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Reporting Season, Take 1 (Value.able TV: #1) – what do you think of WES and WOW Roger?

Talks

Reporting Season, Take 1 (Value.able TV: #1) – what do you think of WES and WOW Roger?

We did something new today. Rather than write a second blog post, I thought I’d record one.

We haven’t settled on a title for these next-generation posts just yet. What’s your suggestion? The most creative will receive a personally dedicated First Edition copy of Value.able, so put your thinking caps on. Click on the comments button to leave your suggestion. Comments are now closed. Roger’s decision is pending.

Back to the video… Looking at the numbers, Wesfarmers and Woolworths both appear to be doing a good job. But what will these businesses look like in 5, 10 or 20 years time?

With the sales growth gap between our big two supermarkets closing, what does the future hold? And come September, how will the board of WES counter-attack WOW’s entrance to the hardware-warehouse market?

Whilst the stock market is focused on reporting season and Coles’ apparent eroding of Woolworth’s market share, I’ll continue to focus on quality and value. If investing was all about market share, we’d all rush out and buy Qantas. But that wouldn’t be a sensible, or indeed Value.able, decision, would it?

Can’t watch the video on your iPhone or iPad? Visit youtube.com/rogerjmontgomery.

If you are yet to join the Graduate Class, click here to order your copy of Value.able immediately. Once you have 1. read Value.able and 2. changed some part of the way you think about the stock market, my team and I will be delighted to officially welcome you as a Graduate of the Class of 2011 (and invite you to become a founding member of our soon-to-be-released next-generation A1 service).

Posted by Roger Montgomery and his A1 team, fund managers and creators of the next-generation A1 service for stock market investors, 29 July 2011.

INVEST WITH MONTGOMERY

Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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266 Comments

  1. Greg
    :

    Hi Roger
    First time on the blog, read it all the time and love your work,
    What about simple V TV value.able TV
    Cheers
    Greg

  2. Todd
    :

    Whilst i agree with what you have said Roger in relation to both Wesfarmers and Woolworths, long term intrinsic values of both companies are under the very real threat of the introduction of discount supermarkets, Aldi and Costco both with very agressive expansion plans and in Aldi’s case no shareholders to answer to. We cant forget that both Coles and Woolworths have had a duopoly in Australia and foreign discount supermarkets will and have not only stolen market share but will put pressure on margins (some of which is being absorbed by suppliers short term).

    Other factors that may impact on returns are the lack of expansion points with market saturation in urban areas and long term leases and old restriction of trade leases (not allowing another chain store into the same centre) coming up for renewal with companies such as Westfields. Aldi have overcome this issue by purchasing and redeveloping their own sites, Costco open in Brisbane this year. Thanks Roger loved your book.

    • Roger Montgomery
      :

      Thats great stuff. I agree that there are indeed new competitive threats emerging. I do wonder however how many years we have to project forward to get to a point where the new kids on the blog (J) have anything like the footprints of the majors.

  4. Will
    :

    Hey Roger it might help if a few images of important parts of the financial reports appeared next to you while you deliver your verdict on them. Cheersgreat videos im learning a lot :

  5. Fraser
    :

    Roger
    In an ever increasing multi-channel communication eco-system I would keep it simple and retain either of your existing brands – Value.able or Roger Montgomery insights, what ever has most brand equity

    Whether its a written blog, podcast, video, mobile, facebook app, webinar, IPTV, tweet Google+ huddle and the next big thing in social media the message is the same its just a different the channel that you use.

  7. kim
    :

    how about “The Montgomery ReTort”, then you could invite Pete Switzer on and poke fun back at him from the driver’s seat.

  8. David Pope
    :

    Hi Roger,

    Here are a few more. My apologies to other posters if any of these names have already been mentioned:

    Montalogue
    View.Able
    Post.Able
    Stream.Able
    MontMedia
    Vidi.Post
    Value.View
    Media.ble
    Cast.Able
    Mont.View
    Value.Log

    Personally, I think “Vis.Able” (by Grover) and “Montcommentary” (by Emily) are the most interesting so far. As I recall, “Vis” is also the latin root for vision, so there is quite a bit of substance to that one. I also like “Value.View”.

    Thanks Roger,

    David

  9. Seamus Macdonald
    :

    Given the highly volatile world situation, appreciating currency, etc Isn’t this a good time to be out of the market?
    Intrinsic value is fine over the long haul but given the current threats isn’t it quite possible that another panic will ensue, which IS a great time to buy.
    Unemployment in US of 9.2% is what it was in 1936 when belt-tightening (as is about to happen again) took it back up over 12% until WWII intervened. This seems to me highly probable and won’t this have a highly negative effect on share prices?
    Really like to hear your thoughts on this Roger.

