Good prospects and undervalued (USA)

[gib123]

Hello Gibson,

Starbucks is a fantastic business, however it is reliant on a commodity, but in this instance, at the right price, it would constitute a buy for me.

$33.58 would be my buy price, with fair value at around $41.14.

Best Regards

James

I realized cr was calling you a scam earlier in this thread, but I believe James has got real system there. I pulled a research analysis report off VectorVest and the institute believes that Starbucks has a current value of $40.38, for which the result is extremely close to James research.

James set his buy price really low which is not likely to occur unless in the case of another financial crisis down the road.

Thanks again.
Gibson

 

[cr6196]

I realized cr was calling you a scam earlier in this thread, but I believe James has got real system there. I pulled a research analysis report off VectorVest and the institute believes that Starbucks has a current value of $40.38, for which the result is extremely close to James research.

James set his buy price really low which is not likely to occur unless in the case of another financial crisis down the road.

Thanks again.
Gibson

vectorvest is also, by the looks of the website, a scam! You need to be significantly more sceptical and you have to do the hard work for yourself. You cannot model or build a "system" based on value investing! Value investing is qualitative! You can build a rough approximation like Magic Formula but that is all. You cannot get exceptional results by just modelling the financial statements (if you doubt this try backtesting) especially as there are now hundreds of quant funds doing this (the returns of stuff like Magic Formula and P/B will probablly be significantly different in the future). A better idea would be get in touch with professionals and find out about this stuff! Again, probablly too much like hard work.

EDIT: Also that stuff about SBUX being in a commodity business made me lol. Even if it was, commodity business doesn't mean low returns...seriously rookie error.

 

[james1989]

vectorvest is also, by the looks of the website, a scam! You need to be significantly more sceptical and you have to do the hard work for yourself. You cannot model or build a "system" based on value investing! Value investing is qualitative! You can build a rough approximation like Magic Formula but that is all. You cannot get exceptional results by just modelling the financial statements (if you doubt this try backtesting) especially as there are now hundreds of quant funds doing this (the returns of stuff like Magic Formula and P/B will probablly be significantly different in the future). A better idea would be get in touch with professionals and find out about this stuff! Again, probablly too much like hard work.

EDIT: Also that stuff about SBUX being in a commodity business made me lol. Even if it was, commodity business doesn't mean low returns...seriously rookie error.

Who said anything about low returns and commodities? I have stipulated time and time again, commodities are cyclical hence don't provide adequate safety of capital due to it been impossible to consistently value a commodity, generally. Nothing to do with low returns. I am all about capital preservation, don't lose money should be priority number 1. Please refer to figure 20-1 p.526 in the intelligent investor to see why.

You are wrong about quantitative analysis, 100%. A qualitative factor must be considered as I have shown in previous posts, but quantitative work is essential, any decent value investor (making 20%+ annually compounded) will tell you that.

Best Regards

 

[cr6196]

Who said anything about low returns and commodities? I have stipulated time and time again, commodities are cyclical hence don't provide adequate safety of capital due to it been impossible to consistently value a commodity, generally. Nothing to do with low returns. I am all about capital preservation, don't lose money should be priority number 1. Please refer to figure 20-1 p.526 in the intelligent investor to see why.

You are wrong about quantitative analysis, 100%. A qualitative factor must be considered as I have shown in previous posts, but quantitative work is essential, any decent value investor (making 20%+ annually compounded) will tell you that.

Best Regards

Wow, really having trouble putting an argument together and understanding my point.

First, I obviously didn't say quantitative factors weren't important...that is why it is called value investing. My point was that there are millions of dollars being pumped into "cheap" stocks and to get an edge you have to do qualitative analysis. More to the point, that is what value investing is about, looking at the underlying business rather than just using a model. You haven't done any (that was what my orginal criticism was) as your picks totally rely on a model (not a very good one, probablly DCF, looking at the output). Again, try talking to someone who is in the business rather than speculating about what they know.

Second, you have totally misunderstood the point about commodities (again, you clearly don't understand what you doing at all). Yes, you can't value a commodity (the actual point is that it doesn't provide cashflow not that it doesn't provide "safety of capital") but you can value a business that sells a commodity and these businesses can have sustainable competitive advantages. The fact that you don't understand why you shouldn't invest in commodities, the fact that you don't understand the difference between a business and a commodity, and the fact that you don't understand that a "commodity" business can have a sustainable competitive advantage shows you shouldn't be giving anyone advice or pretend to be an expert.

EDIT: I see the donation page has made a magical disappearence. What a douche.

 

[james1989]

How can I debate with you? you disregard important points over and over again. It seems clear to me you have a very poor grasp of even the most basic principles of value investing.

I've annualised 38.4% since september 2008, without the use of leverage, when you can tell me how to improve on that, i'll accept your approach to investing.

I can't say much else as I can see you're having difficulty in understanding the central concept of my investment philosophy.

 

[cr6196]

How can I debate with you? you disregard important points over and over again. It seems clear to me you have a very poor grasp of even the most basic principles of value investing.

I've annualised 38.4% since september 2008, without the use of leverage, when you can tell me how to improve on that, i'll accept your approach to investing.

I can't say much else as I can see you're having difficulty in understanding the central concept of my investment philosophy.

What have I disregarded? You couldn't even explain the difference between a commodity and a business! It doesn't matter what you make if you can't explain how you did it (again, that suggests you have never even met a professional investor)...and you haven't demonstrated that you understand anything about value investing or about investing in general. As I said before, you haven't proved anything, all you've proved is that you have a big mouth and will continue lying beyond the point of reason.

