Registered:
27/10/08
Seen:
7th Jun
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Occupation: Retired

Interests: Stocks

Fantasy Fund: Stockhound's Fund


Investment Strategy

Mid tier near production exploration companies.



Stockhound's Latest Blogs

Ok - quick quiz... Answer these questions to learn if you are likely to be a good investor. 1. A bat and ball together cost $1.10 in total.  The bat costs a dollar more than the ball.  How much does the ball cost. 2. If it takes 5 minutes for 5 machines to make 5 widgets how long would it take 100 machines to make…

I like to re-read Joel Greenblat's classic 'The Little Book that Beats the Market' on a regular basis.  It really does help to bring the mind back to what is important in stock picking... picking good companies for cheap prices.  The definition of a 'good company' is one with a high Return on Capital Employed, and the definition of a cheap company is one with…

This is probably the best article I've read on non-conventional oil sources in a mainstream magazine.  If you can get your hands on the hard copy, there are some excellent diagrams on the various techniques being used by  companies around the world, such as toe-to-heel-air-injection (THAI), steam-assisted-gravity-drainage (SAGD) and other methods.   http://www.newscientist.com/article/mg20427375.900-extreme-oil-scraping-the-bottom-of-earths-barrel.html?full=true What is non conventional oil?   For those that don't know, non conventional oil…

Abcam has been such an amazing performer over the last couple of years.  The chart is phenomenal, and today spiked another 5%.  As far as I can see, it's getting pretty fully valued at 25X earnings, and the directors have been offloading enormous emounts over the last year - one founder (Cleeveley) sold £16m of stock on the 16th September. But it seems to be…

In response to Darling's talk of taxing banker's bonuses ( http://www.guardian.co.uk/uk/2009/dec/07/alistair-darling-shock-tax-bankers ), I thought it would be good to start a discussion on the rather philosophic question of 'what is a banker'? What is the difference between a statistical arbitrage desk within Barclays Capital and a hedge fund that does the same thing? Will this tax mean that hedge funds get taxed similarly to banks? …



Stockhound's Latest Comments

I think a lot of hedge funds use TA - but not in the way you'd imagine. They use statistics objectively as statistcs rather than looking 'subjectively' at patterns on charts. So I guess you could say TA works in that sense.

re. Gearing - would be a mistake for sure... 'great' companies tend to be very cashflow generative thus having little need for much gearing. The 10 year average condition - would that exclude companies with an operating history of less than 10 years?  I think that would be a mistake in the UK market - it would preclude companies such as ASOS and Abcam from…

It has actually been well documented by Miller and Modigliani that in a scenario with no corporate taxes or brokerage costs dividend policy is irrelevant - unsurprisingly it's known as the 'dividend irrelevance theory'.Their theory is that any shareholder can create 'homemade dividends' of their own liking. If you received a big dividend and didn't like it, you can buy more stock, if you didn't…

A lot of people post these kinds of articles banging the table about how dividends matter. The truth is they are normally trying to sell you some kind of income fund. The proportion of earnings paid out as dividends  (the dividend payout ratio)  has been falling for decades primarily as share buybacks have become a far more common way of returning money to shareholders. As…

Really is an excellent book - the best of the series, and I've read a lot of them. It promotes a simple maxim - buy 'good' companies at 'cheap' prices. 'Good' = high ROCE (he removes intangibles from the definition of capital) 'Cheap' = high earnings yield. Most people think of the earnings yield as the inverse of the P/E ratio, but he uses EV…


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