    • Roger Montgomery
      :

      Seamus, You can also miss a great deal waiting for a cheery consensus and I prefer not to trade what is known for that which is unknowable. When you say ” isn’t it quite possible that another panic will ensue” the answer is yes. It is possible. The real question is “is it probable?” The answer may be no. Of course I don’t know, so we head back to investing on the basis of what is known.

  11. Stuart
    :

    Hi Roger,

    Given the “elevated perspective” of your commentaries, how about:

    “The View from Mont Blog”?

    Stuart

  12. Ian de Gruchy
    :

    Hi Roger
    What an amazing response. Clearly Value.able features strongly – so going along with the theme how about The Valua.able Report.
    cheers
    Ian

  13. garry
    :

    Another valuable add on, many thanks Roger.
    As you have a coin on the cover of your book, how about
    My 2 cents worth.
    My 2 sense worth or
    Insider trading.

  14. Eileen Hetherington
    :

    Thank you again Roger, you very generously give freely of your time and knowledge. I wouldn’t change a thing about your presentation as I feel it is relaxed and comfortable and we as viewers can really relate to you, and love your jumper.
    My suggestion for the video segment is keep it simple Valu.able insights. Holding my breath waiting for the A1 service.

  15. Todd
    :

    Hi Roger
    first time blogger
    i would stick with the value.able brand comments by Brad17
    second prize……
    val.youtube.able ?
    value.tube.able ?
    valyoutube.able?
    Love the insights / blog
    Take care
    Todd

  16. Grant W
    :

    I’ve been away so have just caught up with your video and the comments today. I think that video is a great way of communicating and you got the message across very succinctly, I thought so well done and thank you, Roger. Also congratulations to all the “grads” old and new who have contributed to this post – some really good suggestions.

  17. Peter W
    :

    Hi Roger, I looked up the meaning of my suggestion and found, the following definition: “a person of unusually keen foresight”. Seems appropriate: “Vision.ary”

  18. Chris L
    :

    Having read Brad17’s comments on Branding I think I agree with him: we’re all being jolly witty, but stick to your barand, Roger.

    “Value.able xyz” where xyz = “Vision”, or “Video” or many of the other clever suggestions like “Talking Cents”.

    But keep the Value.able part front and centre.

  23. Irek
    :

    Hi Roger,

    I really like the idea of video brodcasting of your insights. As to the name of this new service I propose: Value.cast

    Thank you for your great service.
    Cheers,
    Irek

  24. Nolan
    :

    Roger,

    Video.ables comes immediately to mind.

    Nice to see you again since parting ways with Foxtel for a while. Good one.

  25. bruno
    :

    Hi Roger, there have been some excellent name suggestions so far! “talking cents” could be another one you may add to your long list? also a joke u may like (u may have heard this one before) what do u get when you burn down a woolies store? coals.

  26. Steven F
    :

    How about the video report be called “The Montgomogram” :-)

    Good work Roger, keep it up!

  27. Grant Duggan
    :

    Thank you Roger no matter what you throw my way is a benefit to my investing, this is what i call video value able version 1. Keep up the contributions and hard work it means a great deal to many of us. Thanks Grant

  30. Grover
    :

    The last thing you want is to draw in that feral element with poorly chosen youtube titles. ‘Roger’s Ramblings’? Completely incongruous, I’d be expecting someone like Switzer if I saw it in a search!

    I’ll put forward The Vis.able Series. Clean lines, no-nonsense, hint of a pun but nothing too jokey and hokey that’ll eventually start to grate.

  31. Raj
    :

    valueable.tv or valuable.vlog (video log) not as obviously witty as some others, but with regulation of domain names becoming less restricted to traditional (e.g: .com, .org) extensions, could be a good way to add to the existing web presence in way that’s consistent with your current well recognised model

  32. Michael Campbell
    :

    The Value.able Messenger.
    I liked your comments on supermarket war between coles and WOW’s
    How their share price and intrinsic value has changed over the years

    Keep the reports coming, there great!

