wisdom and insights.

 

[tech/a]

Using an FA approach, my CAGR since I began (I started 5 years and 1 month ago) is 29.4%. This includes open positions, but given the duration which I hold things, I'm not sure I should be excluding them...
That said, I've had a good run of late, so some mean reversion would not be unexpected. Lets revise it downward to adjust - say 23%.

(FWIW - results tracked with Sharesight, and includes any cash available for investment)

Its a good effort any profit is acceptable.
I should have qualified --- 20% in anyone year.

The best part is, I'm not particularly good at it. There are many here much better than me... Furthermore, this includes a whole bunch of mistakes that are particularly bad (as I had just started), so I am hopeful there's a lot of room for improvement.

I don't think your alone here.

As for the size of total capital, I'd much rather not discuss that in an open forum.

My comment was meant just as that.

On a different note, craft mentioned this:


If anyone is trying to learn these concepts, I would suggest taking a copy of the "Present value of discounted cash flows" thread and re-reading it until the concepts come naturally to you. I did this, some of it stuck, and I'm much better for it. Great content from great investors in there.

Ill have a look.

 

[Roller_1]

Fundamental Investing is one of those ways hiding in plain sight for most people. That's all I'm trying to point out - the opportunity. If I keep doing what I'm doing which is easily managed enjoyable and scalable the highest probability if I don't die or stop is that I will become a Billionaire and If I can do it - Uneducated, wrong demographics blah Blah Blah - then it can't be too hard especially as the Master of it Buffett has laid out the blue print for anybody interested. - problem is you often have to go back after you have reached your own revelations to see he has already beaten you to your insights.

Woulda Coulda Shoulda - exactly.

Did i miss read or miss something here?

 

[Klogg]

Did i miss read or miss something here?

I don't think so.

 

[KnowThePast]

It's been some months since we had a fundamental vs technical debate. I missed it about as much as food poisoning

It's pretty simple, like with everything else - pick something, get very good at it and you'll do well sooner or later.

 

[Triathlete]

Well, I can't say I've compared the two in a lot of detail, but I don't know that it's a worthwhile comparison to make.
Those investing using FA principles can use the same technique and scale up. Furthermore, work done now can pay off for years at a time... It's not uncommon for someone to hold a company for 5 years and make 25% p.a.

From what I know (which is little, so please correct me if need be) TA has upper limits on the amount of capital you use. I guess that would depend on which securities/markets you're trading.

Just out of curiousity, what do you define as 'very profitable' using your methods? (Framed in terms of CAGR, after tax)




Right place Right time is only the half of it. You need to have learnt enough, done enough work to identify the opportunity. And if you've been doing this consistently, you'll have lots of money for that particular opportunity.

Here is the thing...if you are trading short term then you may have a point in regards to the amount of capital you wish to use..again depends on what markets, liquidity etc

At the same time both you and I could select the same company to invest in as we can see a future going forward and am willing to take a longer term view so the only difference maybe as to when we may take an entry into the same stock.

For example you may have come up that the company represents good value at present so you take an entry....

Since I like to use TA for my entries at the same time I may concluded that the stock currently is on a Elliott wave 2
or EW 4 and so expect the stock to fall in price in the near future and so I will wait till the market tells me otherwise before continuing on its upward move....when I then decide to take my entry....Of course I may miss out on the first 10% of a move but as long as I can pick up the next 80% that is fine by me..

Same company just different views and entry and exits I guess.......

 

[tech/a]

It's been some months since we had a fundamental vs technical debate. I missed it about as much as food poisoning

It's pretty simple, like with everything else - pick something, get very good at it and you'll do well sooner or later.

Why is it that when F/A and T/A are mentioned in the same thread its looked at as T/A V F/A
Its analysis of data no matter which method is used.

Just as science looks at test data for cancer research there are 1000s of ways of looking for that one
set of data which shows something promising enough to follow.

Some pan out others don't.----in ALL forms of analysis.

