Hielko

CRM VEEV TXTR STPFQ DDD TWTR NQ VVUS QCOR VJET

Conduril. Solid business but trading at extremely cheap valuation (3.7x P/E, 0.5x PB, 1.6x EV/EBITDA).

+1 on writing your thesis down. Really invaluable.

I think security is possible the biggest problem that Bitcoins face. Fact: the average person is unable to keep his computer secure. Implication: the average person cannot ever keep his bitcoins on his own pc, so they have to rely on third parties, but using third parties negates many of the positives of bitcoins: it wouldn't be very different than using fiat money.

I agree with you to some extent, but I don't think that the average VIC idea has to be average or even that the average analyst can't outperform. It's totally possible that there are large groups of market participants that outperform at the expense of large groups that under-perform. Since there is a lot of dumb money I don't think that would be a crazy premise.

Can you provide some general examples of when the data isn't that great? I've compared with FT screener and some other sites and it seems right more often than not, though FMZ scores show a lot of deviance. Comparing it the the FT screener or other sites is pointless, because they often have the same wrong data. You need to compare it with the financials reported by the company.

I have some experience with the value-investing.eu screener: it's pretty decent, but especially for the very small companies you will need to check if their data is correct. I guess that's true for all databases/screeners.

can you give me detail in the process you look for them ? And how you value them? Hi King, I have been thinking about giving an example. Here it is. I own a company in AU called Jumbo Interactive. I bought it @ 30 cents. The annual report laid out everything very clearly. It is trading at 2.5x P/E before cash. JIN's business is to sell lotteries on the Internet, which is highly scalable. In the last five years, the business has grown just like other online businesses. In normal condition, this kind of business should garner 20x P/E. This is an outstanding business trading at ridiculous price. You see, magic formula wants good business trading at cheap prices. That is simply not enough for me. But the situation is not normal here. JIN's online business hangs on a contract with Tatts, which is expiring at the end of 2014, although the contract will be renegotiated a year earlier. Tatts is a monopoly in the lottery industry which owns the only nation-wide license given by the government. Recently, Tatts launched its own website to compete with JIN. Therefore, the probability that JIN will renew the contract seems low. I believe each of us has different opinion about risk/reward and you can make your own guess. Here is mine. Let's say JIN simply operates until the end of 2014 and then liquidate, the cash will cover more than the current market cap. This is third grade math so I would not give the details here. This is is the bottom line. I personally believe, after some thinking, that there is around 30% chance that the contract will be renewed as it is now. If it is renewed, I will hit a home run; if it is not, I would not lose much. There are also other complications, but I will keep things simple here. This is basically how I make my investment decisions. Hope this helps. Bao, great analysis! A lot of times for micro cap there are issues with corporate governance or even fraud. How do you stay away from such companies? The same way you stay away from fraud and bad corporate governance when you invest in a large cap. It isn't a micro-cap unique problem.

I owned for a while. I can't believe people just sell their shares to caldwell. He is gonna drive this stock to $2.50. I dont understand why you would sell. There are some very good reasons why a big discount exists. High management fees, high trading expenses, high interest rate on their debt, and some questionable investments (related party private company, leveraged gold etf's)

Seems that the average age is significantly lower than your guess. Don't think it's that surprising since this is an internet forum after all.

I'm starting to think my ~50% YTD return is pretty average...

FCF isn't by definition a metric that applies to only the equity, you can also calculate FCF to the whole firm (so without subtracting interest payments).

Can't you transfer the position to someone else? You can always sent some near worthless put options my way!

He doesn't look like a bum in photo that is published in the linked article, and why does he need a car and perfect clothes? Does a car have to provide any additional utility if you can get around without problems using public transport? Do clothes without a hole keep you noticeable warmer? Just because those items would make you happy doesn't mean that it would mean anything for him.

Question is of course what the causation is between the two events (if any!). People stop working and die of boredom, or people are getting too much health issues to continue working and die shortly afterwards?

I could start a new cryptocurrency today, and use the same argument to argue that it's cheap. But I bet you wouldn't be buying it from me even if the 'market cap' would be 1/1000 of the BTC 'market cap'. I think this means that your argument is incomplete at best, and that part of the thesis is not only that there is a future for crypto currencies, but also that Bitcoins are that future. But how many first iteration software technologies/products do you know that were so good on the first try that they didn't get replaced by something better after a couple of years? What happened to the first social network, the first search engine, the first operating system? Are bitcoins truly so awesome that people can't develop something better?

Thought they all didn't do very well, but guess the US funds are having a good 2013.

Seems like the typical 'get rid of some under-performing funds move'

Another interesting article, well done NormR! Always enjoy reading a bit of background on fellow investors, especially forum members :)

What about LON:WKOF? Does trade at a small premium though...

Seems like a better deal than $3B for Snapchat

Anything specific you can recommend from him? I see he has a lot of quarterly/annual reports online.

The kelly criterion gives us a max betting limit, but it doesn't necessarily mean that we should have positions close to this limit. His formula is all about maximizing the growth rate of a sequence of bets, but a stock portfolio is not a sequence of bets: you are betting in parallel! If you are betting in parallel you want to make your bets a small as possible if you can find enough with a good risk/reward ratio.

The idea isn't that auto insurance will disappear-- even if all vehicles are autonomous. It's that premiums will fall dramatically because the probability of an accident has fallen so much. But then payouts will fall dramatically as well. Ok, you have less float to play around with but it doesn't have to spell the end of the industry. Also, shipping and flying are largely automated (correct me if I'm wrong). What has been happening in the insurance sector over there? But a (significant) lower float is very bad for BRK. At the moment $1 in float is basically $1 in shareholder value: every single dollar that they need to repay is a loss.

Tax situations differ for every person, buy you put yourself at a big disadvantage if you buy something that has a high tax rate for you, but a low rax rate for most investors. Sometimes not buying a certain asset class might be the best move: if you indeed need to pay a 45% dividend tax as an Australian on a foreign stock you are basically screwed by the government, and owning a dividend paying foreign stock is just not an option. But you might be able to work around the issue. Buying derivatives (such as options, or CFDs) could be a solution: their pricing does include the expected dividend, but since you don't receive the dividend you don't need to pay the tax and the party writing the option is most likely not paying any dividend taxes. Or maybe you could setup an offshore holding company. If you face high taxes you either have to find a way around it, or just not buy it in the first place.