tag:blogger.com,1999:blog-2149523431587168680.post3715805402767967994..comments2024-01-16T00:12:23.220-05:00Comments on Oddball Stocks: How to become a better investorNate Tobikhttp://www.blogger.com/profile/05660387777171986124noreply@blogger.comBlogger20125tag:blogger.com,1999:blog-2149523431587168680.post-39138875463006262742014-02-02T17:48:44.448-05:002014-02-02T17:48:44.448-05:00Nice article. The nice thing about investing is t...Nice article. The nice thing about investing is that success can come from being opportunistic and opportunity typically comes in small packages (unless you get a panic like 2008) where you can focus on analyzing only a few situations versus many. This allows you to jump in with a few stocks at a time. I have found being selective (only swinging when the ball is just right) improves performance over time. However all stocks have faults and you just need to determine which one you can live with and which ones you cannot.<br /><br />PackerPackernoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-313091349404034812014-01-21T09:02:34.220-05:002014-01-21T09:02:34.220-05:00Simple yet effective.....I do enjoy the stuff you ...Simple yet effective.....I do enjoy the stuff you publish in your blog...Thanks a ton and do keep it up!<br /><br />Regards--SurenderAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-90130300330643880562014-01-20T09:41:16.499-05:002014-01-20T09:41:16.499-05:00You make some great points. A moat can disappear ...You make some great points. A moat can disappear quickly, although a moat investor might argue that Insyde never had a moat. If they had one then they would have been immune to competition. I disagree with that, I think any business has a weak point and is vulnerable at certain times.<br /><br />There are no perfect stocks, and sometimes perfect is the enemy of good. It can be a fools errand to search for the perfect stock, I'd rather buy a lot of good cheap stocks. When I was first looking for Japanese net-nets I had trouble because I'd be debating with myself on whether I'd rather buy one stock at 50% of NCAV and 5x earnings or another at 53% of NCAV and 6x earnings. Why decide, just buy both? Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-49492531041522149532014-01-20T09:37:52.226-05:002014-01-20T09:37:52.226-05:00Patrick,
I have sought out 'oddball' race...Patrick,<br /><br />I have sought out 'oddball' races in the past, I ran one last summer, pulled a rabbit out of the hat and came in fifth place. That was a complete surprise. I live in Western PA which is extremely hilly. On a five mile run it's not uncommon to gain 800-1000ft in elevation. There are no flat routes anywhere. What I try to do is run good times on routes like that, then enter races in Ohio (we have family that lives there) where it's flat and I have an advantage.<br /><br />Just like in investing I'm looking for an advantage running as well!Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-10428887662815478332014-01-19T11:48:07.082-05:002014-01-19T11:48:07.082-05:00Good article Nate. Just as a runner needs callus ...Good article Nate. Just as a runner needs callus himself by training at race pace, the investor needs to become inured to scalding losses. But I think the novice can achieve this via index funds. After reading some of the basic texts (e.g., Graham) he can advance to stockpicking.<br /><br />As an avid runner myself, soon to hit the 50-59 age group, I have some disheartening news for you. You still have to run some sick times to medal in most races, particularly in the 40-49 age group. Even 50+ may require a sub-20 5K to medal. Sometimes half the field is M40+, and a lot of them run every day and do speed work. Your best bet even before you become a master may be to enter a local race that is way off the radar, such as the Conduril 5K. Anonymoushttps://www.blogger.com/profile/07246163512550432961noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-51915575538444864952014-01-17T19:15:37.914-05:002014-01-17T19:15:37.914-05:00Few things I learn once I started investing is:
1...Few things I learn once I started investing is:<br /><br />1. How to handle conflict indicators.<br /><br />For most decent potential investments, I always have conflict indicators. A firm might have decent cash flow, <br />strong balance sheet, and consistent earning, but the inside ownership is low and executives' pay is high. What should I do in this situation? Another example is sometimes I find a company with a little bit more reputation and growth, as compared to the second company with less known products and lower growth. If the first company trades at 12 X TEV/E and the second company trades at 8 X TEV/E, which one should I invest? Or should I take a chance in making a very good investment as compares to waiting for an excellent one? Does the wait justify the reward?<br /><br />I spent a large portion of my time thinking about questions in the nature and determine what should I do. And I realize the perfect pitch analogy - firms that tick all the boxes (valuation, earning, balance sheet, cash flow, moat, low executive pay, high insider ownership, growth, large buybacks or dividends, low capex...etc) are indeed extremely rare, especially in a bull market. If I see one, I absolutely take a large position. <br /><br />2. Simple ideas are so much better than an intellectually elegant ones. <br /><br />I have came across a company, Insyde Software ( http://goo.gl/7lnhFN). It is a BIOS firmware developer. It seemed to be the perfect company in early 2012 - Growth in revenue, net profit, net margin, good niche and low capex. Intel was its major stockholder and collaborated heavily with Insyde to set standards in many platforms(notebooks, PC, servers) . It seemed like Insyde's moat was unbeatable.