Those investing using FA principles can use the same technique and scale up. Furthermore, work done now can pay off for years at a time... It's not uncommon for someone to hold a company for 5 years and make 25% p.a.

I don't know that is that common. Take a look at long term performance of Funds, very few ever have 25% p/a over 5 yrs.

From what I know (which is little, so please correct me if need be) TA has upper limits on the amount of capital you use. I guess that would depend on which securities/markets you're trading.

The only limit any analysis has is your Account size and what your willing to put up.

 

[Roller_1]

I don't think so.

It's good to have goals i guess...

I might have to reassess my long term goal of having a 7 figure account

 

[skc]

Fundamental Investing is one of those ways hiding in plain sight for most people. That's all I'm trying to point out - the opportunity. If I keep doing what I'm doing which is easily managed enjoyable and scalable the highest probability if I don't die or stop is that I will become a Billionaire and If I can do it - Uneducated, wrong demographics blah Blah Blah - then it can't be too hard especially as the Master of it Buffett has laid out the blue print for anybody interested. - problem is you often have to go back after you have reached your own revelations to see he has already beaten you to your insights.

I hope you get there mate... it'd be a great inspiration for the mass.

 

[tech/a]

Forget trading---Start singing

 

[CanOz]

For all we know Craft could be managing several million, even 10s of millions of his own funds. As he said, if he keeps doing it and can still achieve the CAGR its very possible. If he has 5m now, achieves 20% and keeps compounding, he could be a billionaire in 30 years or so.

If he has 10 million now, and achieves 25% then its less than 21 years...

 

[Miner]

Funny you should mention those, I have held CWY in SMSF since Jan 16 and BPT has come on to the radar tonight although it is a weekly signal so not complete until Fri night.

(click to expand)

Thanks Boggo for resounding my decision with your experience. I also have added BPT and gave me good return when it depressed. With oil scene having a bit change, as well as looking into your chart, I do continue to hold BPT as well.
It is a great forum indeed when we exchange our thoughts.
Watch LOM purely from speculative perspective. Diamonds are not for ever though !

 

[Roller_1]

For all we know Craft could be managing several million, even 10s of millions of his own funds. As he said, if he keeps doing it and can still achieve the CAGR its very possible. If he has 5m now, achieves 20% and keeps compounding, he could be a billionaire in 30 years or so.

If he has 10 million now, and achieves 25% then its less than 21 years...

That's true. The long term key to success is compounding!! The ASX might seem a little small at that size.

 

[craft]

For all we know Craft could be managing several million, even 10s of millions of his own funds. As he said, if he keeps doing it and can still achieve the CAGR its very possible. If he has 5m now, achieves 20% and keeps compounding, he could be a billionaire in 30 years or so.

If he has 10 million now, and achieves 25% then its less than 21 years...

That's true. The long term key to success is compounding!! The ASX might seem a little small at that size.

Nah I reckon The ASX would still be fine as an investor.

I have funds now beyond what I need to generate my desired income – so some pure risk capital that is free to do nothing but snowball. Taking that amount, my life expectance and using my hurdle rate as a projected return figure (which is less than half my actual return from the last 12 years) whack it into a FV equation and Billionaire Bobs your uncle.

Yep it sounds ridiculous, but math is math and its one potential possibility that needs to be prepared for. Failing to dream big enough and being mentally behind the eight ball as reality unfolds has presented me with some of my biggest challenges in the journey to date.

Making X amount of money is not a goal for me – But investing is just what I do – and I like to do it as well as I can and I doubt that I will ever stop – I think I got a problem!! I have set up a PAF and it has a minimum distribution requirement of 5% so if things get too out of hand I will just throw more into there earlier and that should put the hand brake on and keep me in my comfort zone.

I think in some ways it would be easier to lose the risk capital then blow the lights out. Both Scenarios need a lot of pre - thought. It’s easy to stay roughly within what you know but big Paradigm shift take (me at least) some getting used to.

So dream big guys (girls) and start preparing early – especially if you have the intellect, persistence and youth of people like VES, VSntchr, SKC etc. You just never know.