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Frustrated.... I am running out of ideas


muscleman
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I am looking for either high growth companies selling at a reasonable P/E(such as 25% growth at 12 PE), or 1-foot hurdle turnaround companies, where the main business is still making a lot of money, and it is not costly to close the unprofitable peripheral business lines.

I do not want to buy businesses that requires a transformation to make money. (SHLD).

I do not want to buy businesses that's been heavily promoted by its managers. (Mart resources).

I do not want to buy technology companies unless it is making money and it is dirty cheap. (AAPL in 1998 and 2013, but not now).

I do not want to buy businesses that requires way too many assumptions about its asset value. (Oil and gas industry)

I am willing to invest internationally, but very carefully.

 

My IQ is average, but I am willing to do hard work to understand complex structures. Please show me 1-2 stunning ideas!  ;D

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I think you should go up one meta-level and figure out how you can make this kind of situation not frustrating, but productive. As Peter Cundill would say, there's always something to do.

 

Go deeper on the stuff you already own, expand your circle of competence, just keep reading up on new businesses even if they're too expensive, because chances are at some point they'll become cheap and if you've done the work ahead of time, you'll be better positioned to take advantage of what might be a short opportunity window.

 

Feeling frustrated, and like you have to do something, tends to lead people to lower their hurdles and buy things that don't meet their criteria, which often results in mistakes.

 

Or just find a new hobby.

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Predictable 25% growth at 12x earnings is not very easy to find right now.

 

If you are willing to moderate your growth requirement to 10-15%, take a look at VIAB and WDR.

 

How many people would call their cable provider or switch if they lost Comedy Central/BET/Nickoldeon/MTV? 

 

What percent of advertising dollars will continue to flock to internet/mobile vs. television?

 

How much does Colbert leaving hurt Comedy Central?  What has been the last big VIAB original content hit since Spongebob?

 

The distribution channels are consolidating, how does VIAB negotiate without sports or a premium channel?

 

I wanted to love VIAB given the 8% annualized share repuchases and dividends.  Cash to shareholders > FCF > NI.  Todd/Ted own it.  All of that being said I just couldn't get comfortable with the questions above.  I think revenue is probably materially lower in five years and if they can't hold a flat topline there won't be multiple expansion. 

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Even Buffett only gets one or two good ideas a year, and some years are unhospital to his strategy (like the year he closed his partnership).

 

Ah yes, I forgot he's only invested in 20 investments in his life right..those punches or something...?  One must remove their ignorance before swinging at one of the 20 fat pitches on their punch card.

 

Someone needs to create a Buffett/Munger expression generator.  Then a little bot for the forum, after a few posts the bot will exclaim "When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever."...BOOM thread shutdown.

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Predictable 25% growth at 12x earnings is not very easy to find right now.

 

If you are willing to moderate your growth requirement to 10-15%, take a look at VIAB and WDR.

 

How many people would call their cable provider or switch if they lost Comedy Central/BET/Nickoldeon/MTV? 

 

What percent of advertising dollars will continue to flock to internet/mobile vs. television?

 

How much does Colbert leaving hurt Comedy Central?  What has been the last big VIAB original content hit since Spongebob?

 

The distribution channels are consolidating, how does VIAB negotiate without sports or a premium channel?

 

I wanted to love VIAB given the 8% annualized share repuchases and dividends.  Cash to shareholders > FCF > NI.  Todd/Ted own it.  All of that being said I just couldn't get comfortable with the questions above.  I think revenue is probably materially lower in five years and if they can't hold a flat topline there won't be multiple expansion.

 

Gray, I have tried approaching the content companies in that way..."how many people would call/switch their cable if such and such channel were take off". 

 

I am happy to debate the matter but I think it's a too stringent way to approach content companies. 

 

Discovery, TLC, TBS, Fox News/CNN, History, ....the only thing a fan is utterly uncompromising about is sports, everything else is probably replaceable.

 

BUT the consumer does want a nice rounded group of options: a Discovery, a Kids, a Comedy, a News, a Movies, a Music.

 

Now Sports is not replaceable but there is a russian roulette game going on where Disney keeps chasing the content costs up and up (a bit like the way Sky used to in the UK) and forcing those costs through the bundle onto everyone & the stock market values Disney and their decade or so of locked up right at a full price.

 

I don't proclaim to have the answer, but I think we need a better way to analyze the content companies than "would I change provider if it was switched off".

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I ran a screen with your criteria (P/E <= 12, 5yr growth rate 25% a year, mcap > 1B): 717 stocks

 

So I'd say there's a lot to look through.

 

Here are a few random ones in the US:

HFC, TRW, TAL

 

 

Thanks! I guess I need a notebook to systematically go over some stuff. :)

What screens did you use?

 

Just ran it on a Bloomberg

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