What stocks will make their owners rich over the next generation?

[rkbabang]

i googled BH. i got bunch of titties in image seach. and biglari holdings. no berkshire :D

 

conclusion: google more titties, get more accurate results.

 

I just tried it, google then hit images.  That is odd.  What does google think BH stands for?  Big Hooters?

 

[Buckeye]

Weird, you're right.  It must have something to do with that Maxim purchase:)  I was referring to the search bar within the Google finance page.

[Buckeye]

Biglari's Hookers? Wow, this was such a great thread until I derailed it.  I will go back to just reading the posts:(

[yadayada]

i googled BH. i got bunch of titties in image seach. and biglari holdings. no berkshire :D

 

conclusion: google more titties, get more accurate results.

 

I just tried it, google then hit images.  That is odd.  What does google think BH stands for?  Big Hooters?

in dutch it stands for bra

[roughlyright]

My vote goes to Senomyx (SNMX). The company's patents and its market position sounds simply great. It has a small market cap today,  at $300 Million. If they really execute on their plan and I can see this becoming a hundred bagger.

 

At this point, it is lot of speculation. But the potential is certainly there. I cannot possibly see a 20 billion dollar company like Tesla becoming a hundred bagger. Size becomes a obstacle in itself, just like Berkshire cannot continue to grow at the same rate it did in the last 20 years.

[fareastwarriors]

If we knew which companies will be 100x + baggers, we will all super rich billionaire investors...

[randomep]

If I knew I'd be a stockmarket genius....

 

we're all trying to (blindly) guess what it is , that's what this forum is about.....

actually most people on this forum seem to have shorter term strategies. i guess trading is the new holding.

 

I've noticed that too, but berkshire (and Fairfax) is about holding good businesses long term, I wonder how the board members can seem to agree with the logic but don't follow through in their actions....

[merkhet]

Cognitive dissonance exists everywhere...

[randomep]

Cognitive dissonance exists everywhere...

 

Ok my cognitive dissonance from not realizing this is gone.... I feel much better.....

[investor-man]

If I knew I'd be a stockmarket genius....

 

we're all trying to (blindly) guess what it is , that's what this forum is about.....

actually most people on this forum seem to have shorter term strategies. i guess trading is the new holding.

 

I've noticed that too, but berkshire (and Fairfax) is about holding good businesses long term, I wonder how the board members can seem to agree with the logic but don't follow through in their actions....

 

It's a "value investing" board. Greenblatt and Pabrai don't hold stocks "forever". From my perspective, value investing means fundamental analysis is the most important factor in making an investment decision. The time required for an undervalued stock to reach its intrinsic value can take a while so you're forced to hold a stock for a long while (taxes can be a factor too), but this is just an unfortunate part of life, not an important part of value investing

[randomep]

If I knew I'd be a stockmarket genius....

 

we're all trying to (blindly) guess what it is , that's what this forum is about.....

actually most people on this forum seem to have shorter term strategies. i guess trading is the new holding.

 

 

I've noticed that too, but berkshire (and Fairfax) is about holding good businesses long term, I wonder how the board members can seem to agree with the logic but don't follow through in their actions....

 

It's a "value investing" board. Greenblatt and Pabrai don't hold stocks "forever". From my perspective, value investing means fundamental analysis is the most important factor in making an investment decision. The time required for an undervalued stock to reach its intrinsic value can take a while so you're forced to hold a stock for a long while (taxes can be a factor too), but this is just an unfortunate part of life, not an important part of value investing

 

I agree value-investing isn't about holding stocks forever, especially if you want say 20% returns. Almost no stock can return 20% in the long term. So you buy something undervalued and then when it reaches intrinsic value in a reasonable time you move on. Thus achieving very high rates of return. Very high rates of return requires holding for short term. I am sure when Buffett got started in the early 50's his holding time wasn't long either. HOWEVER, you have to have a fundamental long term view of the company you are buying.  When I see someone buying an option on this board (no offense plz don't flame me) to magnify returns I really think that is short-termism. 

 

Peter Lynch talks about investing for the 10 bagger. But someone here talks about an option returning a 10 bagger. That is totally different. An option has 100% downside which happens often, and sometimes you can go 10 bagger. You buy ten options with one 10 bagger and you virtually have broken even. But that's not what Peter Lynch meant, he invests with little downside and then occasionally hits the ten bagger.

