Where are the original ideas?

[oddballstocks]

Seems like the board has become a stomping ground for people to discuss the same five stocks ad-naseum.  When I first started coming here I was impressed with some of the unique ideas people would toss out there.  It seems this has decreased recently.

 

I'm wondering out loud what the reason is, are there no good stocks anymore, or have the posters who used to post that stuff left?

 

I'd love to see original ideas not piggy back ideas from well known investors. 

 

I'll start off with a company I purchased recently that I really like: Precia Molen (PREC.PR)

[Sportgamma]

Hi Oddball,

 

I looked at Precia the other day. Seems like a great company a with decent moat (razor blade, switching costs), not so sure about the price though.

[PlanMaestro]

For the sake of debate, why look for golden needles in the haystack when large nuggets are on plain sight?

 

There has been some steady flow of ideas. The ones I've been involved in the discussion: Tarp warrants, ZION/WT, HIG/WT, CRBC, CTZ/A, GKK, GKK/A, CT, WIBC, RIMM, FIGI (struggling), ABH. But you have to say, large caps American and European are appetizing and there is always time to find good small caps.

[alwaysinvert]

I never really came on here for the stock ideas since I'm not really in the markets that most investors here are, but I also find it mind-boggling that the focus is on mega caps to such a hugh extent.

 

Maybe people are covering new ground more than I realize but keeping most of it to themselves?

[oddballstocks]

For the sake of debate, why look for golden needles in the haystack when large nuggets are on plain sight?

 

The problem is you need a PhD in Geology to tell if the large nuggets are real or not.  For the person of average intelligence such as myself I can spot golden needles easily, but I can't tell if I'm looking at a large nugget or a gold painted rock.  Plan you happen to have that PhD in Geology.  I love reading your thoughts on these things, but I could never invest myself, way too complicated. 

 

Sportgamma - I'm hopeful Precia will move lower, but buying a decent business like they are at 1x or .9x BV seems like a good bet.  I'd love for them to crash and pick up shares in the €30-€40 range, but it's unlikely.

 

Alwaysinvert - I've come to a similar conclusion hence this thread.  I think for most professionals on the board assets limit them to large caps.  And maybe individuals feel more comfortable with large caps?  Maybe people just keep their best ideas to themselves.

[racemize]

For the sake of debate, why look for golden needles in the haystack when large nuggets are on plain sight?

 

There has been some steady flow of ideas. The ones I've been involved in the discussion: Tarp warrants, ZION/WT, HIG/WT, CRBC, CTZ/A, GKK, GKK/A, CT, WIBC, RIMM, FIGI (struggling), ABH. But you have to say, large caps American and European are appetizing and there is always time to find good small caps.

 

+1, I think a lot of us aren't digging in the weeds as we've found a lot in the large caps.  If I had more money to invest now, I'd put it into stocks I already own that are still cheap.  While many of these are not easy to analyze in detail, the prices are so cheap that you can be extremely conservative on estimations and still get a large margin of safety (at least that's my view). 

[enoch01]

I think for most professionals on the board assets limit them to large caps.  And maybe individuals feel more comfortable with large caps?  Maybe people just keep their best ideas to themselves.

 

Sometimes (most times?) mispricings are a function of the security's obscurity.  Sometimes they are due to complexity.  And sometimes mispricings are due to irrational fears of market participants.  I'm sure there are other reasons.  I don't care - I just want to be on the lookout for mispricings.  About 18 months ago I owned a lot of off-the-beaten path small caps.  Now I don't.

 

Don't want to make it sound like I'm bashing the thread - I enjoy your contributions.

[Packer16]

There are some interesting small caps that are getting cheaper like SALM, SGA, TVL, MGAM, VSH and AIQ.  EMMS is approaching fair value.  However, when you get firms like BAC and SD selling for attractive prices with similar quality firms selling at premium prices I think the focus should be on these names.  The discussion on the smaller firms has declined however.

