THE BORING INVESTMENT GREEN ROOM
Posted: November 16th, 2016, 7:50 pm
An Explanation
This thread is intended to act as a continuing-forum for those migrating across from The Motley Fool (TMF) board of TCFF.
It is not exclusive to those poor, lost, souls however; all are welcome! I just ask that you spend a few minutes reading the below to get a sense of what this particular little piece of the web is hoping to achieve.
Those who have an interest in the history may wish to review some of the posts on that board, whilst they remain available: http://boards.fool.co.uk/thecornishmans ... mendations
This ‘Best of…’ highlights-list will hopefully give a flavour of what we were trying to do. TCFF may not have been the busiest of boards on TMF but it did seem to earn a degree of respect for the tone and quality of its posts and I would hope we could continue that here.
However, whilst the past will hopefully act as prologue, it does remain the past. So the question is what, practically, does this new forum wish to achieve moving forward?
When TCFF was established we set out these goals:
Please lets try and stick to nice, civil, thoughtful, discussion based around the analysis of company's fundamentals. Not that I am suggesting this is the only approach to use, but for other methods there are other boards around the place.
That seems like a good point to continue from.
We didn’t know it when TCFF was established, at the turn of the millennium, but in retrospect it seems that board (as well as today’s investors), was destined to live through interesting times; a bear market & technology crash from 2000-2003, a major market recovery from 2003-2007 including a substantial resources boom, a financial crisis 2007-2009, the virtual elimination of interest rates & the advent of quantitative easing, the post 2009 recovery, the US Flash Crash and more recently a resources slump. All this in the context of a prolonged low-inflation environment and an ongoing bond bull market.
This is to say nothing of wars, terrorist attacks, elections, four Prime Ministers and no doubt many other events that I am neglecting to mention, which might well have seemed to be of almost overwhelming importance to investors as they were occurring. They usually did to me. But as Benjamin Graham once quoted ‘through chances various, through all vicissitudes, we make our way…’
In case you are wondering by now – and nobody would blame you - I mention all of this by way of context.
A recent review of TCFF whilst thinking how to respond to the announcement of the closure of the TMF boards suggested to me that one area where it had enjoyed unusual success was in identifying what have turned out to be some very profitable, but overlooked, investment propositions that have prospered despite these changing investment seasons. Companies such as; Churchill China, James Latham, Portmeirion, FW Thorpe, Linx Printing Tech, James Halstead, 4-Imprint, Broadcastle, Primary Health Properties, Carr’s Milling, Victoria, Lincat, Dewhurst, Vibroplant and Colefax. I think it is true to say that these were opportunities that were not getting a lot of attention on any other message boards at the time; not because there was anything wrong with them, nor because they didn't display some ‘value’ credentials, but more likely than not it was simply because their perceived outlooks were all relatively uninspiring when compared to other opportunities that were contemporaneously available, in what were considered more fashionable sectors at the time.
To sum it up, they seemed a bit dull. With the benefit of hindsight though, their performances have been anything but, when considered from a longer-term perspective. These investment tortoises have beaten many an apparent hare.
So that's the goal here. To consider candidates that might not look out of place amongst that list.
What doesn't pass the test: If the share price is leaping up by multiple percent day after day, that is probably not boring; if the investment proposition is based on a possible takeover, that is definitely not boring; if the company is very frequently being discussed on other bulletin boards, it is very unlikely to be boring. Macro-discussion, sector flag-waving, and technical analysis are far too complicated and exciting for here.
I am not trying to suggest that it’s impossible to make money out of propositions that fail this ‘boring’ test. Far from it. If you’ve found a method that works for you with these types of ideas then that’s terrific. I simply ask that you post messages about them someplace else. They are too racy for here and on this thread boring is good. We like boring.
We especially like ‘boring’ when it’s on sale. ‘Value’ strategies have been shown to work, on a portfolio basis, time and time again, so we do ask that any shares discussed here are displaying some signs of value; a low P/E ratio for instance when combined with reasonably consistent profitability; a healthy balance sheet with only moderate gearing; a respectable & historically reliable yield; strong cash flow are the kinds of things we would look for. I do not wish to set too stringent criteria for what constitutes ‘value,’ but there should be at least some please.
That's probably enough for now. Please do forgive the long introduction. The aim is simply to try and keep discussions here focused to the kind of thing that I know some people will be interested in. Thank you for your patience in getting this far.
One last thing, just as an FYI. Civility is another thing that we like, so I have asked anyone joining from TCFF to help act as moderators of the tone. I am sure they will do so with courtesy and a light-touch.