 

 

[ERICOPOLY]

If I knew I'd be a stockmarket genius....

 

we're all trying to (blindly) guess what it is , that's what this forum is about.....

actually most people on this forum seem to have shorter term strategies. i guess trading is the new holding.

 

I've noticed that too, but berkshire (and Fairfax) is about holding good businesses long term, I wonder how the board members can seem to agree with the logic but don't follow through in their actions....

 

Fairfax recently dumped their good businesses WFC, JNJ, etc...

 

So I'm not sure they are about holding good businesses long term.  Not that it matters, as long as their trading is working for them, which it has so far over their history.

 

Or perhaps you meant people hold FFH the stock for a long term... which is just a stub for the trading that goes on underneath the cover.  That too is okay.  Buy low and sell high -- it's trading.

 

I think a self affirmation (ala Stuart Smalley) is in order -- it is okay to trade.  It's okay.  You'll still be a good person.

[sleepydragon]

how about BYD or Disca?

[Fat Pitch]

Surprised no one mentioned DaVita. There's about 5% organic growth as your tailwind for probably the next 20 years and the opportunity for the company to reinvest their cash flow at 12%+ returns with the ability to pivot into other healthcare markets. Not much has to happen to realize a satisfactory return.

 

Not to mention it is trading at ~9% of FCF and it is somewhat recession proof. Plus it is easy to see this market turning into a duopoly.

 

[jouni1]

i understand trading the valuation gap. if you can get over 20% annually with that, good for you. i'd be extremely happy with 12-15% a year.

 

in an ideal world with reasonable taxes i probably would do things differently. sell when it reaches fair value, even if i consider the business to be of exceptional quality.

 

but now when i have that +50-80% "gain"(on paper) from mr market finally agreeing with me, the last thing i want to(or am able to) do is trigger capital gains taxes and find an investment that will pay my taxes and return more than the original investment would have.

[yadayada]

cant you put it in an account where you have to pay taxes later? That way it doesnt really matter.

[jouni1]

in our socialist utopia i can do that if i want to get at the money when i'm at the age our government thinks it's ok to retire at. right now it's 65 or 67.

 

in 40 years, it'll probably be over 70, maybe 80. my plan is to get where i want to be and get out :D sooner the better. it'll probably be a few decades tho.

[ukvalueinvestment]

Surprised no one mentioned DaVita. There's about 5% organic growth as your tailwind for probably the next 20 years and the opportunity for the company to reinvest their cash flow at 12%+ returns with the ability to pivot into other healthcare markets. Not much has to happen to realize a satisfactory return.

 

Not to mention it is trading at ~9% of FCF and it is somewhat recession proof. Plus it is easy to see this market turning into a duopoly.

 

Totally agree. Was going to mention it as well.  Didn't realise it was 9*FCF.

 

 

[Uccmal]

 

 

I agree value-investing isn't about holding stocks forever, especially if you want say 20% returns. Almost no stock can return 20% in the long term. So you buy something undervalued and then when it reaches intrinsic value in a reasonable time you move on. Thus achieving very high rates of return. Very high rates of return requires holding for short term. I am sure when Buffett got started in the early 50's his holding time wasn't long either. HOWEVER, you have to have a fundamental long term view of the company you are buying.  When I see someone buying an option on this board (no offense plz don't flame me) to magnify returns I really think that is short-termism. 

 

 

 

Randomep, You knew this was coming. lol.

Your wrong about the options , or the thinking behind them, at least.  I can only speak for myself.  I only buy Leaps on stocks I perceive as being  significantly undervalued.  I have analyzed, and in some cases (Ffh, Bac, Wfc, Jpm) held the stocks for some time already when a dislocation appears.  Options are simply leverage.  However, when you take them on, you have to think short term in the context of that undervaluation - if short term is considered less than 2 years.  You also, have to be prepared to take gains when they arrive, and re date the options as necessary, should they lose value.  Probably it can best be described as a short term strategy within a longer term goal. 

 

I can absolutely guarantee that if Buffett were starting out now he would use Leaps.  And FFh trades frequently.  The only time Prem likes " the guys in charge" is when they are left holding the bag for a few years. 