 

Packer

[Liberty]

Being a "find a few stocks I really like and hold them for a long time" kind of investor (Claude Shannon style, if you will), I don't have that many original ideas that I consider good enough to post here. I def. want to post more ideas, but I have to find them first.

 

One thing that I think more of us could do is update existing threads. The Investment board has so many great ideas, but some of them have fallen to page 5 despite being as attractive (or more) as the stuff on page 1. Sometimes, out of sight, out of mind..

[WarrenWatsa]

However, when you get firms like BAC and SD selling for attractive prices with similar quality firms selling at premium prices I think the focus should be on these names.  The discussion on the smaller firms has declined however.

 

This.

 

We're in an unusual environment right now. The broader stock market is fair-to-expensive, but, there are many stocks still that are quite cheap and not far from their lowest valuations in, say, the past 20 years at least. This includes well-known companies known to everyone, such as Berkshire and Goldman Sachs, for example.

[WarrenWatsa]

One thing that I think more of us could do is update existing threads. The Investment board has so many great ideas, but some of them have fallen to page 5 despite being as attractive (or more) as the stuff on page 1.

 

Maybe Sanjeev could make it so that more threads are shown on one page than already are, so that one doesn't need to click to the next page as often as currently.

[turar]

One thing that I think more of us could do is update existing threads. The Investment board has so many great ideas, but some of them have fallen to page 5 despite being as attractive (or more) as the stuff on page 1.

 

Maybe Sanjeev could make it so that more threads are shown on one page than already are, so that one doesn't need to click to the next page as often as currently.

 

You can change it yourself under your profile options: http://www.cornerofberkshireandfairfax.ca/forum/profile/?area=theme

[Liberty]

You can change it yourself under your profile options: http://www.cornerofberkshireandfairfax.ca/forum/profile/?area=theme

 

I'm already set to the max, which is 50 topics. I wonder if there's an easy way to set it so that the max is higher (100 would be good).

[mranski]

thanks, i found the number of messages too short also.

i'll try the 50.

 

 

[WarrenWatsa]

One thing that I think more of us could do is update existing threads. The Investment board has so many great ideas, but some of them have fallen to page 5 despite being as attractive (or more) as the stuff on page 1.

 

Maybe Sanjeev could make it so that more threads are shown on one page than already are, so that one doesn't need to click to the next page as often as currently.

 

You can change it yourself under your profile options: http://www.cornerofberkshireandfairfax.ca/forum/profile/?area=theme

 

 

Thanks.

Didn't know that.

[Rabbitisrich]

The trend towards larger companies probably accompanies a trend towards financials and O&G discussion. These are areas where everyone is looking at similar information, but the subjective weightings are so different. Blame "macro-tourism".

 

 

 

[Shane]

I honestly don't see a need to look at microcaps right now, world class businesses were available a year ago at great prices and I filled up.  I've sold some off but am still focusing on world class businesses because I pray they will get cheaper again.

[Parsad]

Hi Guys,

 

Some comments on the questions:

 

- In regards to the ideas...they tend to go through periods where there is less discussion and then more...so you do go through periods of less analysis. 

 

- There are quite a few ideas on the "Investment Ideas" board.  The whole idea is to get people to go through there, and then they may notice that some idea from a long time ago is suddenly cheap, and they have past analysis and comments to use as a historical guideline...ideally, anyways...and then that person tends to bring the subject back to the front because it becomes active again! 

 

- Small cap ideas tend to dissipate a bit when larger caps are cheaper.  As markets move up and prices increase, people have to dig around for cheap stocks and they start looking at small caps again. 

 

- The only way to adjust the number of threads and messages you see is from your own profile settings, and the maximum is 50 visible at anytime. 

 

Lastly, asking where the original ideas are, because you want some ideas, is like someone asking "Where's my birthday cake, because it's my birthday?"  You only get out what you put in!  Throw an idea into the ring, and you'll find that others will throw an idea out as well, or at least get the discussion going in the right direction.  Cheers!

[PlanMaestro]

The problem is you need a PhD in Geology to tell if the large nuggets are real or not.  For the person of average intelligence such as myself I can spot golden needles easily, but I can't tell if I'm looking at a large nugget or a gold painted rock. 

