tag:blogger.com,1999:blog-2149523431587168680.post7781554992179218543..comments2024-01-16T00:12:23.220-05:00Comments on Oddball Stocks: Where's the risk?Nate Tobikhttp://www.blogger.com/profile/05660387777171986124noreply@blogger.comBlogger15125tag:blogger.com,1999:blog-2149523431587168680.post-16532702430425433312012-05-21T12:56:38.822-04:002012-05-21T12:56:38.822-04:00Nate, great post. I think this is very helpful as...Nate, great post. I think this is very helpful as a lot of analysts and bloggers either arm-chair quarterback or suffer serious survivorship bias in presenting outcomes. Understanding the thinking and process that go into an investment are vital. Ex ante analysis of outcomes is golden. Thanks for putting this up there. Studied mistakes are the seeds of true learning.Nick Gogertyhttp://www.gogerty.comnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-4626166136060693602012-05-15T14:50:16.299-04:002012-05-15T14:50:16.299-04:00Oh and I forgot to mention sometimes you hit big w...Oh and I forgot to mention sometimes you hit big winners when your thesis is completely incorrect as well.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-57418925687186914892012-05-15T14:48:37.030-04:002012-05-15T14:48:37.030-04:00Some of what you say about analyzing your "mi...Some of what you say about analyzing your "mistakes" is right -- sometimes you are wrong and there are things you missed. However, in other cases -- you just make a calculated bet and things go against you. For example, if someone offered to flip coins with you 10 times and were willing to pay you $1k every time it landed on heads, and you'd have to pay $500 every time it landed on tails you'd take that bet right? It's possible that after 10 flips you lose money, but it doesn't mean you made a bad bet. <br /><br />This is especially true if some investments are special situation investments involving legal outcomes such as GYRO or TIVO.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-75625690341248711332012-05-14T12:04:54.193-04:002012-05-14T12:04:54.193-04:00Great post Nate - publicly admitting mistakes is t...Great post Nate - publicly admitting mistakes is tough to do, but I'm sure you'll be a better investor by doing it.<br /><br />Tom LTom Lnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-84194912915731185082012-05-14T10:23:40.306-04:002012-05-14T10:23:40.306-04:00LC,
I'm not overly focused on the last year o...LC,<br /><br />I'm not overly focused on the last year or two's earnings. If you take the longer view the company has been growing earnings and book value solidly for the last decade. I think this is a longer term investment (a few years) so being patient is important.<br /><br />NateNate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-76494106263612044332012-05-14T09:25:14.233-04:002012-05-14T09:25:14.233-04:00Hanover Foods looks interesting, although their EP...Hanover Foods looks interesting, although their EPS has been steadily declining. How concerned are you by this trend?LCnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-84033860947000949952012-05-13T21:05:57.793-04:002012-05-13T21:05:57.793-04:00Nate,
You are doing what most investors won't...Nate,<br /><br />You are doing what most investors won't do-- confront their own mistakes. That puts you at least a step ahead.<br /><br />I am wondering if the subprime/MoStan debacle taught you anything about your macro econ circle of competence? And have you since taken a gander at the <a href="http://www.mises.org" rel="nofollow">Austrian school</a>?<br /><br />Most value investors poo-poo the value of understanding the macro picture because they're "buying businesses, not economies." But these investors also seem to be captured by the ignorant, fallacious economic viewpoint of Keynes. And then they step in Keynesian messes like the 2008-09 crash and wonder why they got their faces ripped off.<br /><br />So far, I haven't found a ton of explicit, direct ways to MAKE money by understanding the macro situation. But I have found numerous ways to avoid LOSING money by understanding it. Many value traps are connected to changing macro economic paradigms.Taylor Conanthttps://www.blogger.com/profile/18270678440957992085noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-72111236590840680122012-05-13T13:26:06.604-04:002012-05-13T13:26:06.604-04:00Really insightful question. I think the answer is...Really insightful question. I think the answer is they were bad because I underestimated the probability of something bad happening, and it did. In all the cases the potential liability that eventually sunk the investment was there from the start, it's just I overlooked it.<br /><br />Seahawk was a strange beast in that my actual thesis was proved correct. A competitor purchased the company's assets and liquidated them for scrap. I listened to the competitor's conf call a few months later and they realized close to the estimated value. So the thesis was right, it's just the company didn't have enough liquidity to get there.