With that, it’s over to you…
TC
This thread is intended to act as a continuing-forum for those migrating across from The Motley Fool (TMF) board of TCFF.
It is not exclusive to those poor, lost, souls however; all are welcome! I just ask that you spend a few minutes reading the below to get a sense of what this particular little piece of the web is hoping to achieve.
Those who have an interest in the history may wish to review some of the posts on that board, whilst they remain available: http://boards.fool.co.uk/thecornishmans ... mendations
This ‘Best of…’ highlights-list will hopefully give a flavour of what we were trying to do. TCFF may not have been the busiest of boards on TMF but it did seem to earn a degree of respect for the tone and quality of its posts and I would hope we could continue that here.
However, whilst the past will hopefully act as prologue, it does remain the past. So the question is what, practically, does this new forum wish to achieve moving forward?
When TCFF was established we set out these goals:
Please lets try and stick to nice, civil, thoughtful, discussion based around the analysis of company's fundamentals. Not that I am suggesting this is the only approach to use, but for other methods there are other boards around the place.
That seems like a good point to continue from.
We didn’t know it when TCFF was established, at the turn of the millennium, but in retrospect it seems that board (as well as today’s investors), was destined to live through interesting times; a bear market & technology crash from 2000-2003, a major market recovery from 2003-2007 including a substantial resources boom, a financial crisis 2007-2009, the virtual elimination of interest rates & the advent of quantitative easing, the post 2009 recovery, the US Flash Crash and more recently a resources slump. All this in the context of a prolonged low-inflation environment and an ongoing bond bull market.
This is to say nothing of wars, terrorist attacks, elections, four Prime Ministers and no doubt many other events that I am neglecting to mention, which might well have seemed to be of almost overwhelming importance to investors as they were occurring. They usually did to me. But as Benjamin Graham once quoted ‘through chances various, through all vicissitudes, we make our way…’
In case you are wondering by now – and nobody would blame you - I mention all of this by way of context.
A recent review of TCFF whilst thinking how to respond to the announcement of the closure of the TMF boards suggested to me that one area where it had enjoyed unusual success was in identifying what have turned out to be some very profitable, but overlooked, investment propositions that have prospered despite these changing investment seasons. Companies such as; Churchill China, James Latham, Portmeirion, FW Thorpe, Linx Printing Tech, James Halstead, 4-Imprint, Broadcastle, Primary Health Properties, Carr’s Milling, Victoria, Lincat, Dewhurst, Vibroplant and Colefax. I think it is true to say that these were opportunities that were not getting a lot of attention on any other message boards at the time; not because there was anything wrong with them, nor because they didn't display some ‘value’ credentials, but more likely than not it was simply because their perceived outlooks were all relatively uninspiring when compared to other opportunities that were contemporaneously available, in what were considered more fashionable sectors at the time.
To sum it up, they seemed a bit dull. With the benefit of hindsight though, their performances have been anything but, when considered from a longer-term perspective. These investment tortoises have beaten many an apparent hare.
So that's the goal here. To consider candidates that might not look out of place amongst that list.
What doesn't pass the test: If the share price is leaping up by multiple percent day after day, that is probably not boring; if the investment proposition is based on a possible takeover, that is definitely not boring; if the company is very frequently being discussed on other bulletin boards, it is very unlikely to be boring. Macro-discussion, sector flag-waving, and technical analysis are far too complicated and exciting for here.
I am not trying to suggest that it’s impossible to make money out of propositions that fail this ‘boring’ test. Far from it. If you’ve found a method that works for you with these types of ideas then that’s terrific. I simply ask that you post messages about them someplace else. They are too racy for here and on this thread boring is good. We like boring.
We especially like ‘boring’ when it’s on sale. ‘Value’ strategies have been shown to work, on a portfolio basis, time and time again, so we do ask that any shares discussed here are displaying some signs of value; a low P/E ratio for instance when combined with reasonably consistent profitability; a healthy balance sheet with only moderate gearing; a respectable & historically reliable yield; strong cash flow are the kinds of things we would look for. I do not wish to set too stringent criteria for what constitutes ‘value,’ but there should be at least some please.
That's probably enough for now. Please do forgive the long introduction. The aim is simply to try and keep discussions here focused to the kind of thing that I know some people will be interested in. Thank you for your patience in getting this far.
One last thing, just as an FYI. Civility is another thing that we like, so I have asked anyone joining from TCFF to help act as moderators of the tone. I am sure they will do so with courtesy and a light-touch.
With that, it’s over to you…
TC