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My greatest expertise is in the following stocks/industries


Guest cherzeca

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Guest cherzeca

I envision this thread to be an opportunity for posters to identify themselves as possessing what they believe to be relative expertise in certain stocks/industries.  if you want to post to this thread, you should simply set forth stocks/industries in which you think you have done a lot of work and have strong background.  don't be humble.  this will be easier than reading a lot of everyone's posts to sort through everyone's wheelhouses.

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Guest cherzeca

so instead of looking at discussion topics and investment ideas, I thought it would be more productive to look at posts by poster.  so if I know that x poster presents as someone who purports to understand y stock, it makes sense to check poster x posts rather than just look at y stock posts.

 

that's the idea, to try to rationalize the search process on this board.  I am generally more interested in what certain posters have to say than in subjects that all posters post on.

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I know a little about a lot and a lot about a little. As such, my portfolio is almost always concentrated with top 5 or so ideas between 50-75%(and rarely changing), but the other 25-50% being dozens of ideas, most of which are for shits or just trackers or entertainment pieces. Those 5 or so companies I probably know as good if not better than anyone else. The rest, I probably know less than most. There is almost no rhyme or reason outside of the common threads: high insider ownership, hard assets often of irreplaceable or one of a kind quality, conservatively run with robust financial profile.

 

I know some about real estate, but thats pretty useless right now lol. So, my greatest expertise is in waiting for something to catch my attention and then really going overboard on it. Not necessarily industry specific.

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ok, I'll bite.  My disclaimer is that the areas I should be most knowledgeable I seem to have the least conviction.

 

I have an educational background in electrical and computer engineering.  I worked with analog an digital control systems at a nuclear plant for 9 years.  I earned my PE license in Power Systems.  I also have a Masters degree in finance.  My current job is related to risk management on the natural gas side of the business.  I am familiar with regulations for natural gas distribution and transmission systems.  I should note that Berkshire Hathaway owns the longest NG pipeline in the country.

 

I'm an avid reader and enjoy books about corporate stories as well as behavioral finance/economics/psychology.

 

I'm here to learn and hopefully have something meaningful to contribute here and there. 

 

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One of the biggest risk in investing is knowing too much about too little, Imo.

 

Just to rehash Spek and Gregmal - I don't think great analysts are great investors. I'm sure many on the board had experiences (me included) where they knew a lot about a stock, and were right in the analysis but still lost money.

 

This thread would be great for learning, but I do not think it would be conducive to our annual performance.

 

However, most of my days are speaking with experts on different topics, which I find enjoyable. I hated studying, but learning is beautiful.

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Right, there was an interesting story I read somewhere about foxes and hedgehogs and forecasting. Basically the evidence seems to be that when it comes to forecasting, foxes (generalists who piece together information from various sources) tend to do much better hedgehogs (specialists who rely on their superior knowledge about something very specific) for whatever reason. What this means for investing I think is that trying to identify experts on a certain company/industry and blindly following their advice is a very dangerous strategy.

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Right, there was an interesting story I read somewhere about foxes and hedgehogs and forecasting. Basically the evidence seems to be that when it comes to forecasting, foxes (generalists who piece together information from various sources) tend to do much better hedgehogs (specialists who rely on their superior knowledge about something very specific) for whatever reason. What this means for investing I think is that trying to identify experts on a certain company/industry and blindly following their advice is a very dangerous strategy.

 

Pareto principal?

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I'm originally an oil and gas engineer by profession. Investing using that knowledge has been not helpful however. Easily my biggest loss was a large position in the distressed debt of a junior oil sands company. I believed there was a relatively simple solution to the issue they were having, that they would implement it, production would grow, and they'd be able to refinance the debt.

 

I still think that solution would have worked, but they either didn't think of it or ran out of cash prior to implementation. Either way I loss 100% of the investment. Compounding that money at the same rate as the rest of my portfolio since then produces a very painful result. I was both overconfident and wrong, and the overconfidence caused me to size the position too large.

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Guest cherzeca

there was a recent post about the effectiveness of this message board, pointing out that good research and insight on a topic/stock is hard, and therefore rare, while many more posts can appear on a topic/stock precisely because they are not insightful, but easier and quicker to post. 

 

so I can use this message board to read by topic/stock, and on that topic/stock parse the rare wheat amidst the voluminous chaff, or I can go to this thread to find those within a particular topic/stock who cite a strength of understanding on that topic/stock, and read their posts on that topic/stock more carefully.

 

so, to take an example, on the GSEs, a thread with over 15,000 messages on this board, doesnt it make sense to see, before reading these 15,000 posts, which posters proclaim to understand the topic/stock? 