  33. Brad 17
    :

    Hi Roger
    These comments from a brand marketer of 30+years experience – you have done an extremely good job in creating & managing the Roger Montgomery ‘ Value.able’ brand of value investing.
    You may own the legal rights to this brand – but it lives & breathes as a set of images & perceptions in the minds of those who have had contact with you & Value.able – lets call these consumer core values ( turn off market , margin of safety , sustainable competitive advantage etc. ).
    A strong brand has consistent & well understood core values that endure over time – a weaker brand has less consistency ie. it means different things to different people.
    Golden rule #1 : Don’t play with core values
    Golden Rule #2 : Don’t play with your brand name
    So when thinking of a title for ‘next generation posts , my counsel is to not deviate from Value.able in any way – thoughts of clever plays on Value.able that I have seen on the blog will only be dilutive to the strength of your brand.
    Perhaps borrow from ‘brand hierachy’ theory commonly applied to packaging design – couple the umbrella brand with lower level brand descriptors
    Ie Value.able text post versus Value.able video post
    Too simple? The best ideas usually are. Hope this helps with understanding of your brand Roger
    Brad 17

    • Roger Montgomery
      :

      Taking careful consideration of that now thanks to you Brad. Perhaps we will just keep it simple. Some of the ideas have been very entertaining and compelling.

    • Emily
      :

      Brad, is the umbrella brand his name or Value.Able? I actually think the former. If you are going with some sort of brand hierachy then the video should match the other lower level brand descriptor – “The Montgomery [Private] Fund”. So the videos would be “The Montgomery Video Report/Cast/Review”

  35. Sean Saul
    :

    My submissions:

    Education.Able (not grammatically correct, I know)
    Insight/s.Able
    Report.Able

    Interesting exercise, asking a whole heap of mostly left-brainers to enage the creative right side!

    Cheers

  36. MarkH
    :

    Hi Roger,

    Great format, keep up the great work. My thoughts are:

    – Like Nobody’s Business…
    – In Company..with Roger Montgomery
    – TaLking Stock
    – Argo Alert (argo, from jason and the argonauts) – with valuable, the vehicle you use to steer you to the ‘golden fleece’
    – Leading LIGHT (Latest Insights….Get Hot Targets)
    – The ABC on A1’s to C5’s

    Best of luck!

    Regards

    MarkH

      • Luke
        :

        Hi All,

        I like InCompany the most as well although there have been many excellent suggestions. I only just noticed this post and there are already 212 comments!

        I like the format of the video:

        – The length is about right since you should be able to get your point across in around 10 mins.
        – I liked your jumper, it makes you seem more down to earth, relaxed and casual so you can focus on the content rather than the way you look.
        – Today’s topic was very good and gives excellent insights. Although I already knew your general opinions on WES and WOW, it was educational to me just to hear about your latest analysis on them (note: I have never held either and don’t intend to unless there is a big MOS).
        – You did look a little nervous but I know how difficult it is to talk to an inanimate camera.

        Keep up the good work Roger, I look forward to your A1 service soon.

        Cheers,
        Luke

  37. Ray H
    :

    I especially like the concept of discussing company results and CEO interviews in the new format. Perhaps down the track you could also introduce Value.Able blog discussions about what questions we would pose to upcoming CEO guests? A great opportunity to really consider quality aspects of a business.

      • Ray H
        :

        Thanks Roger. I didn’t really envision the bloggers creating the list of questions for the interview – more a great way to get people thinking about what they might like to ask a CEO regarding quality aspects of the business, and a great education tool too because you get to see what others might like to ask.
        As for scaring off the CEO’s, I’m sure you could take the best question or two from the blog to lob into your interview, just to keep the CEO’s on their toes.

  39. john wilkinson
    :

    Hi Roger,
    First time post, long time watcher and member of the “hardback” Value.able grads. Think the video is a good idea but would also like a transcript if possible?
    One of the joys and invaluable products of this blog is an ability to build an archive of reference material. I find it beyond my bumbling techno powers to save video material and it would also create data storage issues in the long term, and we are all here for the long term, aren’t we Roger? My internet connection is also fairly dodgy and videos take ages to load.
    Still, all power to you for being tech savvy and 21st century. Reading this and watching this on a Sunday, might I be so bold as to offer the name of ” The Sermon from The Mont” ? Keep up the great work.
    John

  41. Roger Gibson
    :

    Call it MQR.

    Value-able followers will know what it means and new watchers will soon find out.

  42. Gavin
    :

    I like the videos, very “InformaTVe.”

    I wouldn’t worry too much about trying to tart it up – Keep it real and it will work. Light on packaging but heavy on substance – that’s value.

  46. Michael H
    :

    Hi Roger

    aud.able
    explain.able
    note.able
    review.able

    and once you have built up a reference library it can become “Roger’s Thesaurus”, lol

  47. Andrew
    :

    Some quick ones that come to mind:

    Roger Montgomery presents;
    The wonderful world of value;
    Tomorrows investor;
    Competitive Advantage;
    Advantage IV;
    Value.vision;
    IV Max

    Have a bit of a deeper thought over the weekend

    • Andrew
      :

      Thought i would expand on my choices:

      Roger Montgomery Presents: This could be interchangable with montinvest or Next Gen A1 presents. The brand is paramount and there for watching this video there is absolutley no confusion as to who it is and what it is about. It makes sure that the brand is at front and centre of these videos and allow the viewer to know where he needs to go if they want more products from you.

