Coffee Can Shares

24th Jul '21 by CamRaid

39 comments 2788 reads

I have half way through 100 Baggers, a book which has had lots of discussion on here. I now know where the 'Coffee Can' expression comes from.

It has made me look at my portfolio and I also went back to look at Paul Scott's top 10 holding which he kindly shared. In my own portfolio and in Paul's portfolio I see we have some turnaround/value plays and also some long term holds which I guess would be 'coffee can' shares.

My own personal coffee can shares are Marlowe (LON:MRL) , Sdi (LON:SDI) , Volex (LON:VLX) and possibly Naked Wines (LON:WINE)

I know Paul sometimes mentions certain shares as his 'Coffee Can' shares.

I would like to embrace this approach and would like to find other good shares for a 'Coffee Can' approach as described in 100 Baggers.

I thought a thread where we could share ideas may be useful for a lot of us.

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dcon85

26th Jul '21

Yes, good point. I was thinking the same thing, as he's not the first to show me his trading account. Infact I've been thinking about the 3 new market participants I know.

One has a FTSE100 tracker with modest contributions each month. Approx £3k total (property guy - works in finance)

The other has 80% in a tracker or ETF and 20% for discretionary maybe £2.5k?/£400 split (not in investment or finance - excited by markets but not willing to risk all of savings)

The other has some mix of crypto and discretionary stocks. Approx £1.4k (small change to this guy but very excited esp. crypto)

The most important thing is that this is all new money to the markets. In my view, only two of the market participants have been excited by recent market increases and this has been a cause for their entry (could exit the market just as quick?) - their portfolios look very similar - small in size/fun money - free trade accounts, a lot of American stocks, infact I couldn't look up my stocks on their accounts. The distribution of all this new money to the markets varies - UK/US, FTSE100, crypto. I also consider demographic where these people are over 30 - if I was in my 20s would that conversation exist? would the stock/etf/crypto split be different?

In contrast I have other friends who consider the stock market to be pure gambling and only use crypto to buy drugs. I try to pay attention to these things, but not get too bogged down with it, fortunately I haven't received any tips from the shoe-shine boy, but then again I rarely wear shoes..

ezlifeme

RE Newbie Investors asking advice for share Tips

Not as bad as them enthusiastically recommending shares (Shoe shine boy urban legend)

https://www.businessinsider.co...

mojomogoz

I doubt anyone really knows what a coffee can stock is in advance, they just make great ex post narratives and if you happen to own it then you can make like you had the foresight from a hindshite perspective....particularly we add 100 bags to coffee can. [Note to self: Funny how everyone takes bagging in a long term bull market environment, occasionally raging bull]

Most that we ex ante choose as coffee cans will just be those that fit either our analytical prejudice or atavistic needs most comfortably. Having read about and considered coffee can stocks I confess to feeling the vibe but not really getting the actuality.

With the exception of some of the US mega tech I'm sceptical that any other company mentioned here is a real coffee can (some more tenuous than others)....and with the mega cap tech I think your money is quite safe over 10 years (though could plunge inter period obvs) but not necessarily bagging much.

Bagging is risk....risk is seeing differently...and then you bag by having patience on the dissonance/difference you see and holding through the market bs

error

iwright7

Worth reading "The making of a Multi-bagger", produced as an intern report in the summer 2020 about US and UK shares that had multi-bagged over the previous 5 years.

https://static1.squarespace.com/static/5aaacb57506fbe4636414126/t/5f85c428b4bac16b20450df0/1602602051503/Conclusion+Deck-+Makings+of+a+MultiBagger+-+FINAL-compressed.pdf

I have a dummy portfolio (which I created in Oct 2020) of the 17 listed UK multi-bagger stocks whom as a group have continued to preform well....

Silver Moon

28th Jul '21

Hi Dickey Mint, I'm not too sure about your choice in Royal Mail (LON:RMG), I have held it since Privatisation and bought again and again but now I'm seeking a way out. The other couriers are working far more efficiently and cheaply in comparison and now that letter post is much reduced don't you think I may have something there?

On the 3rd of April after my read of 100 Baggers I compiled a virtual portfolio of that name. 18 company names from my actual portfolios since I know quite a bit about them, and 1000 pounds virtual cash was lodged in each. To date, the gain is 10.1 percent, I know this doesn't compare with the 20 percent plus made by some stock-pickers in this duration but we are talking Coffee Can. Of my list of 18, three are underwater, no worries, but I have to confess that yesterday I sold the star, Dotdigital (LON:DOTD) which was a 2-Bagger in my actual portfolio. Readers comments / questions are welcome.