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-84347484616672663222012-05-13T13:23:52.020-04:002012-05-13T13:23:52.020-04:00Good question! I don't really have a highest ...Good question! I don't really have a highest conviction that I pile into. I of course like most of what I hold, otherwise I'd sell it. <br /><br />Given that I really like Precia Molen, Installux, Corticeira Amorim, Mastercard. I'm not happy with some of the recent developments for America Movil, but I'm still holding. As for net-net's I think my highest conviction is probably Hanover Foods, followed by some of the Japanese companies I have.<br /><br />Hope this helps, I believe I've written about most of the companies I've mentioned.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-78818584555137857152012-05-13T13:21:35.003-04:002012-05-13T13:21:35.003-04:00MMI,
I think looking at the downside is the easie...MMI,<br /><br />I think looking at the downside is the easiest and quickest way to approach a company. If you look at anything long enough you'll eventually convince yourself it's decent. More information doesn't always make better decisions!<br /><br />Since I found your blog I had sort of figured we invested similarly, it's good to have actual confirmation.<br /><br />I've done my worst when trying to short sell. I've only done options a few times, every time has been a miserable mistake. I decided it's not for me, I'm long only.<br /><br />NateNate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-56145167710055929512012-05-13T13:19:32.286-04:002012-05-13T13:19:32.286-04:00Thanks for the comment, as you state knowing yours...Thanks for the comment, as you state knowing yourself is probably the most important part of the investment process. Only invest when you're comfortable, you'll do very well.Nate Tobikhttps://www.blogger.com/profile/05660387777171986124noreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-32917214425370884062012-05-13T12:06:25.168-04:002012-05-13T12:06:25.168-04:00So to be clear, do you think they were bad investm...So to be clear, do you think they were bad investmennts because you estimated the probabilities (or the magnitude) of something bad happening wrong?<br /><br />Or did you think they were bad investments because something bad happened?<br /><br />There is quite big difference between the two.<br /><br />Do you have any situations where something bad happened to the investment but you still think the orginal idea of bet was good (ie. you estimated the probabilities correctly but "the coin just didn't land as you had hoped")?Epanoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-81760772921127986042012-05-13T09:32:49.385-04:002012-05-13T09:32:49.385-04:00Terrific post Nate. I'm curious out of all you...Terrific post Nate. I'm curious out of all your 38 positions, what would you say are your highest conviction holdings?LCnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-32034216608637484272012-05-13T05:59:39.549-04:002012-05-13T05:59:39.549-04:00Hi Nate,
interesting to see how your portfolio ma...Hi Nate,<br /><br />interesting to see how your portfolio managment style exactly mirrors what i try to do.<br /><br />For some reasonwhen selecting stocks I always start with the downside which sometimes makes it hard to really to see and appreciate the upside.<br /><br />On the other hand, a stronger focus on the downside sometimes results in identifying potential short ideas as well.<br /><br />mmimemyselfandi007http://valueandopportunity.comnoreply@blogger.comtag:blogger.com,1999:blog-2149523431587168680.post-28699791202120993452012-05-13T00:30:24.630-04:002012-05-13T00:30:24.630-04:00I just want to say that this post has been useful ...I just want to say that this post has been useful to me. I've been doing a lot of learning, reading and experimenting with investing over the past 2 years, and I'm just now coming to a point where I can feel confident about my choices when I decide to buy a stock. I've finally started evaluating stocks in terms of their fundamentals instead of their technicals or price history. If I disregard all my previous stock purchases as silly decisions or learning experiences, I've only made one truly informed purchase so far, and I would call it a Buffett-style purchase, investing in a franchise that can compound value. What I've been considering lately is whether to start learning about turnaround situations so that I could try my hand at those, but some little voice in the back of my head kept telling me that it wouldn't be something I'd be comfortable with.<br /><br />After reading through your post, that voice has come to the forefront and I've decided that turnaround investing is not for me. Thank you for helping me realize that without having to take any losses by learning the hard way. As for your description of your investing process, it sounds like you give more and more recognition to what you are or aren't comfortable with, so congrats. That's one of the most important parts of choosing an investing strategy that fits yourself.Mikazohttps://www.blogger.com/profile/02248101760142904816noreply@blogger.com