 

That said, when I come across a company I really like for the long term, that pays a dividend I will keep it.  i.e seaspan for 5.5 years. 

 

 

 

 

 

 

[PatientCheetah]

 

 

I agree value-investing isn't about holding stocks forever, especially if you want say 20% returns. Almost no stock can return 20% in the long term. So you buy something undervalued and then when it reaches intrinsic value in a reasonable time you move on. Thus achieving very high rates of return. Very high rates of return requires holding for short term. I am sure when Buffett got started in the early 50's his holding time wasn't long either. HOWEVER, you have to have a fundamental long term view of the company you are buying.  When I see someone buying an option on this board (no offense plz don't flame me) to magnify returns I really think that is short-termism. 

 

 

 

Randomep, You knew this was coming. lol.

Your wrong about the options , or the thinking behind them, at least.  I can only speak for myself.  I only buy Leaps on stocks I perceive as being  significantly undervalued.  I have analyzed, and in some cases (Ffh, Bac, Wfc, Jpm) held the stocks for some time already when a dislocation appears.  Options are simply leverage.  However, when you take them on, you have to think short term in the context of that undervaluation - if short term is considered less than 2 years.  You also, have to be prepared to take gains when they arrive, and re date the options as necessary, should they lose value.  Probably it can best be described as a short term strategy within a longer term goal. 

 

I can absolutely guarantee that if Buffett were starting out now he would use Leaps.  And FFh trades frequently.  The only time Prem likes " the guys in charge" is when they are left holding the bag for a few years. 

 

That said, when I come across a company I really like for the long term, that pays a dividend I will keep it.  i.e seaspan for 5.5 years.

 

I am very interested in learning how you gauge timeframe. Do you think in terms of upcoming events? Business at an inflection and early signs of improvement are present? Abnormal stock behaviors - e.g. breaking from a long term downward trend? Thank you for the input.

[txlaw]

I have a couple of ideas -- but why would I tell you guys about them?  ;D

[ukvalueinvestment]

Why wouldn't you?

[Palantir]

I think this is inevitably going to be a software or technology company.Pretty much no other business has the requisite growth rates, margins and ROI as software.

[txlaw]

Why wouldn't you?

 

Because I have to load up on them before anybody knows about them.

 

I'm just joking.

[Aberhound]

I own Banco Santander so I was looking at its competitor BBVA for a comparison. Very interesting. BBVA adopted a new control system designed by Accenture that won the Best Bank award in 2013 for that category. The system allows real time financial information. Second, they purchased Simply based in Oregon which is a banking interface as revolutionary as the IPhone. There is a website with an explanatory video. BBVA Compass has 785 branches across Southern US and the financials were unusually easy to read with improving numbers. Is this a result of the Accenture system?

 

BBVA is similar to SAN with a big expansion across Latin America. The financials are much worse than SAN but improving. Perhaps an innovative bank in a hated industry with geographical spread from a depressed valuation might hit 50 fold gains?

 

Idea #2 is Prem's new India fund. India hits demographic peak in 2035 so investing now is like investing in US 20 years before their demographic peak in 1999.

 

Idea #3 is to create a startup for listing on the CSE the Canadian Securities Exchange which is run by and for entrepreneurs with dramatically lower costs. Trading exploded with the marijuana boom. Perhaps we can convince Sanjeev to start a junior BRK allocating capital starting with a marijuana supplies company which is scalable. It is way easier to hit 50x starting from pennies in a hot new industry which will soon enjoy $200B revenues. It would be instructional to create a business plan thread for the idea called "IPOs for Sanjeev" to take advantage of the astute business minds on this board and to encourage him to take the leap. The exercise might help pick out the types of business models most likely to achieve the 50x goal. Most often the opportunities requires capturing a wave. So you need both a good model and an industry with rapid growth like Solar City but with a better moat. In the 1930s the richest man in UK made his fortune taking over failing companies then putting in place management and new business plans. Sanjeev would be good at that. The ability to disrupt and the speed of change is increasing so a junior BRK model is more likely to achieve the 50x goal. SoftBank enjoyed such gains by early investments in Alibaba etc. most of which were private at the time of investment. We need Sanjeev's public vehicle to be able to share such gains.