 

Point taken in financials oddball. There are other cheap sectors though. Hey, we have all kind of people in this forum to help. Just the other day I leaned that potash was positively charged and was not so easy to wash out. Wow.

 

OK, one SME idea to look at. Ancestry ACOM. I found it in Zeke's port and the numbers look great. I was only stopped in my tracks after the following post: http://www.portfolio14.com/2012/04/i-am-still-easiest-person-to-fool.html. Anyone else following it?

[oddballstocks]

Hi Guys,

 

Some comments on the questions:

 

- In regards to the ideas...they tend to go through periods where there is less discussion and then more...so you do go through periods of less analysis. 

 

- There are quite a few ideas on the "Investment Ideas" board.  The whole idea is to get people to go through there, and then they may notice that some idea from a long time ago is suddenly cheap, and they have past analysis and comments to use as a historical guideline...ideally, anyways...and then that person tends to bring the subject back to the front because it becomes active again! 

 

- Small cap ideas tend to dissipate a bit when larger caps are cheaper.  As markets move up and prices increase, people have to dig around for cheap stocks and they start looking at small caps again. 

 

- The only way to adjust the number of threads and messages you see is from your own profile settings, and the maximum is 50 visible at anytime. 

 

Lastly, asking where the original ideas are, because you want some ideas, is like someone asking "Where's my birthday cake, because it's my birthday?"  You only get out what you put in!  Throw an idea into the ring, and you'll find that others will throw an idea out as well, or at least get the discussion going in the right direction.  Cheers!

 

Makes sense that it would go in waves with periods of lots of analysis verses a period like now where there's little broad analysis but a lot more deep analysis.

 

I guess you're calling me out for creating this thread where it appears I'm fishing for ideas, I'm not, I was wondering why there was so much of the same around here.  I have no problems generating my own ideas, I write a blog where I churn out a few ideas a week.  My hope here was that I'd get some good feedback from other investors on ideas I posted.  I've posted a half dozen in their own thread, most have one response with something like "thanks".  Not exactly the constructive criticism I was looking for.  I've probably posted a dozen more inside other threads.  Maybe people aren't familiar with what I look at which might be the case.  It's just hard to keep posting ideas here when there is a tepid or no response.

 

Thanks for the responses everyone.

[oddballstocks]

The problem is you need a PhD in Geology to tell if the large nuggets are real or not.  For the person of average intelligence such as myself I can spot golden needles easily, but I can't tell if I'm looking at a large nugget or a gold painted rock. 

 

Point taken in financials oddball. There are other cheap sectors though. Hey, we have all kind of people in this forum to help. Just the other day I leaned that potash was positively charged and was not so easy to wash out. Wow.

 

OK, one SME idea to look at. Ancestry ACOM. I found it in Zeke's port and the numbers look great. I was only stopped in my tracks after the following post: http://www.portfolio14.com/2012/04/i-am-still-easiest-person-to-fool.html. Anyone else following it?

 

I had seen Ancestry in the past and saw John's post at portfolio14 as well, that was enough for me to move on too.

 

I'm actually not opposed to financials, I enjoy looking at smaller community banks, but the complexity factor is much lower obviously.

[mikazo]

Something I've been amazed at since joining the forum is the volume of ideas. I've personally decided to live by "invest in what you know", and that limits me to around 10-15 large-cap stocks. Do people around here all have huge circles of competence or they just don't live by the same rule I do?

 

As for posting ideas, I've mostly kept mine to myself and just creeped the forums :)

[Liberty]

I have no problems generating my own ideas, I write a blog where I churn out a few ideas a week.  My hope here was that I'd get some good feedback from other investors on ideas I posted.  I've posted a half dozen in their own thread, most have one response with something like "thanks".  Not exactly the constructive criticism I was looking for.  I've probably posted a dozen more inside other threads.  Maybe people aren't familiar with what I look at which might be the case.  It's just hard to keep posting ideas here when there is a tepid or no response

 

This is always something I feel kind of bad about. Sometimes people post an idea and I'm really happy to see a new idea, and I check it out, but it doesn't quite get through my first line of filters so I never research it quite deeply enough to have something to say about it.