      The Wonderful World of Value: Your products are about one thing, value. Value is a wonderful thing, especially in investing. But there is more to finding or understanding value than just calculations, there is a whole world of information that helps identify value. Your posts are about more than just whether or not something is trading at a discount, they get into the world of what constitutes value so there for this title paints a picture of that and lets the viewer know that with a next gen a1 video blog post you will be getting some deeper insights instead of the usual buy, sell or hold information.

      Tomorrows Investor: We are investors, and your service is next gen. Next gen=future, future=tomorrow. So your blogs and online service are helping shape the investors of tomorrow.

      Competitive Advantage or Advantage IV: Your service is by accounts the next generation and something people would use and wonder where they were without it. This means that people reading your blogs and in particular using your next gen service have an advantage over those without it as they get to keep up to date with all the information needed to make investing decisions on a day to day basis.

      Value.Vision: its a video about value. Keeps it similar to your book title for added brand continuinity.

      IV Max: IV max is obviously a play on the Imax title. IMAX was a whole new way to view movies and offered people a new experience just as your next gen service will.

      I am also a fan of Channel A1. Don’t know how i missed that obvious one, probably thinking too much.

  48. Rod
    :

    Graphics are great, but one point – you’ve got to be able to read the legends so that you know what they actually mean.

  50. Peter Nicholson
    :

    Hi Roger,

    I am into my second reading of Value Able and continue to pick up on the points that you raise in your book.

    Being an accountant by training I am finding your cash flow and ROE analysis very useful in the re-think of my personal stock holdings and any new purchases.

    To date I have used a few web site based “valuation” subscription services and look forward to hearing more about your new service.

    regards,

    Peter

  51. Ash Little
    :

    Just my view but I would like to see you and your portfolio manager discussing a certain stock after it has reported..

    Pros and cons and future prospepects.

    This should not be restricted to under 10 minutes.

    I could handle up to an hour of this discussion

    I think we would get lots out of this

  52. Michael
    :

    Hi Roger,

    Two ideas:
    Watch.able
    Channel A1

    Accountants aren’t meant to be creative – but that’s my attempt at it.

  53. Orlando
    :

    Good first up effort Roger I really enjoyed it.

    How about just the “Value.able report” ?

    Keep up the good work.

  54. Ric Jay
    :

    Hard to go past ‘Value.Pod’, I would think.

    As a TV journo from a former life, can I suggest dressing up the set a little; something more bookish, cerebral and fireside .. and, no, I don’t mean you should stampede straight to the smoking jacket and pipe. Also, let’s slowly work on some gentle camera movement – a slow zoom or pan. Is there a budding spielberg in the office ?

    And, an aside: for me the ethical elephant in the room for both Woolworths and Wesfarmers is their purveying of pokies. On a long term view, I think this will come to undermine whatever pretence of altruism their marketting people try to sell us. There are much better run, ethical companies out there … and thanks to your work they are much easier to find.

    Keep up your generous spirit.

    • Roger Montgomery
      :

      My mention about whether your ethical filters allow you to buy supermarkets includes pokies for woolies. Thanks you for you movie tips. We did consider a faux fireplace, a pipe and a satin dressing gown…Perhaps for the Christmas Extravaganza.

  55. Jonesy
    :

    My intial thought was “Value.Able to see me” (!) then thought I should be more serious and came up with Value.vision and Vision.able

  57. John B
    :

    Suggest: Logical and Live. Or: Logical and Licit. Or: Logical and Lucid. Logical and Lucid Thinking. Logical and Lucid ideas. My best is: Logical and Lucid Live. LLL. !!

    Hi Roger: have you ever played bridge (cardgame)?
    I’ve discovered that Gates & Buffett are keen players, and partner each other occasionally.
    A teacher of bridge told me that in bidding, it is about being logical and licit. The worst thing you can do at bridge is become angry with yourself. It upsets your next move. It strikes me that the market values you have been teaching me are similar. We use a language: signals, count, leads ………… I like allitteration so I thought of Leads Live as well

  59. Kevin Kelleher
    :

    I almost missed the obvious in my last suggestions:
    Roger’s Re.views or
    Roger’s Value.able Re.views
    or Roger’s Value.able Views (my preferred one!)

  63. Matt
    :

    Thanks Roger, liked the vid. My suggestions are Value.TV or Value.Vision, Value.Videos.

  64. Mark
    :

    Keeping it short and catchy seems like the way to go whatever title you finally go with!!!

