tag:blogger.com,1999:blog-2149523431587168680.post7401191130759209448..comments2024-01-16T00:12:23.220-05:00Comments on Oddball Stocks: More is better? How much information is really needed to invest?Nate Tobikhttp://www.blogger.com/profile/05660387777171986124noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-2149523431587168680.post-53790737089655365422013-01-22T06:52:30.826-05:002013-01-22T06:52:30.826-05:00One more thing to worry about: they told you what ...One more thing to worry about: they told you what book value was, and you deduced that book value was likely meaningful (consisting of cash or the like), but what if book value is mostly goodwill?Potatohttp://www.holypotato.netnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-73745393276034976742013-01-19T19:28:42.173-05:002013-01-19T19:28:42.173-05:00I own a total of $7.80, I have the equivelant of a...I own a total of $7.80, I have the equivelant of a Chipotle burrito invested in this company. I usually buy $10 or less total to establish myself as a shareholder, then call for the annual report. So this is academic in a sense, but also very interesting as well. Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-34034365217435494022013-01-19T17:33:28.194-05:002013-01-19T17:33:28.194-05:00You own $7.80 in total or per share? If it is $7....You own $7.80 in total or per share? If it is $7.80 a share, then this is all academic, but interesting nonetheless.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-53796169914160937372013-01-19T17:32:30.458-05:002013-01-19T17:32:30.458-05:00To continue with my Jan 18th, 4:03pm post, here is...To continue with my Jan 18th, 4:03pm post, here is what doesn't jive for me. This is what you wrote:<br /><br />I was told that competitors have purchased shares and sued for information which they used to figure out the company's pricing model. They then used this information against the company. Given this history I can understand the company's anxiety towards giving out an income statement. With this particular company I have a slight advantage, I have consulted in their industry, and am very familiar with the pricing formulas and pricing data. I don't know specifics to this company, but I know the industry is very commoditized, and their margins are in a tight band with other industry players I'm familiar with.<br /><br />If the company's margins are in a tight band with others, this means that they aren't really doing anything differently than competitors. But then, the company is telling you it doesn't want to provide information because they are afraid of competition finding out too much from the figures. <br /><br />First, the fact their margins are the same tells me this doesn't sound correct and second, I have seen hundreds of financial statements which don't provide much information beyond one line descriptions (revenue, COGS, SG&A, etc) where a competitor couldn't get any important enough information from to do anything with it. <br /><br />Also, we all know that accounting standards are very much up to the discretion of management on a bunch of assumptions, they could easily use those to mess around with the line items enough to make them useless to competitors but useful to you because of the audited status of the figures.<br /><br />This just doesn't add up.<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-3774410504838482412013-01-18T16:17:56.234-05:002013-01-18T16:17:56.234-05:00I mostly answered your questions in responses to l...I mostly answered your questions in responses to latter comments. When a company is as secretive as this one is it would be very difficult to monitor an investment. It would be nothing more than an intelligent speculation.<br /><br />I don't think I could ever get comfortable with management that was like this either. But at a certain point a price gets so cheap that I'm willing to hold my nose on management. For this company the price isn't anywhere near that. If it were I'd have to think long and hard about buying, while I have a general idea about their financial statements I'm not sure if I could invest without seeing them.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-33835526311387873682013-01-18T16:15:33.836-05:002013-01-18T16:15:33.836-05:00Thanks for the comment, I know that I'm entitl...Thanks for the comment, I know that I'm entitled to the report, but as you say management can work very hard against these things. In my discussions with the CFO I mentioned that I have the right to inspect the books, he pushed back, and for a company that isn't a slam dunk investment I'm ready to move on. I paid ~$8 to find this out, but it really isn't worth a further investment unless the price bottomed out.<br /><br />I agree with you that if management is out to take advantage of shareholders there isn't much that a minority shareholder can do short of incurring large legal expenses.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-83585925233058577392013-01-18T16:11:43.951-05:002013-01-18T16:11:43.951-05:00Thanks, as mentioned in the post I own $7.80 of th...Thanks, as mentioned in the post I own $7.80 of this stock, I consider that to be the cost of the information. I'm not that worried if I lose the $7.80 on this one, but I'm not going to be increasing my position either.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-26589089146431575812013-01-18T16:03:34.841-05:002013-01-18T16:03:34.841-05:00This is an unlisted stock (as he pointed out).
An...This is an unlisted stock (as he pointed out).<br /><br />Anyway, I think there are easier fish to go after out there that doesn't present the problem you have outlined. Too many question remaining unanswered, including a look at any of the financial statements.<br /><br />I hope it works out.<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-17492020252505075222013-01-18T11:10:30.709-05:002013-01-18T11:10:30.709-05:00Nate:
If this company is listed in the USA, as a ...Nate:<br /><br />If this company is listed in the USA, as a shareholder, you have a right to inspect the books. You have the right to annual reports.<br /><br />Now the management of the company may try and fight you, but it is a losing fight for them.<br /><br />I would also caution you that companies that try and maintain such levels of secrecy and shareholder hostility are frequently poor investments. The management of the company is most likely going to run it to THEIR benefit, not that of the shareholders. <br /><br />A management team that has the propensity to treat you unfairly is going to find a way to do it...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-42293695343320702512013-01-17T10:22:14.247-05:002013-01-17T10:22:14.247-05:00Interesting article Nate. While I understand that ...Interesting article Nate. While I understand that the company sounds very interesting and investible from the information you have been able to triangulate, isn't managements secrecy a major red flag? How would you monitor such an investment? How do you get comfortable with management when it wont even provide basic information like financials or even revenue to owners?<br /><br />Researching unlisted stocks is certainly fascinating and interesting.ABVhttp://abitofvalue.comnoreply@blogger.com