Jump to content

perulv

Member
  • Posts

    86
  • Joined

  • Last visited

perulv's Achievements

Newbie

Newbie (1/14)

  • Dedicated
  • One Year In
  • Week One Done
  • One Month Later

Recent Badges

0

Reputation

  1. It seems like we are at the tipping point where the cheapest energy is renewable, and the best cars are electric (and most economically sensible, depending on the subsidies and taxes. But we are getting there, at least in Europe). But given that premise, what should we invest in? One thing is avoiding companies that have no earnings and nothing more going for them than "being a green/ESG stock". I bought shares in First Solar and Solar Edge in 2015/2016. Both (had) made money , had little debt, and seemed to me to qualify as a value investment. And marked leaders in a growing segment. They have had a very different development, both in earnings and in stock-price. Solar Edge has been growing their earnings steadily, and the stock-price went from 15 to 300. Which probably makes it highly over-priced now, but even just looking at the earnings these companies took a different path. My theory is that First Solar is suffering from what is shown in the graphs in the first post here, making less and less money per solar panel. But Solar Edge seems to have avoided this somehow, being more in a "selling shovels in a gold rush" situation, selling a small (?) but essential component in the solar-setup. Is it possible to identify companies with the "Solar-Edge characteristic", companies that participate in a growing market/megatrend with some ability to keep their profit-margin? Or is it just luck, and will be evened out by competition, and I should know this if I had studied economics?
  2. up 79% (in my local currency, NOK). The biggest positive contributors were SEDG (up over 300%, trimmed it multiple times) FSLR (77%) SQM (83%) WAF (81% since I bought in april), biggest negative Aggreko (down 24%). Right now, it looks like my effort to find renewable-related companies that also fit the quality-company metrics (actually making money, not too much debt, good ROA, decent EV/EBITDA) have paid off. But then again, everything remotely "green" have gone way up, quality or not. While I still believe that decarbonization and all that comes with it (EV, power production, power grid management, storage etc) is "the future", I have not bought any stocks in companies related to that lately because of the crazy pricing. And I must probably realize that a fair part of this years gains are luck, or at least not very reproducible. The gains are mostly due to multiple expansion, not increased earnings. edit: my strategy for 2021 is pretty much sit on my hands for now. I bought several stocks in the last few months that are not in the "renewable-field", including CIEN, SIMO, INTC (which I have very mixed feelings about). I will buy if (I think) opportunities arise, but some of my worst decisions seems to be immature selling.
  3. Looks interesting with revenue growth, stable margins, and high ROIC. This thing deserves a thread of its own, IMO. Maybe this is similar to MU, cyclical, long-term trend is upwards, buy when others are looking the other way? SIMO’s memory controller business is a much better business than MU, imo, because there is less pricing fluctuation and it is fabless. Gross margins are fairly stable around 50%, so it’s not as good as a CPU or analog business, but much better than totally commoditized segments like memory. I can start a thread and write a few lines, but my thesis isn’t deep: it’s just an OK to good and somewhat lumpy business that is cheep. Every time I look at SIMO, I think "why is't this priced higher?". I first bought some shares of it in 2017, at $42. My "analysis" back then was (I wrote it down) : "Looks like a solid company. Makes money, has no debt, is in a market that has a future. Is the market leader?". Today I still agree with my thesis, and now it is priced at $39 ??? In a crazy market where "everything" is priced to perfection, I just don't get why this has been more or less flat for five years. My main reason for not buying some more SIMO is that often when I think Mr. Market is wrong, it turns out there is some valid reason for the price being what it is...
  4. Just like the dot com bubble, the underlying trend is imho "not wrong". Just like you were right if you thought "software is eating the world" in 1999, energy is going to be gradually decarbonised. And there are renewable-companies that make real money, and tick my quality-company-boxes (ROA, debt-levels etc). That said, I totally agree that most/all of these now seem to be very high priced. I have sold parts of my SolarEdge-position at several occasions over the last couple of years, and each time seen the price rise higher. While earnings have risen 4x ish since 2017, the price has risen 20x, bringing EV/ebit to around 70 or something. I keep looking for companies that will benefit from the increase in renewables (ideally in a sell-shovels-in-the-goldrush way) and are still reasonably priced, but that search has not returned much lately.
  5. I've been buying Intel in the last days. The low price, high ROA and long term steadily-ish growing earnings was just too tempting. I have no idea if and/or how quickly AMD will continue to steal market share. But then again, that marked will probably continue to grow.