    Value.TV
    Value.Vodcasts

    Cheers,
    Mark.

  66. Glyn
    :

    Hi Roger,

    Maybe Keep it simple: Value.able Videos

    Value.able Videos: Reporting Season Round 1.

    Value.able Videos: Why Qantas is still a bad business.

    Hope it helps. Im getting excited about whats in store for us on the website over the next month.

    Glyn

  67. Gemma Bromham
    :

    Hi Roger,

    How old are your son’s. Get them to look at the video. They will find a name quick smart and hit the nail on the head. Love your blog. Gemma

    • Roger Montgomery
      :

      Thank you again Brian,
      Lots of people learn by listening and watching rather than reading so the videos will be staying. If you don’t like them, you can ready the other posts – which we will continue. If you have any constructive suggestions either about the content of the site or the video or you have something to say about a company or stock, please let us know. You have made some excellent contributions in the past, please continue.

  73. paul
    :

    Great stuff with the video , really appreciating your hard work – i am seeing a Brains from Thunderbirds angle ???

  75. sapporosteve
    :

    Roger and crew

    Some suggestions:

    In-valuable (rather obvious but works when you are a global enterprise)

    Value.lab (this contains the letters of valuable in a different format and the “lab” bit has the education theme)

    ValuableTV (for when you insert video into the future e-book editions)

    Valueable take-outs or Valueable out-takes

    Valuable Bytes (a play on digital)

    Montyvideo (god knows but it sounds quirky)

    Montgomery Masters

    I thought the video was a good length because you covered macro issues, micro issues and had some qualitative aspects and some quantitative aspects.

    But more importantly zoom in on the book shelf. I want to see the reading list!

    regards
    Steve

  78. gabe
    :

    Roger
    I watched your show assessing Woolworths and Westfarmers
    Just wanted to say I enjoyed your indepth report – It is what your
    fans want
    Newcomer – just got your book
    Gabe

  79. Tony
    :

    After a little mind mapping I came up with: Rogernomics, Value enAble, ValQual TV, The Value Channel, Inside Run, V-Line, Greater Returns, Quality Talk, Quality Time, and Quality Street..

    On the blog itself, I think Woolworths can hurt Wesfarmers dramaticaly by opening one hardware store in each city, running it at a loss by deeply discounting prices, and destroy the profit across the whole Bunnings chain. this costs Woolworths much less than Wesfarmers.

  80. Rob
    :

    Hi Roger,
    Yet another step forward. I can’t imagine how unnatural it must feel to sit in front of a camera and deliver these screencasts. It won’t be long before you look more comfortable.
    So far, I think Tim’s suggestion of Value.Cast is the best.
    Other suggestions are A1.Vid and A1.Blast for the blast of knowledge we get in each episode.
    So the one I like best is Value.Blast.
    Cheers
    Rob

  81. geoff
    :

    Roger,
    I am a old bloke and do not like it…I would prefer to read than listen.
    Thats me.
    Geoff

  83. Scott T
    :

    Love the video Roger, you continue to refine and grow your enormous contribution to the investing public.

    My name suggestion is a bit long but how about:

    The Results are in…..NOW FOR THE FACTS….. With Roger Montgomery.

    All the best

    Scott T

  85. Robert Field
    :

    Hi Roger,

    How bout Rogers Montgom-o-logue? I have no improvements to suggest.. Nice work. I wandered into a Coles last night and was once again impressed by how far they have come in the last few years.. But Coles is becoming the proverbilal rasin in the Westfarmers mix.

    RobF

  86. Matthew R
    :

    There are some fantastic suggestions on here. I think though that most would watch even if you called it “virus and spyware download” :)

    I thought I must try something as well, but I’m not much of a left brainer (hence the analysis following) so bear with me….

    Insights Video
    – simple and immediately related to the blog. Shorten it to “iV” and it is all web 2.0 and investing at one time

    Roger Direct
    – I imagine using video is partly about making a better connection with the audience. In addition, video always feels like it is a bit more current, as if it could have been recorded yesterday. “Roger Direct” reflects these ideas.

    The Brief
    – once again, I see these videos as a way to quickly put down some thoughts and share them so this name reflects that. The word “brief” is normally associated with an informative yet concise educational message.

    Regards

  88. Chris B
    :

    Hi Roger,
    I met you at my local Coles store and said hello. It was great to talk to you. A fitting place to meet you with what I want to talk about now. Coles and Woolies.

    I wrote an in-depth comment about this supermarket issue before on your website. It is worth a read. It is in the Retail section on your website, it is the first comment in “What is your WOW Value.able valuation now Roger?”.