Rusty2

On 2nd April I set up a virtual NAPS folio of 20 stocks. It is up 10.8% today, so similar to yours. NAPs is designed to be up to 1 year, the question is will yours keep up the momentum in years to come?

Why sell if it's a Coffee Can stock? I think that is the point, you don't sell winners or even top slice them.

herbie47, ah, there you have me! The truth is that I seek the holy grail and will explore every avenue open to me but time is short, I'm 77 yoa. Dotdigital (LON:DOTD) pays but a small divi and I used the funds to add to 5 stocks that I already hold and pay much higher divis. I couldn't see this on any account back in April. Also I think there is a second route to 100 baggers and that is by ratcheting-up, not top-slicing but by selling high then buying in again on a low but as I say, time isn't on my side. I should imagine that Paul Scott could be a master at this, if he's not already.

Andy Sav

My lucky dip in the Can 'o' Coffee includes Sosandar (LON:SOS), Boohoo (LON:BOO), React (LON:REAT), Sylvania Platinum (LON:SLP), Cambridge Cognition Holdings (LON:COG), Shield Therapeutics (LON:STX), Somero Enterprises Inc (LON:SOM), Saga (LON:SAGA), Volex (LON:VLX), Intercede (LON:IGP) . If any of the first three make it over the next 10 years, then I'm retiring! If it takes 20 years, well, I would have already retired by then :-)

MiserableJacktPotato

29th Jul '21

If you read “excellent investing”, in there Mark Simpson states that over long periods (a decade iirc) it’s not uncommon for the best performing stocks to experience falls up to 75%.

I can dig the book out and give more accurate statement if people want it, but the point isn’t the exact numbers, the point is even the best stocks don’t constantly beat the market, the old adage ‘time in the market not timing the market’.

Since reading that, I’ve massively reduced my portfolio churn.

Michael Tee

To me the term 'coffee can share' means a share you own for which you have high expectations. I have high hopes for all the shares I own when I buy them as do most if not all of us. The longer I own shares in a company, the more I understand but obviously you can't know everything. Owning shares in a company is a journey. Sometimes as the journey unfolds, there are surprises, both negative and positive, which can make me reassess.

I am not expecting 100 baggers but I hope my investments do well and ideally would like to hold them forever. It's always nice to find the pot of gold at the end of the rainbow.

timarr

To me the term 'coffee can share' means a share you own for which you have high expectation

The standard meaning is "buy and forget" - it derives from the old mid-Western, pre-bank tradition of putting valuables in a coffee can under the mattress and then forgetting about them until times got hard. So, technically, a coffee can share is one you buy and then simply let get on and do its thing without reassessing. I doubt very many people on Stockopedia take that approach to investing.

In my experience genuine coffee can shares usually end up being taken over - Charles Stanley (LON:CAY) today is just the latest in a long line of decent shares I've seen disappear from my portfolio. They tend to have the qualities that acquirers like - reliable cash flow and some business moat that means they can generate good returns on capital. But they're not usually the type of businesss that attract a lot of interest as they don't provide the type of exciting story that drives private investor investment (and disinvestment).

I also hold Sumo (LON:SUMO) and Daily Mail And General Trust P L C (LON:DMGT) which are in takeover situations and I can easily imagine a number of others being acquired. The UK market has seriously underperformed since 2015 and there's a lot of cash floating about looking for a home.

In the end real coffee can shares don't tend to be very exciting, but they just roll on, year after year, doing their thing.

Bluesky Ventura

You could actually just invest in a company called the coffee Can.

https://thecoffeecancompany.co...

Thanks for the link supplied, I found your 17 UK-listed stocks (I only hold UK stocks) and have since constructed 2 pages in a spreadsheet file. One dated 5 years ago (catching Stocko's historical data for the essentials on each stock) and another from the Stocko reports of yesterday/today. I'm trying to make comparisons with these in the stocks that I do hold in order to prevent myself from selling a Coffee Can Multi-Bagger. Wish me luck as it seems to be another of those essential ingredients:)

CamRaid

Thanks. That is interesting and useful.

geoffish62

OMG Timarr :

I hold all of those "under the radar shares" - in Jarvis' case for over a decade. Hope to converse again when they fly above the radar !

Geoff

DavidMcCabe

31st Jul '21

Great report, very interesting, thanks for posting.

David

nanotrader

Very much agree here. The other thing is not to sell simply because the share has gone "dead", unless you only hold 5 stocks where time is money!

1st Aug '21

Yes luck needed too. Out of interest what is the current average 5 year return of the 17 UK multi-bagger stocks from your spreadsheet?

Coffee Can Shares

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CamRaid

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