The boiling frog parable is often used as a metaphor for people's inability to react to threats that arise gradually. The story goes that if a frog is placed suddenly into a pot of boiling water, it will jump out. However, if the frog is put in tepid water which is then slowly brought to … Continue reading are we the proverbial frog in a pot?
weekly wrap 27/10/17
"As a money manager, I have frequently looked at an investment decision that I felt had a high probability of success on a three-year horizon, but about which I had many doubts on a six-month time horizon. Institutional investing, as it is structured today, simply makes it more difficult to make a high-conviction, long-term decision … Continue reading weekly wrap 27/10/17
weekly wrap 20/10/17
“You gain more by not being stupid than you do by being smart. Smart gets neutralized by other smart people. Stupid does not.” - Phil Birnbaum book of the week Shoe Dog, Phil Knight - memoir by the founder of Nike. I found the book extremely difficult to put down, predominantly because you're always waiting … Continue reading weekly wrap 20/10/17
investing in a tortoise
In a world of artificially low interest rates, public market investors seem to be rewarding one thing: growth. However, I have always had a preference for lower growth companies with extremely stable/predictable revenue streams, great cash conversion and a sensible capital allocation policy. This investment philosophy describes the type of investments many Private Equity firms target … Continue reading investing in a tortoise
weekly wrap 06/10/17
“Risk means more things can happen than will happen.” - Elroy Dimson stock news ITL Health Group (ASX:ITD) announced they sold their Custom Pack business for $14.4m & they will be in a net cash position of ~$10m post the transaction. This is interesting when you consider it currently has a market cap of … Continue reading weekly wrap 06/10/17
the predictive power of the yield curve
The vast majority of posts on this blog will be centered around my investment philosophy which is 99.9% bottom up, value based, fundamental analysis. However, there are a few macro indicators that I keep track of in order to take the "temperature" of the overall market. While I would never base an individual investment thesis or overall … Continue reading the predictive power of the yield curve
weekly wrap 15/09/17
"Market efficiency depends on the relative proportion of market participants who are making investment decisions with their prefrontal cortexes to the ones relying on their more instinctive faculties, such as fight-or-flight" - Andrew Lo As you may have guessed from this weeks quote, I've been reading Adaptive Markets recently and I think it's a great synthesis … Continue reading weekly wrap 15/09/17
it’s the end of the world as we know it…
Apologies in advance for the bait-and-switch, but this is not an article in which I warn you about imminent financial Armageddon. However, listening to the famous R.E.M. song over the weekend got me thinking - what if the (financial) world did actually come to an end tomorrow? Broad-based market sell-offs are inevitable and it's … Continue reading it’s the end of the world as we know it…
why long term thinking is crucial
With the market becoming increasingly focussed on the short term earnings outlook for a company, I thought it would be worthwhile stepping back to first principles: how do we determine what a business is worth? The idea of a stock being worth the present value of all the future cash flows it would generate was … Continue reading why long term thinking is crucial
weekly wrap 01/09/17
"The most common mistake investors make is not thinking about everybody else. Look at the Internet stocks. Everybody thought they alone discovered the Internet. They failed to realize that lots of people had the same insight yesterday and had already bid prices up to ridiculous levels" - Richard Thaler book of the week Zero to … Continue reading weekly wrap 01/09/17