 

so far, y'all dont seem to agree with me on this approach.  I guess we are all above average, or those who have expertise (as opposed to prescience, which is something none of us have) are too reticent to admit to it.

 

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so far, y'all dont seem to agree with me on this approach.  I guess we are all above average, or those who have expertise (as opposed to prescience, which is something none of us have) are too reticent to admit to it.

 

I agree with you wholeheartedly.

 

I think the board is uninsightfully insightful - which makes it useful.

 

I use this board to understand two angles of a particular story and figure out the third angle

 

It also allows me to understand the market participants, the buyers, and sellers - so I can see if I have an edge.

 

Therefore if people are looking at this a board to subs as one's analyst, or to find "great research" then I think they will be severely disappointed. However, if you are looking to understand the current story on stock and have smart people to intellectually (most of the time) disagree with you on a topic, then this board is great.

 

This board is greater than the sum of its parts, and frankly, if people do not appreciate this fact, then I not sure what to say.

 

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Guest cherzeca

Cherzeca, it may be prudent to recall WB's advice.

 

Temperament is more important than intelligence in investing.

 

not looking for investment advice as much as research, or opinion founded in research.

 

this site suffers from the perverse inventive that good posts are hard to write and therefore scarce, while crappy posts are easy to write and therefore plentiful. I was just trying out an idea for what amounts to a user search tool to figure out whose posts I should read on which topic.

 

I think VIC suffers from a related problem btw.  in theory all of the pitches should be well researched.  but I found in my case, and likely in many members' cases, the necessity to post two write-ups a year resulted in many satisfy-the-requirement pitches.  so it was hard to distinguish between good and bad research, at least until you ended the pitch read.

 

edit:  going back to my GSE cubbyhole...[sighs]

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Lululemon. Their competitive advantage is transformational coaching. No analyst seems to get that. However, the multiple has always been too high for me since I first discovered how great of a business it is. I started www.proxyactivism.com with the help of the guy who coached Chip Wilson to build Lululemon and want to create more of those kinds of cultures/businesses with public companies. As the COO of another huge company told me (which I won't name) - it's the last bastion of alpha since it's low hanging fruit that gives you exponential returns and most people have no desire to do it or don't believe it's possible.

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Most folks are just trolling for the guaranteed double, in the next 1-3 months. An unrealistic expectation.

Because if you actually knew this .... why would a good capitalist, not just keep that valuable knowledge entirely to him/her self? 

 

Best we can hope for is an insight over each of the short, medium, or long term. Some industry specific, that reflects the industry. Some anecdotal, that reflects observation. Some global, that reflects cultural differences. Some from actual business owners, running private businesses. Because for all, it is better to find out that our beloved 'idea' is a POS, ... before we try to apply it.

 

Ideally, the aim is to avoid the stupid losses. Your 'thesis' was utter sh1te. Or mostly correct - but badly timed.

Hopefully, you make more than you lose after costs, and more than you would - had you simply held the Exchange Traded Fund Equivalent (not the index). And periodically, continually keep taking money off the table.

 

There are many very skilled contributors on this board, and many reasons for contributing. Average EQ is high.

Contributions also have a way of getting into industry policy, that we all benefit from  ;)

But if a poster is simply trolling for their next 'tip', there are better places.

 

SD

 

 

 

 

 

 

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In one of his books, Peter Lynch warns about being compelled to invest in certain fields due to our previous experience or "expertise".  Quite a few VIs got burned in the past few years as they have done well in financials post-2008 and then kept going back and trying to invest in these companies even when the catalyst was gone.  There are also all these expert analysts that keep grinding water on certain companies because that's their area of expertise, even though there's nothing there.

 

 

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Lululemon. Their competitive advantage is transformational coaching. No analyst seems to get that. However, the multiple has always been too high for me since I first discovered how great of a business it is. I started www.proxyactivism.com with the help of the guy who coached Chip Wilson to build Lululemon and want to create more of those kinds of cultures/businesses with public companies. As the COO of another huge company told me (which I won't name) - it's the last bastion of alpha since it's low hanging fruit that gives you exponential returns and most people have no desire to do it or don't believe it's possible.

 

That’s probably one of the most valuable tidbits I look for in the board. I had a chance in investing in a yogurt company - and I was thinking why the large food companies in the world can’t crush him - it’s because of machinery. It’s like there’s no incentive for large companies to work in the niche, because they would have to build another facility to compete. Almost like how processed food companies don’t compete with the health foods in the world, since their machines are designed to process fructose and not natural sources of sweetness.

 

I wish the board was more like this - finding hidden assets.

 

Let’s face it - many can run a dcf or sotp valuation.