 

So on one hand I wish I could post and start a conversation and make it clear that I really appreciate people posting ideas and encourage more, but on the other, I can't really motivate myself to look deeply into things that I don't feel are what I'm looking for.

 

I wish I had a way out of this dilemma. Maybe I just need to start reading more about stuff that doesn't appeal to me just to get more exposure to a variety of things and build up more experience researching companies... That sounds very good in the abstract, but in practice, I find it tough...

[Parsad]

I have no problems generating my own ideas, I write a blog where I churn out a few ideas a week.  My hope here was that I'd get some good feedback from other investors on ideas I posted.  I've posted a half dozen in their own thread, most have one response with something like "thanks".  Not exactly the constructive criticism I was looking for.  I've probably posted a dozen more inside other threads.  Maybe people aren't familiar with what I look at which might be the case.  It's just hard to keep posting ideas here when there is a tepid or no response

 

This is always something I feel kind of bad about. Sometimes people post an idea and I'm really happy to see a new idea, and I check it out, but it doesn't quite get through my first line of filters so I never research it quite deeply enough to have something to say about it.

 

So on one hand I wish I could post and start a conversation and make it clear that I really appreciate people posting ideas and encourage more, but on the other, I can't really motivate myself to look deeply into things that I don't feel are what I'm looking for.

 

I wish I had a way out of this dilemma. Maybe I just need to start reading more about stuff that doesn't appeal to me just to get more exposure to a variety of things and build up more experience researching companies... That sounds very good in the abstract, but in practice, I find it tough...

 

You only need 20 punches in your punchcard Liberty, so I wouldn't really change anything.  I find that most investors, including those that believe they have a very wide circle of competence, tend to ignore the most obvious investments that are 3 foot hurdles, and chase after 9-10 foot hurdles because they think no one is looking at them. 

 

BAC at $5 was staring everyone in the face, yet very few investors swung.  You had guys like Paulsen selling all of it and buying gold!  It was the same way with Steak'n Shake below $5...and same thing with FFH below $80.  People ask for ideas, but I find that virtually no one swings at them when fears are the greatest.  People can generate tons of ideas here, original or otherwise, but what is the point?  You aren't going to buy all of them.  In fact, anyone with any sense wouldn't even buy 10 of them!

 

I get so many white papers from people.  Very in-depth analysis of various ideas.  It's incredibly commendable work in virtually every circumstance...voluminous, detailed, technical with very expansive anecdotes about moats, competitors, etc.  But I have yet to read one that explains to me in simple terms why something is a good idea.  None have ever been 3-foot hurdles!  ;D  It's one of the reasons I personally can't stand white papers or analyst reports, but I will read them and provide feedback if someone asks.  When I look at something, the first thing I go to straight away is the balance sheet.  I don't like it, it goes in the garbage.  That filter, or perhaps bias, is built in and I can't turn it off.  But it works!

 

So don't change your methods if they work...plain and simple!  I've found that nothing is original.  It's all been done before.  Cheers! 

[StubbleJumper]

BAC at $5 was staring everyone in the face, yet very few investors swung.  You had guys like Paulsen selling all of it and buying gold!  It was the same way with Steak'n Shake below $5...and same thing with FFH below $80.  People ask for ideas, but I find that virtually no one swings at them when fears are the greatest.  People can generate tons of ideas here, original or otherwise, but what is the point?  You aren't going to buy all of them.  In fact, anyone with any sense wouldn't even buy 10 of them!

 

 

Sanj,

 

Good observation.  There's little reason to seek out thinly traded or obscure securities when there are cheap behemoths staring right at us.  Not only could people have swung at BAC when it was $5, it's still <$7 over the past week.

 

FFH was kind of like that too.  It lingered at ridiculously cheap prices for quite some time.  No need to rush into a decision, as there is plenty of time to get comfortable before diving in!

 

SJ