    I slightly disagree with you on Woolies. My view on Woolies is that they have been in a duopoly for a few decades now and this does not create the most efficient supermarket environment. They run out of products more than they should, their product range isn’t great and they don’t control costs quite as good in terms of their employees. Woolies would not compete with Tesco’s, Sainsbury’s and many US supermarkets, they are very mediocre compared to overseas supermarkets. But then again they have a very very strong position in the Aus market. With 800+ stores, that is very hard to break especially with their great supply chain. They can run out of products on special because the consumer has no choice but to put up with it. And our government has protected them in various ways.

    Woolies have only had good returns on Aus supermarkets & liquor. They can’t get electronics quite right, they can’t even get New Zealand supermarkets right. Their JV in India is small and going just ok. Hotels and pokies are something I must admit I haven’t analysed enough to comment on. Convenience stores and petrol is just ok. Liquor they are doing very well at. It is only supermarkets & liquor in Aus that they can get right. They can’t even get NZ supermarkets right.

    Part of the reason they are losing market share is because of their managers. All the staff care about is increasing sales, so the deparment managers and store managers get more commission, thats all they care about. And this has been going on for over 15 years. They are not dynamic, Coles has been catching up fast because their CEO and management have made some very good changes. I notice that Coles are not offering as big discounts as they were 2 years ago, they got extra market share quickly by very low prices, now that they have sucked in more market share, they are doing the common retail trick and saying how cheap they are but the prices are higher than they were 2 years ago. They don’t offer the big discounts they were 2 years ago.

    But of more concern to me is that their current CEO grew up in Woolies and he jumped before he was pushed and will be replaced by another guy that grew up at Woolies. I think they need someone with more worldly retail exposure than that. Look at what the CEO of Coles has done for Coles. He’s Scottish and ran ASDA which is very good in the UK. They have a far more competitive supermarket environment in the UK and far more tricks up their sleeve than Coles and Woolies who are sitting pretty in Aus. He has been doing very good things for Coles, thats why Luscombe (CEO of Woolies) jumped before he was pushed, because Woolies have been losing market share for about 8 consecutive quarters. And Woolies replace him with another guy who grew up at Woolies? I find that stupid. I am concerned about the board of directors at Woolies who must have had a big say in who the next CEO would be. And therefore, I won’t invest in them. They need someone with a bigger retail picture, especially now that they are getting into hardware.

    I’m a bit sceptical about their hardware venture, I want to see a good track record outside of Aus supermarkets and Woolies haven’t provided me with a good track record. But I’m sure they will do well out of their hardware stores.

    The next bit is a comment from something you said on that video relating to this topic…….. When I lived in the UK, I remember Tesco’s said that people now spend a lot less as a percentage of their wage on groceries than they did 15 years ago. It was quite a gripping and catchy theme. It got media coverage when they said this. It was a big lie and perfect propoganda. Now the CEO of Coles is doing all the same tricks in Australia. He is saying we are saving $40 per person a week on groceries or something like that. What’s he comparing to? And this is a another big fat lie, his nose is going to get bigger like pinochio. He is doing all the same tricks that they did in the UK because Aus supermarkets are less advanced than UK and US supermarkets and they can do their tricks over here to trick the Aus public who aren’t aware.
    Coles are doing the same tricks with milk and generic products as they do in the UK.

    About Costco and Aldi…. Aldi are doing well in their sector of supermarkets but don’t compete fully with Coles and Woolies. I’m not sure about how Costco will go. Costco have a big uphill battle. First of all, they have been finding it hard to get properties that fit their needs. Aldi had the same problems. Aus laws relating to landlords and shopping centres have been changed recently to make it a little bit easier for Aldi and Costco to open stores but it is still a big problem for them. Also, it is actually a big task to compete with Coles and Woolies on price in a major way. Coles and Woolies have a great supply chain all around Aus and this brings their costs down. Costco will find it hard to compete in that way. Aldi a little cheaper than Coles and Woolies because the brands are different, they use smaller suppliers and squeeze them a lot. Coles and Woolies have better margins compared to supermarkets overseas because they can get away with it. This is an opportunity for Costco. And Costco’s model is high volume very low prices. At the moment Costco may be more expensive than Woolies, and the huge queues at their Auburn, Sydney store is a good sign that people want another alternative, but when Costco open more stores, they will be able to offer low prices. But it is still a hard task to compete with Coles and Woolies.

    Conclusion
    Will Costco make a dent on Coles and Woolies? I can’t guarantee it, they may. Aldi have been in Aus for over a decade now, and are slowly making more traction but to a limited degree. Aus is different to US, and Costco may find it hard here. I will be very surprised if their sales come close to Coles and Woolies in 20 years or even 30.

