Category: General

  • H&T Group (HAT)

    Point & counterpoint

    Some brief admin..

    First things first, I'm happy to say that I am - as of the start of August - gainfully employed, thanks almost entirely to this blog. I am deeply obliged to all the people who contacted me, mentioned the post to other people and, more generally, everyone who's read the blog. I started it three years ago as a way to learn more about something I found myself interested in, and now find it has proven a fantastic tool for meeting both private and professional investors on top of the learning process. All in, it's been a pretty sweet deal!

    My role is at a small hedge fund in London, basically researching stocks in a vein not too dissimilar to what I've done on the blog over the last three years. I haven't quite figured out exactly what direction the blog itself will take; predominantly because, as long-time readers might have noticed, I vociferously complain about even a whiff of potentially divergent interests. Usually that's with reference to company management teams, but given the overlap between my soon-to-be professional life and the stocks I cover here, there is a hypothetical situation whereby I'm not comfortable writing about a stock - or group of stocks - for one reason or another. Those are things I need to iron out!

    I'm available, of course, on the same e-mail address as ever. (more…)

  • The high street

    The burden of pain

    I try not to spend too much time talking about economics on the blog; I'm often reminded of the description of philosophy being a pursuit for people with 'too much time and not enough to do with it'. The field of making predictions in economics strikes me as much of the same sometimes; in fact, I often wonder if philosophy derives more worth from its contemplative and numinous aspects. On occasion, though, I strike upon a thought which tempts me to indulge - to cast aside my better judgement and put finger to keyboard on something which does pique my curiosity about the future. Since this is an investing blog, it is - naturally - related to investment. I'll throw my musings out there, some potential equity 'plays' and my esteemed readers can judge the validity of the logic for themselves.

    Here's my basic principle, then - the Internet is siphoning trade from the high street. Individuals have bought more and more of their everyday goods from the internet over the last decade, as the efficiency - and therefore cheaper prices - that online operators (like the behemoth itself, Amazon) can bring lures them away from their brick-and-mortar tendencies. I can't remember what the first good to be bought primarily online was; it seems likely to me that it would have been something relatively homogeneous, easy to send/deliver and which requires no physical inspection on part of the buyer. CDs and DVDs seem to fit that bill quite nicely. Now people are buying groceries, celebration cards, phones, white goods... more or less everything is available on Amazon. The limit, simply, is what you feel comfortable purchasing online. Some people, understandably, want to see and touch a product before buying. Some of these people then go and shop online (a lamentable habit, as far as I'm concerned).

    Either way, if we accept that the young have a higher propensity to shop online than the old - a fairly undemanding assumption - and that the overall propensity of everyone to shop online is increasing over time, as people become more comfortable with the notion, it paints a pretty bleak picture for the high street. The death of the high street, you hear people lament mournfully, usually while angrily waving their proverbial fist at one of the corporate giants of this world. That's that, then. Where are the investment opportunities here? (more…)

  • Branching out

    Now hiring?

    In a typically gloomy start to February, I'm beginning the month on a slight diversion from usual programming. Tomorrow evening I'll be taking a look at Communisis - a portfolio constituent which reported more good news this week with a further improvement on the already sizable contract with Lloyds. That deserves a catch-up. For those of you purely on this humble corner of the web for a dose of fundamental analysis and some good old-fashioned collaborative reasoning, that might be more up your street. Today, I'll take advantage of the fantastic soapbox that is the World Wide Web to meander on a topic that's increasingly important to me:

    The future

    Running a blog on value investing - looking at stocks, researching companies, speaking to management and, perhaps most importantly, talking to investors from all over the globe through comments and email  - is a great experience. It's also a fantastic learning tool. When I set up the blog, I considered investing an interesting pursuit and a potential 'hobby' of sorts; one of the more expensive ones, I might note, but with that sense of unlimited potential and the possibility to derive real value out of being able to make 'better' judgements than the market at large. I might hazard a guess that most investors get a sense of satisfaction from that element; it's a sort of intellectually competitive drive as well as a desire to simply make money. (more…)

  • On ideas

    When the going gets tough

    A few weeks ago Red posted a tweet that elicited a bit of a chuckle and a dose of introspection:

    As someone who started investing in early '11, I feel like the missed the first half of the good times, but I reckon I'm rather lucky to pick it up when I did. Blogs come and go all the time, and I often wonder what the propensity is for continuing a blog if (as I did) the author is hoping to do reasonably well investing, and finds himself either flailing horribly or tracking the market. There's probably a nice dose of selection bias in the bloggers you're reading now having track records of outperformance - if 100 blogs start and their results are determined by coin tosses, if the ones who did badly get bored and leave, you're left only seeing the positives.

    The problem I'm still wrestling with is that much of my performance was determined by those share picks I made right at the start of the blog - at a time when I professed to not knowing much at all. I knew that at the time, and I know it more now - all I can realistically claim to have done right back then were the very basics; low P/E, low P/B stocks and smaller stocks by market capitalisation tend to outperform in the long run. Much of the qualitative stuff stems mostly from experience; experience you don't necessarily have to get from investing, but which allows you to ask much more incisive questions and cut to the really important news more quickly. That's experience I definitely did not have. (more…)

  • Pension Schemes & Investing

    Blast from the past

    I write this as a quick few thoughts on a really good read that was suggested to me by Jon on Twitter. I'll write up a longer post on portfolio matters tomorrow, but this deserves some airing!

    Buffet on pensions

    Find the full piece here - it's quite a long read, but worthwhile.

    I don't count myself among the fanatical Buffett fans (I don't really follow any investors religiously, to be honest), but I do very much appreciate both his exceedingly well-tempered viewpoint on companies and the success he's had pursuing it, and the broadly quality/value based approach that I find myself inching further and further closer to, though from a admittedly distant base. At the moment I'm enjoying reading his letters to shareholders, handily compiled at £2 via eBook, and which I consider an absolute steal for the thoughts its provoked - even though I'm only a little way through.

    If you haven't the time to read the piece, I'll pick out a few choice quotes that made me chuckle, or think, or both. Buffett is writing specifically on pension plans and how they should be managed to best meet their (scarily advancing, as we see now and have seen) liabilities, but the points are relevant to investing generally. After all, investing for a pension pot is simply a long-term investment strategy. Not that you'd believe it with some companies! (more…)

  • On housing

    A slight detour

    So I guess housing isn't really 'investing' is the normal sense of the word, but it is an investment lots of us make at some point in our lives. If I might be so shrewd as to suppose that most of the people visiting a blog on investing are probably tilted towards the wealthier side of average, I might also suppose that most of readers probably have a passing interest in house prices. I don't particularly want to make a habit of dwelling too long on diversions like this, however interesting they are, but a report by the Royal Institute of Chartered Surveyors popped up in my inbox yesterday and sent me off down the route of thinking about housing as an investment once again. Penning my thoughts helps me think about them more clearly, which is especially helpful in a market as ludicrously convoluted and dubious as housing. I'll try and keep it brief.

    The universal truth

    Everyone has an opinion on house price, and I think it's probably one of the realms where people are particularly reticent to change their opinion. Why that is, I'm not completely sure. I think it has something to do with the fact that a house's intrinsic value is so hard to identify. A company is essentially a stream of cash flows - so your two factors in doubt are your estimation of those cashflows and the rate at which you want to discount them. It's fairly easy to identify factors that affect either of those things. A house seems much more difficult. The value of a house is a weird combination of the land, labour and materials, the market into which you are selling (it's like trading a small cap share with tiny volume - it's noisy) and, crucially, the expectation of future prices. That last bit makes housing inherently speculative.  (more…)