 

Edit: the yogurt company recently cleared a 1B valuation - probably more - not sure.

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This is a great topic. Look forward to seeing more insights from people in their unique field!

 

So here’s my input. I should warn everyone, I don’t have any new ideas, these are the same companies I’ve mentioned on here for the last 5 or 10? years :) with maybe one exception.

 

I’m an architect so these are all insights in the design and construction field. My approach is finding companies that will be around in 50 years from now with a similar strong moat and not susceptible to being disrupted by new technologies. And be ok to pay for the quality today.

 

Simpson SSD

I feel like a broken record talking about this, It’s been anywhere between 50-75% of my entire portfolio. Residential builders and structural engineers use the name like one uses the word Kleenex and google. When we build a house, it’s just a given that all the connectors and anchors will be Simpson clips - just ask any structural engineer.

New wave: Current increased concern about carbon (wood is the perfect material), and resilience for earthquake and hurricane preparedness at the forefront.

I think I’ll still see Simpson clips in house construction in 2070.

Risk: very correlated (50%) to housing starts! Maybe disruption by future custom printing of hardware by AI?

 

Autodesk

For architects in US this is another given. It used to be with Autodesk Autocad for many decades, now no one uses Autocad (2D) but uses Autodesk Revit (BIM) which is 3D modeling as of 2008~. Architects have learned the program over a decade so for a new software to be adopted it would have to be 50% or 100% better, it wouldn’t be worth switching for something only 10% or 20% better. Contractors and owners have incentive to use it because the design drawings are in Revit. Public agencies take a very long time to change, most are still using CAD 2D for standards. New 3D Revit standards for public agencies could take another decade or a lot longer. I think I’ll still be using Autodesk in 2040 (unless Adobe buys out Autodesk:))

Risk: ADSK just always seems so very expensive! 

For me, I’m not as sure how to value this. I held it for a few years, sold out last year - big mistake.

 

Adobe

Similar to Autodesk, I’ve been using the Autodesk suite of software religiously for more than 20 years and in school before that. But for the architecture field it’s not as essential as Autodesk so not as high conviction. Adobe paved the way and showed how amazingly profitable the subscription model is. Autodesk pretty much copied what Adobe did, so it was like seeing the future before it happened. If I ran Adobe I’d buy Autodesk, they have great overlap. If that happened, it would increase competitive advantage of both names - sum of the parts greater value than each alone.

Risk (for me): this is more graphic design so again not as essential for architecture. Not as sure if another program could overtake it.

 

Tyler TYL

They digitize public agencies (permit centers, courts, etc). Similar to what Munger/Daily Journal is trying to do.

We submit drawings for review by the City to get permits. Where I live, in February 2020 we had to print thousands!!! of 30”x42” sheets of paper to submit permit application in person. When we have comments, we visit the permit center and use a pen to update by hand each copy of a sheet in person. The City has been working on digitizing the agency for more than 10 years. Now, just 2 months later the City is accepting PDF applications digitally in a makeshift temporary way. Perfect story of how Coronavirus is ending up accelerating big changes that were inevitable.

I don’t know much about TYL.

I just know that it’s inevitable that all agencies will need to be digitized. And once they are the company that does it will maintain the software for decades. Public agencies have a many decades long timeline. Digitizing agencies will cut costs for everyone in the long term. The way it was inevitable that people watch movies online instead of renting from Blockbuster.

Value of TYL: don’t really know

Risk: Even though profitable long term, municipalities will have much reduced budgets and many could go bankrupt in the near term.

What I don’t get - why doesn’t the house set up a large public investment now to digitize all agencies. That would increase efficiency for everyone in the long term.

 

 

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@ dpetrescu

 

Thanks for posting - I used to work with architects / PMs/ code consultants in another life...I own a little SST but need to look closer at the software and digitization that you mention.

 

Re SST - custom printed fasteners are a near-zero probability. For 1) simpson products are proven and 2) most large builders use predefined plans which are centered around existing materials and material designs. Large scale builders will not be customizing homes to the extent that special ties are needed.

 

Re digitization - our expediters back in the day digitized most of NYC from the project side. And I'm pretty sure we worked with the DOB to digitize their systems such that builders could electronically submit documentation. However this is kind of a one-time deal, right? Are you aware of anyone who is paid by the local government to manage these systems? I am not but I think that would be an excellent business.

 

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I have extensive expertise in researching pictures of women in bikinis on the internet. 

 

I also know the assets of Five Point Holdings, a land development company in Southern California.

 

I'm a decent bird dog and have found a few off-market real estate opportunities.  I have also found a few small cities with a good economic profile in the flyover states. 

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