Understanding sensible value investing
Exclusively for subscribers! Find out how to lay solid foundations for value investing in the first of a two part series.
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.
He is also author of best-selling investment guide-book for the stock market, Value.able – how to value the best stocks and buy them for less than they are worth.
Roger appears regularly on television and radio, and in the press, including ABC radio and TV, The Australian and Ausbiz. View upcoming media appearances.
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.
Hi Roger
I really enjoy your comments and insights and I’m a scaffold member.
I was wondering what you thought of Webjet at its current price around $3.50? It seems to have great growth prospects
thanks
Nick
Hi Nick,
the big questions for us has been identifying a clear competitive advantage that is sustainable. We are concerned that the best may be mature and despite its launch of the hotel offering, it isn;t making inroads on Wotif’s turf. Meanwhile Wotif has launched flights but hasn’t made inroads on Webjets turf. You can read the piece on Webjet here (http://www.theaustralian.com.au/business/wealth/what-if-web-giants-merged/story-e6frgac6-1226723829949)
I can’t access any of the reports. I login click the buttons but nothing happens
Hi John,
You can reset by requesting a new password.
Does calculating an intrinsic value as per your book for a listed investment company valid?
Best to calculate the intrinsic value of every stock in the portfolio and then compare the aggregate to the market price of the portfolio…Skaffold can do this for you quickly in its Portfolio Feature.
Roger
I attended the Aust Investors Association conference on the Gold Coast last week and enjoyed your session on Understanding Sensible Value Investing Part 3. Now I will purchase your book but not sure if I will purchase Skaffold at this stage. I also enjoyed the joint discussions with Alan Hull and Marcus Padley. I thought the conference was excellent and recommend this yearly conference to everyone with an interest in increasing their wealth and investment knowledge.
Cheers Doug
Thanks Doug,
I appreciate the feedback and hope you gained a good sense of the important and valuable differences between fundamental analysis of businesses and that ‘blue-line-crossing-the-red-line’ technique that looks at stock prices.
Roger,
You are doing a great job…You are offering so much of knowledge & wisdom to common people, without charging them & keeping it as simple as possible…I always await Tuesday mornings for your insight to be uploaded…One needs to acknowledge all the hard work that you & your team are putting up for this…
Great Work & a lot of gratitude for you & your hard-working and sincere team…
Its old & conventional yet gold – Hard-work is key to success…rest all factors remaining constant…:-)
The only problem with common sense is that it is not common.
The real problem is working out what is value. Skaffold and others often have widely different estimates for the same company. Both cannot be right. Unfortunately I believe Skaffold has a flaw in that subscribers do not know the date of valuation when we look at the charts. Until we do we are just blundering around in the dark.
Ian the reason there is no date is because the valuations are updated EVERY SINGLE day!!!! Others need to put a date up because their valuations are being updated manually and they simply cannot cover every stock, every day like Skaffold can.
l have just purchased your book Value.Able, l am so glad l did. lt is very clear to see without this essential knowledge, both here on this site and in your book, how one can end up with disappointing results.
Thankyou, l look forward to more insights.
Delighted to hear it. Always remember to seek and take personal professional advice before acting…
Try as I might I cannot get into the section where I can look at the white paper. Spent 20 minutes and to no avail
Thanks Nigel. Not sure what the problem was for you. Hope its rectified.
Thank you for reminding me of these essential points. Also, you touched on the vital need for the investor to have ‘time in the market’. Time to get your head around the perambulations of the market.
I login but cannot see or read the report ????
Good news Roger/Manufacturing
Yesterday Manufacturing UP in Europe, UP in USA, UP in China( must say this was bit of a surprise).
If we look bit further than ASX we can “cook with gas” ( as Kevin would say)
For me, this is a good investing time as any .
Cheers
Zoran
Looking forward to the next one Roger. Its common sense but still somethig that can get easily missed. The best thing i ever did was sit down and think about what my investment philosophy is and refine that. It has provided me with direction and allowed me not to lose focus or find myself creeping into the speculating area.
By knowing and understanding the advantages and limitations of my investment philosophy i have then been able to create and learn the tools to use it and answer some of the questions i previosuly didn’t know the answer too.