I am not trying to get you to accept any approach (the fact that you think I am is quite telling). All I am trying to get you to do is explain one of your calls. Just one! What is your central concept? Insert numbers in spreadsheet...that is your concept. I thought your strategy was a big secret so where am I supposed to have found about your the big concept? In fact, you haven't actually said anything related to investment at all, all it has been is "I have a secret strategy that I have perfected for years" and "Your not a value investor".

So just explain one of your calls and prove you know what your doing.

The other option is to admit that you are lying (it is pretty obvious from your past posts that your a pretty compulsive liar anyway) and you don't know what your doing. How did that investment in Game that you mention in your profile work out btw (guess that didn't involve any leverage either)?

 

[james1989]

Bought Game at .94gbx, made a very quick 33% plus a little more as it surged so quickly and didn't allow for me to get out in time. I didn't use leverage, absolutely no reason to.

The closest explanation I can get to without providing you with a free lunch is here Ben Graham Checklist Stock Screen however, my method would return double this as I examine the quality of company and use a much more sophisticated valuation method.

Best Regards

 

[cr6196]

Bought Game at .94gbx, made a very quick 33% plus a little more as it surged so quickly and didn't allow for me to get out in time. I didn't use leverage, absolutely no reason to.

The closest explanation I can get to without providing you with a free lunch is here Ben Graham Checklist Stock Screen however, my method would return double this as I examine the quality of company and use a much more sophisticated valuation method.

Best Regards

Wow, you really don't know what your doing...if you buy a company that has a lot of debt (inc. operating leases) then your ROE (and therefore, you ROI) is leveraged as well. You are using leverage, you just don't understand why or how.

Look, value investing doesn't involve any big secrets or formulas. All the "valuation" stuff is well-published and it doesn't add value. The fact that you think using a more "sophisticated" valuation method will add value is laughable. I presume that by quality you also mean something quantitative. You also can't say stuff like my return will be double x, value investing depends on other people doing something wrong.

Anyway, you have proved your totally incompetent and you haven't been able to explain even one of your picks. It isn't that you don't know what your doing, its that you think you know enough to give other people advice. No honesty, no integrity. Embarassing.

 

[james1989]

What can I say, seriously, what am I talking to here?

Your comment on GMG is absolutely laughable, you clearly can't examine financial statements. The majority of kids could see what is wrong with your statement, very basic stuff cr.

Anyway, some of us have research to conduct, I enjoy the comedy you bring to investing if nothing else, but you're proving to be a drag on efficiency. Ride on my coattails if need be, but do it without the scene.

Best Regards

 

[cr6196]

Your comment on GMG is absolutely laughable, you clearly can't examine financial statements. The majority of kids could see what is wrong with your statement, very basic stuff cr.

Whats wrong with it then?

 

[james1989]

Just a little update of my micro cap value strategy

Date Trade Type Symbol Quantity Target Price Price Commission Total Cash Value Account Value
5/7/2012 11:09 AM Stock: Sell at Market GTSI 39682 $7.71 $6.99 $305,945.20 $1,332,224.34
5/3/2012 10:02 AM Stock: Sell at Market IFON 525477 $1.25 $6.99 $656,839.26 $1,256,720.85
4/18/2012 2:15 PM Stock: Buy at Market SGMA 47357 $4.13 $6.99 $195,591.40 $1,038,310.83
4/18/2012 12:41 PM Stock: Sell at Market CRV 86580 $2.25 $6.99 $194,798.01 $1,035,295.26
4/18/2012 10:51 AM Stock: Buy at Market IFON 273880 $0.74 $6.99 $203,006.85 $1,005,411.73
4/13/2012 11:26 AM Stock: Buy at Market IFON 126582 $0.79 $6.99 $100,006.77 $1,016,962.41
3/26/2012 9:58 AM Stock: Buy at Market Open GTSI 39682 $4.99 $6.99 $198,020.17 $999,979.03
3/26/2012 9:58 AM Stock: Buy at Market Open CRV 86580 $2.30 $6.99 $199,140.99 $999,986.02
3/26/2012 9:58 AM Stock: Buy at Market Open SGMA 50376 $4.00 $6.99 $201,510.99 $999,993.01
3/26/2012 9:58 AM Stock: Buy at Market Open IFON 125015 $0.78 $6.99 $97,518.69 $1,000,000.00


Best regards

 

[gib123]

James,
How would you value Telecom Argentina S.A. (ADR); TEO now?
Seems like a sweet spot to get in now?

 

[james1989]

Hi Gib123,

With the recent seizure of private business in Argentina I would now personally steer clear, it's not worth the risk, especially taking into consideration TEO's sector and the regulatory pressures it faces.

 

[james1989]

Baxter at around $50.

 

[james1989]

BDX at around $70.

 

[james1989]

Snn $45

 

[james1989]

Starting to fall into value in a number of sectors now, I like BDX as aforementioned and GD at around $60.

 

[james1989]

Actual figures are $67.27 for BDX and $59.96 for GD.

 

[james1989]

SNN $42.85 actual.

 

[james1989]

Cash America International CSH looks attractive at present valuations and I conclude that growth drivers are already present for the next few years.

The only problem with a selection like CSH is size, I like to stick to 5bn+ market cap, definitely one for consideration however.

I have cancelled all other calls until I have time for further analysis.