I found a note in my NVT file whilst preparing the SMSF return to revisit this post in April 2022. Unfortunately, NVT has been bought out, facilitated by its founder and a few others. Those guys get to remain holders of the private company. I’m disappointed that the option for other shareholders to buy shares in the private company was removed in the second bid as I believe NVT best days lay ahead. The insiders know it, the market is too impatient and voted for the cash.
Fair to say most people lost interest/faith in NVT as could be seen later in the thread. Personally, I always saw it as a superior business and never saw anything other than business as normal. Business is not always easy and there are periods of consolidation and grind even with good businesses. I accumulated NVT not long after it listed, more during the time of the posts in this thread and more again 2017 & 2018.
I recall being accused of not giving examples when I posted here previously. It’s a bit hard when my investment time frame is longer than everybody is interested in. Any rate lets revisit NVT now it is no longer listed as an example based on the first day, I posted on NVT. (no cherry picking)
Remember the idea is to buy businesses for their cash flow. Buy right, hold tight.
I held NVT in accumulation mode within SMSF so have presented the after-tax cash flows accordingly.
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11.5% per annum after tax on that parcel for just buying right and doing nothing else strikes me as an acceptable return and an outperformance of the All ords accumulation index, especially given the risk of buyout prior to full investment potential realisation has occurred.
The best thing about investing for cashflow based on the business performance rather than reacting to price performance is the scalability. 11.5% after tax for 7.5 years turns each 1M into 2.3M Many of the parcels I held, especially the early ones did better and often significantly better than the example detailed. (time is the friend of a good business)
Ps. this is NVT's price chart since listing and is what a business with a sustainable competitive advantage looks like on a long-term chart. Lots of squiggles, as at times it invests for the future and at other times it reaps the benefits of those investments. The short sightedness of the market reacts to the near-term outcomes but long term the business manages to muddle its way on a north-east journey.
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Happy journey's - I hope you have all made your fortunes. Times have been great.