<br /><br />However, in 2012, Insyde's competitor Phoenix lowered its price and Insyde had to cut as well. At the same time, Intel also made investment in Phoenix to build a stronger relationship in R&D. Suddenly all of Insyde's moat crumbled and stock price plunged. <br /><br />I didn't invest in Insyde. During the time I was invest in simple ideas and loosely followed Insyde. Still, the downturn of Insyde shocked me and it shows how a moat(or at least my perception of it) can be undermined so fast. <br /><br />I think books are sometimes a little withdrawn and irrelevant. An investor definitely needs to step in to get a feel of the real game.楊大寶https://www.blogger.com/profile/04692847628587763718noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-54577015426909572352014-01-17T08:08:11.418-05:002014-01-17T08:08:11.418-05:00Thanks!Thanks!Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-64252626026616401872014-01-17T08:08:05.590-05:002014-01-17T08:08:05.590-05:00I like this statement, very simple, and very true....I like this statement, very simple, and very true.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-92214908103976932122014-01-17T08:07:52.886-05:002014-01-17T08:07:52.886-05:00Thanks!Thanks!Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-5828940259526572702014-01-17T08:07:44.073-05:002014-01-17T08:07:44.073-05:00I disagree, a baseline of knowledge is required fo...I disagree, a baseline of knowledge is required for sure, but not a background or training in Corporate Finance. If that requirement were true I'm merely just a gambler. Some of the greats like Walter Schloss were just gamblers as well.<br /><br />Clearly understanding accounting is of utmost importance. But not just accounting alone, if a mastery of accounting were all one needed a computer could be programed to be the best investors, just follow the accounting rules. There is a lot of thought and consideration that moves beyond raw accounting. I would say on average 30-40% of my time spent on an investment is thinking about the financials, the rest is on soft issues like risk, or whether the CEO is going to short change shareholders.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-82570987354998285902014-01-17T08:04:35.418-05:002014-01-17T08:04:35.418-05:00Thanks, interesting perspective regarding poker. ...Thanks, interesting perspective regarding poker. I think it's interesting how there are many different backgrounds that can be conducive to investing, not just the formal route many believe.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-39447792207595538752014-01-17T08:01:29.996-05:002014-01-17T08:01:29.996-05:00Thanks, I'm enjoying it while it lasts. I hav...Thanks, I'm enjoying it while it lasts. I have knee problems, but they're from biking, a supposedly zero impact activity. Running doesn't bother them at all, nor does skiing.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-36201500716987604122014-01-17T07:59:56.509-05:002014-01-17T07:59:56.509-05:00Yes, it works the same in investing, too much inve...Yes, it works the same in investing, too much investing (trading) can lead to bad results as well.<br /><br />I agree with you on the workouts, but I'd argue that you need to start investing before the knowledge can really pay off. Yes a base level of knowledge is required to get started, but maybe not as much as many people think. Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-24697716246229403442014-01-17T04:15:57.183-05:002014-01-17T04:15:57.183-05:00One difference to investing is that running has ad...One difference to investing is that running has adverse training effects if you run too much.<br />Aditionally more knowledge about running can make your training more efficient (e.g. combine interval training with longer runs, instead of "just" running. Knowledge is required to get better results.Martinhttps://www.blogger.com/profile/08749838473979475080noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-53840716824270985752014-01-16T15:41:35.133-05:002014-01-16T15:41:35.133-05:00Nate,
Consider yourself lucky in the running depar...Nate,<br />Consider yourself lucky in the running department. I ran 4:20s in high school and suffered knee problems throughout my later years. Keep up the good work. I totally agree with this. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-46591516585076713942014-01-16T12:27:42.084-05:002014-01-16T12:27:42.084-05:00Great post! I would add, before you start investin...Great post! I would add, before you start investing learn playing poker and understand it. Thats was a key eye opener for me that changed my way.fromminoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-44646001039813984082014-01-16T02:09:55.301-05:002014-01-16T02:09:55.301-05:00I think you miss a point that without significant ...I think you miss a point that without significant knowledge and training in Corporate Finance, most small time investors (and many large ones too) are just glorified gamblers. Without the ability to dissect financials and understand how to truly value a company, shouldn't they get that first? And/or just stick it in SPY and call it a day (and also never sell and thus never pay taxes). Akhttps://www.blogger.com/profile/09646479250565629294noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-76554889139419313852014-01-15T15:07:48.674-05:002014-01-15T15:07:48.674-05:00Much appreciated Nate, especially for someone like...Much appreciated Nate, especially for someone like me, who is at the starting line getting ready to invest but who is also afraid what it will be like once the starting gun goes offAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-38206907444455466912014-01-15T13:40:56.393-05:002014-01-15T13:40:56.393-05:00The road to wisdom? -- Well, it's plain and si...The road to wisdom? -- Well, it's plain and simple to express: Err and err and err again, but less and less and less.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-53152523747062868322014-01-15T12:17:07.807-05:002014-01-15T12:17:07.807-05:00Some great guidance here, as per usual. Thanks, N...Some great guidance here, as per usual. Thanks, Nate.Anonymousnoreply@blogger.com