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

[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]

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.

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

It is very GUI.:

 

[skc]

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).

 

[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..

 

[tinhat]

It is very GUI.:

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

 

[odds-on]

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.

 

[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.

 

[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.

 

[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.

 

[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.

 

[FxTrader]

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.

 

[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...).

 

[VSntchr]

View attachment 58234

Offered without comment.

Pictures really do say MORE THAN WORDS!

 

[DeepState]

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.

 

[McLovin]

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.

 

[skc]

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).

 

[craft]

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)

 

[DeepState]

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.

 

[DeepState]

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.

 

[n00m]

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.