Value Investors Club

[LowIQinvestor]

I am currently doing a write up for ValueInvestorsclub.com and wanted to hear from anyone who has had an idea accepted and/or rejected. Any advice for a first timer?

 

For those that are interested, my write-up is on TEO- Telecom Argentina.

 

Thanks.

[racemize]

I got in with a write-up of AIG, but then someone else posted one while I was waiting for approval, so I couldn't use it as one of my ideas.  Generally, I think just be very thorough.  I can send my AIG write-up if you like.

 

I let my VIC expire.  I think the board is better, and moreover, forcing 2 ideas a year seems like a bad idea, are there really 400+ good ideas a year?  I don't think so...

[LowIQinvestor]

Thanks for the input. I may post an advanced copy of my Telecom Argentina- TEO analysis to this board before VIC to get opinions.

 

Are you referring to the message board on VIC?

 

Thanks

[onyx1]

I was accepted years ago and have also let my membership expire.  It's more time than I am willing to spend to submit two ideas per year.  That said, an expired membership is worthwhile as one can still read all comments and post them too.

 

As far as your submission, keep in mind the judges are Magic Formula practicioners, so references to TEV/EBIT and EBIT/(PPE+WC) will help.  And agreed, be thorough.  Sprinkle your writeup with comments you personally received from management or industry insiders.  This carries weight and shows you are willing to go the extra step in your research.

 

Best of luck!  Don't feel too bad if your idea is rejected, I know one very accomplished investor who has been rejected more than once.  It's a subjective call.

 

 

[yadayada]

to be honest some of the ideas are awefull. They should also screen ideas once people are in. I suspect that quality control goes down after the first idea. Sometimes they barely give any info. It would be better if they did one idea, and just screened every idea. If its not up to par then your membership is not renewed.

[racemize]

Thanks for the input. I may post an advanced copy of my Telecom Argentina- TEO analysis to this board before VIC to get opinions.

 

Are you referring to the message board on VIC?

 

Thanks

 

I was referring to this board.

[LowIQinvestor]

Thanks for all the advice on the detail required for VIC submissions.

 

So don't simply say:    "I figure if Pandora is worth $800 + per sub, and Telecom Argentina ( TEO) has 20M + subs then I am looking at a 5x return! "

 

Less bullish on joining VIC now :)

 

Happy Friday!

[phil_Buffett]

@LowIqinvestor

 

i would be interested in your idea  :)

 

Telecom argentina. would be very nice  :)

[LowIQinvestor]

@LowIqinvestor

 

i would be interested in your idea  :)

 

Telecom argentina. would be very nice  :)

 

Will release my analysis after I build my position in TEO  ;)

[LowIQinvestor]

I encourage you to look into it before Dec 26th if you think it could be a good idea.

 

"The amount to be distributed is equivalent to P$1.03182179 per outstanding share or P$5.15910896 per ADR, prior to deductions of the Personal Asset Tax and Income Tax obligations, as described below. Dividends will not be paid nor reserved to Treasury shares.

 

For ADR holders, the Record Date is December 26, 2013 and the Payment Date is January 6, 2014. The payment to these shareholders will be made through the Depositary Bank, JP Morgan Chase Bank N.A."

[phil_Buffett]

I encourage you to look into it before Dec 26th if you think it could be a good idea.

 

"The amount to be distributed is equivalent to P$1.03182179 per outstanding share or P$5.15910896 per ADR, prior to deductions of the Personal Asset Tax and Income Tax obligations, as described below. Dividends will not be paid nor reserved to Treasury shares.

 

For ADR holders, the Record Date is December 26, 2013 and the Payment Date is January 6, 2014. The payment to these shareholders will be made through the Depositary Bank, JP Morgan Chase Bank N.A."

 

@LowIqinvestor

 

i would be interested in your idea  :)

 

Telecom argentina. would be very nice  :)

 

Will release my analysis after I build my position in TEO  ;)

 

great thank you very much LowIQinvestor  :)

[twacowfca]

I was accepted years ago and have also let my membership expire.  It's more time than I am willing to spend to submit two ideas per year.  That said, an expired membership is worthwhile as one can still read all comments and post them too.

