Insightful Insights
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The irrational “Mr Market”
Ben MacNevin
March 20, 2013
Charlie Munger is one the most influential investors in the world today. As a founding partner of Berkshire Hathaway with Warren Buffett, Munger is known for his ability to logically process a number of steps in quick succession by employing about 90 relatively simple mental ‘models’.
You may be interested in the link below – to a speech that Charlie Munger presented and in which he discusses many of these models. The speech is well worth a read if you seek to improve your ability to make logical investment decisions (indeed, many of our blog posts reference these models in some way).
continue…by Ben MacNevin Posted in Companies, Insightful Insights, Investing Education, Market Valuation.
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What is a game changer?
Roger Montgomery
March 20, 2013
Last night I received an unsolicited text message from Vodafone informing that Samsung had just released their Galaxy 4S. Vodafone cooed “it looks like a game changer”. Last week it was Dominos Pizza who insisted that new toppings (toppings others already had) and a square base (competitors already have those too) were ‘game changers’.
The noun Game Changer is being used a little too liberally at the moment, and lest it creep into our vernacular to such a degree that university students use it to describe skipping the train and catching the bus instead, I thought I’d attempt to use photographs to illustrate my understanding of game changers:-
continue…by Roger Montgomery Posted in Consumer discretionary, Insightful Insights, Technology & Telecommunications.
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US Unemployment hits a four year low
David Buckland
March 19, 2013
The number of Americans filing new claims for unemployment benefits declined as the US economy added 236,000 jobs in February 2013. The unemployment rate hit a four year low of 7.7 per cent.
While this is good news some commentators are pointing to two areas of concern. The participation rate, or percentage of the eligible population employed at 63.5 percent, is at a low for the current cycle. Meanwhile 47.7m Americans or 15 percent of the population are recipients of the Food Stamp Program, now known as the Supplemental Nutritional Assistance Program (SNAP). In Fiscal 2012 this came at a cost of US$74.6 billion.
continue…by David Buckland Posted in Economics, Insightful Insights.
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Wrestling with Resources
Tim Kelley
March 18, 2013
I noted with interest Anton Tagliaferro’s comments in today’s AFR, lamenting the apparent lack of shareholder focus shown by boards of directors in the resources and energy sectors. Reading these comments, it struck me that the boards of these companies are no doubt plagued by the same issues that confound value investors looking at these types of businesses.
As value investors, we aim to acquire an interest in a business when we can see that the value of the business is greater than the price we need to pay to own it. At Montgomery, we are concerned also with quality and a host of other factors, but let’s focus for the moment on value.
continue…by Tim Kelley Posted in Energy / Resources, Insightful Insights, Investing Education.
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Listen Up
Roger Montgomery
March 18, 2013
As you know we have long been short Iron Ore. That was clever! “…long been short…”?
Jokes aside, many investors are still buying mining and mining services companies. Their reasoning is that they have underperformed the financials and non resource cyclicals. The rationale is that because they have under performed it is time for them to catch up. Well as you know, I think that is a bit like entering a Formula 1 race with a billy kart and a couple of friends to give you a push. Just because the billy-kart has lost the last 1000 races doesn’t mean its time for it to win. An F1 car accelerates from zero to 150kmh in 1.4 seconds. No matter how hard your friends push, your billy cart simply isn’t going to match it.
continue…by Roger Montgomery Posted in Energy / Resources, Insightful Insights.
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The slow demise of Australian manufacturing?
David Buckland
March 15, 2013
In 1983, 19 per cent of the Australian workforce was in the manufacturing sector. This year, that figure stands at just 9 per cent.
This decline is a common trend across the western world.
So what’s happening to Australian manufacturing and where’s it going?
continue…by David Buckland Posted in Insightful Insights, Manufacturing.
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Chinese bubble on the brink…..
Roger Montgomery
March 13, 2013
Question to the world’s biggest property developer: Is there a bubble [In China]?
Answer: Yes of course.
Watch this video broadcast by CBS last week.
Watch here.
by Roger Montgomery Posted in Insightful Insights, Property.
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MEDIA
Back to all time highs
Roger Montgomery
March 12, 2013
In discussion with Ross Greenwood on Radio 2GB, Roger discusses how on a total-return basis the Australian stock market is back to pre-GFC levels, and also provides his insights on Silverlake resources. Listen here.
This program was broadcast 12 March 2013.
by Roger Montgomery Posted in Energy / Resources, Insightful Insights, Radio.
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Over-fed Felines
Ben MacNevin
March 12, 2013
Continuing on our CEO’s-get-paid-too-much-for-just-doing-their-job or Hey-they-didn’t-start-the-company-or-take-any-risk soap boxes, On 3 March, Switzerland conducted a referendum on executive remuneration which included some of the following proposals:
- The aggregate compensation of the board of directors will be subject to shareholders’ approval on an annual basis
- Severance payments and advance payments will be prohibited
- A violation of the rules will be subject to criminal sanctions
by Ben MacNevin Posted in Insightful Insights.
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Gamechanger?
Roger Montgomery
March 11, 2013
If you are fan of pizza – I am but only the home made variety I grew up with in inner northern Melbourne – you may have seen Domino’s Pizza promoting its “biggest announcement in twenty years”. The social media campaign caught our interest because the company made a $15.4 million net profit for the six months to December 2012 but enjoys a market capitalisation of $800 million. We wanted to know what their “game changer” was going to be. As one Facebook fan wondered, it could be GPS guided pizza missiles.
Dominos have done an amazing job of harnessing the internet and social media to radically change the fast food industry but this campaign backfired badly. Believe it or not, the “Gamechanger”/”biggest announcement in 20 years”, was the release of new toppings and rectangular pizza bases. In a press release at the weekend Dominos announced:
“In the biggest and tastiest announcement in Domino’s 20 year history, Domino’s Pizza have revealed their new Chef’s Best™ Range…
continue…by Roger Montgomery Posted in Consumer discretionary, Insightful Insights.