    What about their hardware business? I see no good track record outside Aus supermarkets and liquor. They need to shake up their management. But I’m sure the hardware business will do well, Mitre 10 don’t have many stores and their main competitor is Bunnings but Bunnings have some key store locations so I don’t want anything to do with the low returns while their hardware business starts up. It will cost a lot and I can’t guarantee it will do well.

    I have better options for investing than WES and WOW.

    Other notes
    The comment about Coles saving us $40 per person per week is utter crap, it is opposite, they have been costing us maybe $40 per person per week because there isn’t enough competition within the supermarket industry. People want to bank bash but they should be supermarket bashing, we are paying too much for our groceries. Imagine what you’d save putting that $40 a week on your mortgage.

    Here is some food for thought……… BHP’s forecast profit is $22b, they are by far the most profitable company in Aus. The 2nd is CBA which will be around $6b. A huge gap between 1 and 2. You can add up the big 4 banks profits and they will be around what BHP will make. We need some extra tax on mining companies. Whether the carbon tax is good or bad I don’t know. But Tony Abbott will ruin the country if he doesn’t get in.
    If you want to pay off your mortgage quicker, you shouldn’t be bank bashing, you should be supermarket bashing. The Aus banking system is a model of future developed economies. People have short memories, they seem to forget that we did pretty well sailing through the GFC.

    We’ve been getting ripped off for too long from our supermarkets.

    Also, I wish your readers would analyse companies and industries more instead of just looking for quick ways to calculate intrinsic value. They want quick answers. Investing doesn’t work like that.

    Chris

    • Roger Montgomery
      :

      Great stuff Chris, Thanks again. I didn’t disagree with your [similar] comments last time and I will be agreeing with you again. We actually believe the same things but I am looking at which of the two is preferred on an economic return basis. On the question of which of the two (if you must decide) is likely to produce higher returns – the answer for me is WOW. Hope that clarifies. Regarding you comment “I remember Tesco’s said that people now spend a lot less as a percentage of their wage on groceries than they did 15 years ago. It was quite a gripping and catchy theme. It got media coverage when they said this. It was a big lie and perfect propoganda”; did you notice my comment in the video, and I quote; “..and if your ethical filters allow you to buy supermarkets”? Hopefully that just about covers it Chris! Thanks again for taking the time to write and I would really like to acknowledge your views about management’s upbringing.

      • Chris B
        :

        Although I am critical of WOW, they are a strong company. I know there are things that I don’t know about supermarkets and I know you have deeper analysis of supermarkets than me. I just want to show your readers that lots of analysis of markets is vital in investing.

        Thanks again Roger

        Chris

  89. Peter Robinson
    :

    My first comment Roger having recently met the graduate criteria. Recalling the story of how you named the book, I though I’d dust off my old dictionary and try the same approach. First up I turned to the “Dis” words, e.g. Disable. All very negative. Next I turned to “Report”. So maybe Report.Able? (True story)
    PS, I’m happy to read, watch or listen – just please keep it coming!

  90. Craig
    :

    Big thumbs up for the video concept Roger. However, disappointing you didn’t sing the “down, down, prices are down” bit.

  91. S G
    :

    Hi Roger and bloggers,

    Name for reporting season – Don’t allow truth stay on way of good story.

    Thank you.
    Regards

  92. Russell Robinson
    :

    Update….

    I went to You.Tube and your new video worked fine there.

    So it must be a problem with the link on the blog.

    Also, you could spell my name idea this way: ValYouTube

    But you might get not copyright problems with that.

    Cheers,
    Russell

  93. Raymond Herd
    :

    Hi Roger,

    Well done on your first video report, what a terrific idea. My suggestion whilst not all that creative would be to name it the ‘rogermontgomery.com/video-channel’ and link it into your blog under a similar range of ‘video’ categories/indexes as you already have on your blog.

    Not sure if that is what you are looking for but good luck with it for the future.

    Cheers, Raymond

  94. Russell Robinson
    :

    Hi Roger,

    I like the video idea and my suggestion for the name is “Value.Tube”.

    Btw, on my iPad I can hear the audio but the video is just black.

    Other videos work ok.

    Cheers,
    Russell

  95. Tim Phelps
    :

    Love this new format. How about “Value.Stream” or “Value.Cast” or something similar for the name?

  98. Chris L
    :

    Hi Roger,
    nice idea :) Perhaps you could call the series something like “Cooking with Roger: Seasonings”?

    I was going to comment that it’s a pity that you dind’t use graphis, but starting at about 5:50 you did that helped a lot; I think you should do that more, particularly when mentioning comparison figures.