  6. Regarding #1, higher profit margin. I have little to none formal business/economics education, so perhaps some of you can help me here: I have a hunch that there might be some rule on the proverbial first page of every book on the subject, that says that if a business/industry have such a high margin, competition will make this go away? Which I think is the point several of you mention. That if there is such a "permanent" high profit margin in e.g. FAANG type companies, healthy competition etc should remove/ normalize this?
  7. In this post the argument is that "if we normalize profit margins (...), we can see that stock prices today are more expensive than they were 20 years ago at the peak of the Dotcom mania." And that the profit margins could/should revert to mean. These are not new thoughts, but I would like to have my thinking validated (or invalidated) by people here on the forum: Is is not reasonable to argue that some (groups of) companies today can/will/should have a permanently higher profit margin that was normal earlier? Typically FAANG type companies. Or at least that such companies are more common now than earlier? Software eats the world, software scales. An on average lower interest rate gives lower discount rate for DCF which means that a higher multiple now than earlier is "correct"? I am not arguing if todays valuations are too high or not, but just trying to see if this thinking makes sense. Would it be correct to say that ignoring these two factors makes us miss opportunities to invest in "wonderful companies at fair prices", because we fail to see that the price is indeed fair?
  8. I know this is pointing out the obvious, but it would be interesting to see the same graph for a parallel-universe Europe where we did not put in place the most severe restrictions on movement etc since WW2. Attached is a graph of hospitalizations due to covid-19 in Norway. The shut-down went into effect 13th march. (edit: smaller picture-size)
  9. I voted "yes, low conviction". On the one hand, I also think that if "everybody" thinks the market will go down, this is priced in an it will not. On the other hand, I was in the "the market is overpriced" camp, and a 20-30% drop would simply make it more reasonably priced to how the world looked in January. Another 20-30% drop to adjust for how the world looks today, including plenty of fear and almost literally blood in the streets, does not seem that unlikely to me.
  10. “Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.” - Antoine de Saint-Exupery
  11. Maybe not "a ton of cash" but Solar Edge (SEDG) and Silicon Motion (SIMO) are both companies with little to no debt, good ROA and in areas of business that are probably not less important in the future. SEDG is probably not considered cheap yet, but I am thinking of buying (more of) both if they continue down.
  12. Actually, it was an interesting article in our regional paper today, where the local hospital (Helse Vest, Norways second largest) had made some prognosis based on the current social-distancing measures. It is in Norwegian, which I know you kan read John, but it is also behind a pay wall :/ (https://www.bt.no/nyheter/lokalt/i/50qVoK/haukeland-venter-under-200-koronapasienter-paa-topp) I've attached a couple of screenshots. The main idea is that "the curve is actually flattening" (Edit: "our prognosis indicate that this will actually flatten the curve enough" is probably a more correct description) , and never reaching the limit of intensive-care beds. This should probably taken with several grains of salt, but promising nevertheless.
  13. Why wouldn't it be practical? IB offers accounts to Norwegian citizens according their website: https://www1.interactivebrokers.com/en/index.php?f=7021 I went into the application process and Norway was one of the choices for your country of residence. If they have a brokerage license there it seems pretty likely you'd be able to transfer your existing accounts to them, or at least wire the money. I suspect any fees charged for a wire would be outweighed by the savings in margin very, very quickly. You are right. Thanks for pointing this out to me, I'll check it out.
  14. I live in Norway and am a Norwegian citizen, so I dont think IB is an (practical) option. I ended up selling some USD at the (for now) crazy rate of 11.5 NOK pr USD, hedging about half the value of my USD portfolio. I tend to mess up these attempts at hedging, time will show how it turns out.
  15. My local currency is NOK (Norway), and it is totally crushed lately (https://www.xe.com/currencycharts/?from=USD&to=NOK&view=1M). If I buy stocks in USD now and things become somewhat normalized, I might lose 20-30% in currency-fluxuations. I know that this is always the risk of buying in a foreign currency, but this situation seems extreme. I can buy by loaning in USD in my online brokerage account, but the interest is high (7%). This would cancel out the currency-risk, at a fixed price. Would you do this today? There are companies that are starting to look attractively priced, and my thinking is that some reversion to the mean is more likely than not. Or at least that a known 7% loss is the lesser of two evils right now. Last time I looked into it, I did not find better means of currency-hedging (for the small positions I take). (Edit: the flip-side is of course that my USD positions have been worth 30% more for the same reason.)
×
×
  • Create New...