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?

 

[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?

 

[Tanaka]

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.

 

[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?

 

[The Trooper]

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.

 

[McLovin]

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?

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?

 

[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.

 

[McLovin]

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.

 

[craft]

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?

 

[So_Cynical]

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!

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.

 

[Tanaka]

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

 

[So_Cynical]

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.

 

[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.

 

[notabclearning]

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

 

[McLovin]

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.

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.

 

[The Trooper]

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.

 

[The Trooper]

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.

 

[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.

 

[Billyb]

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.

 

[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.