    Cheers,
    Chris L

      • Seany B
        :

        Hi Roger,
        I thought the length of the video was just fine, and all the points you made were very insightful. I wouldn’t worry about it being too long. I think anything under 10 minutes is fine.

        A great idea, I would rather watch and listen than read. You can also say much more.

        Cheers
        Seany B

      • Chris L
        :

        No, don’t make them shorter – I like the length; more time to learn interesting things :) But the graphics etc make it easier to do that learning. (I wouldn’t go past ten minutes though :) )

  99. Phil C
    :

    Hi Rodger,
    One of the aspects, in my opinion, that sets you apart from the rest is your preparedness to educate and provide information that is VERY useful to the everyday investor.

    My suggestion, therefore is:-

    Invest.valuably (ie) Valuable investment information.

    Cheers

    Phil

  101. Sin G
    :

    Loved your new way of blogging Roger. Trying new approaches such as this just adds to the experience for Valuable graduates. Keep it up. Maybe you should call it Video Value.able

  102. Sean
    :

    Hi roger
    As always, great info in your post, albeit in video form…

    Was thinking about a name for these posts and, sticking with your book tittle play on words possibly
    The yard.stick
    I personally like the value.able low.down

    Cheers

    • Roger Montgomery
      :

      So far I have only seen really great suggestions. The ones that jump out to me are; Montcommentary, Video.able and Aurdit. Keep them coming graduates! Thanks Emily.

  108. Lloyd Taylor
    :

    Roger,

    A great leap forward in communication. I prefer to listen than read.

    My suggestion for the title of next generation posts:

    Value.able Verbatim

    Snappy and hits the mark, at least in my opinion.

    I have a few video production suggestions, but that’s for another day. It’s a great first effort, and with practice I can see this becoming a very slick and effective communication medium.

    Now about the audiobook version of Value.able?

    Regards
    Lloyd

  109. Nevada
    :

    Fantastic as always Roger

    Best investment i ever did was to buy your book and your blog is getting better and better looking forward to your new a1 service
    Best reg N Cody

  110. Phil Harmonic
    :

    I really like the video format but it felt like you were reading of a script and felt just a little static. At the very start of the video I felt your personality but it drained away the longer the video went.

    Don’t get me wrong, I think it is really great but as with most things, it will take a little time to make it perfect. I’m thinking of Top Gear here when their first seasons were somewhat wooden, but are now amazingly smooth. Seeing as this is your personal insights blog, I felt like you could’ve been a little more, warm perhaps with the camera. It is us on the other side Roger, your loyal acolytes!

    So that’s my feedback. As for what to call these posts, I’m sure we will get many interesting contributions. I’ll leave mine to the above.

    Thanks

    p.s. looks like a very comfy chair :)

    • Roger Montgomery
      :

      Good feedback Phil. Lots of information. Perhaps I will keep them shorter and just make one or two points instead. I watched an early episode of TopGear with my sons recently and they were far less polished. I am sure you will see it start coming together as we progress through reporting season. Stay tuned and thank you again for taking the time to provide your useful feedback and encouragement. The seat is very comfortable, which helps.

    • Chris L
      :

      Phil, exactly my thoughts re the presentation!
      Roger, as I said further up the page, Graphics etc are good; now I’ll add, chatty and warm, perhaps a bit of gentle humour (like YMYC etc) are also good. The Top Gear analogy is excellent.

  113. Tyler Goldberg
    :

    Quality Costs Less At (@) Graham & Doddsville (or Montgomeryville/Roger’s Goldmine

  114. Tyler Goldberg
    :

    -Roger’s Reporting Season Rant
    -Roger’s Reporting Season Rave
    -Dont Get Dished the Crepe This Reporting Season
    -Digesting the Crepe this reporting season
    -The Reporting Season, By Sorri. Biz. Ness
    -Reporting Season Pennies From Heaven Are A Blessing In De Skies
    -Evalu.abling this reporting season / Evalu.ating this reporting season
    -Profiting From the Honey Season
    -Dont Be Fooled By Fake Profits This Reporting Season
    -A Christmas Season Special
    -Quality Not Quantity This Reporting Season (i.e. ROE better than the pure EPS figure)

  116. Geoff Cruickshank
    :

    Or if a written piece is a blog, perhaps a spoken piece is a blag. I don’t think it sounds quite right somehow.

  117. Geoff Cruickshank
    :

    We’re listening, Roger, which suggests something involving aural, and you’re speaking. French for ‘he speaks’ is ‘il dit” so I think you should call these pieces aurdits, which come to think of it, is probably the etymology of ‘audit’, and that’s close to what you’re up to!

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