 

As far as your submission, keep in mind the judges are Magic Formula practicioners, so references to TEV/EBIT and EBIT/(PPE+WC) will help.  And agreed, be thorough.  Sprinkle your writeup with comments you personally received from management or industry insiders.  This carries weight and shows you are willing to go the extra step in your research.

 

Best of luck!  Don't feel too bad if your idea is rejected, I know one very accomplished investor who has been rejected more than once.  It's a subjective call.

 

I have mixed feelings about VIC.  In late 06, we went to a meeting where an outstanding value investor with a no longer small fund was recognized for having the best documented record of all 2000 +funds that had been tracked by a service since Y2K. I punched Tim and said that our record had been better than his.

 

Then I got a big head and said that I wanted to submit an idea to VIC and get some satisfaction or recognition. My idea was for a company we had bought in the summer of 06 that had by then become our largest position: Lancashire Holdings: it was selling for less that what I projected their forward NAV would be the next time they reported. Plus, It was practically a net net because they had high quality, short term assets and had had almost no losses and hardly any reserves in consequence.

 

My submission was brief because VIC said the maximum word count could be no more than 500 words.  I didn't hear from them, but then a few months later, I discovered that they had accepted an analysis of LRE that had been submitted a few weeks after mine.  In fairness, that other submission was outstanding, much better than mine.  Even so, I was a little ticked  because the other poster had been allowed about 2500 words for his submission. 

 

Later in 07, I spotted changing conditions that I thought would lead to a turnaround in Star Gas, a previous posting on VIC that had tanked and been reorganized after the original post.  After loading up, I sent my thesis to them, but again, it was ignored, even as that stock doubled in the next few months.

 

Both of my submissions referenced BV\SH and increasing earnings available for stockholders rather than EV/EBIT which was not the best metric, given their capital structures and where the value lay in those two companies.

 

Go figure.  ???

[Packer16]

I had the same experience with two idea that I submitted.  They were rejected then accepted by another poster at a higher price.  After that I gave up.  If there wasn't a great stock community like this I probably would have tried again.  Access to the ideas provides a great resource to find thrown away value stocks that can work out great.  That is how I found out about Petrobank in the mid 2000s.

 

Packer

[Orange]

Some time ago I knew a guy that submitted a great short (selling) analysis on a small Chinese reverse merger -one that nobody was talking about- and was denied. Then a couple weeks later another new poster submitted a less detailed long thesis on the same company, and got accepted. The stock tanked pretty hard after all this.

 

I don't know which Greenblatt minion(s) is fielding VIC submissions, but quite frankly they aren't very good at their job.

[twacowfca]

Some time ago I knew a guy that submitted a great short (selling) analysis on a small Chinese reverse merger -one that nobody was talking about- and was denied. Then a couple weeks later another new poster submitted a less detailed long thesis on the same company, and got accepted. The stock tanked pretty hard after all this.

 

I don't know which Greenblatt minion(s) is fielding VIC submissions, but quite frankly they aren't very good at their job.

 

That reminds me of an undergraduate history course I took during a brief stay at a university.  I knew the material cold, but received a disappointing B+ on the first test after carefully wording my essays. It was a 150 student classroom, and the papers were graded by TAs. I asked one of the TAs how he graded the papers, and he told me that he had been instructed to put a check mark by each factoid he saw when reading each paper.  Then he counted all the checkmarks on each paper for each student. Then these totals were entered into a program and graded on a curve.

 

I needed to settle down and make good grades, so I determined not to barf all over the TA.  After all, he was just doing his job.  My answers on the next test had no insights or literary merit, but lots of factoids that I threw on the paper.  Of course, I got the highest grade in the class on that test and each test thereafter. But I wasn't proud of my work.

[nkp007]

I was rejected from VIC three times. I don't think the quality of my ideas was that good since I had applied when I was in the initial learning process about investing. Honestly though, if I applied now (after 6 years of experience), I'm still not confident I would be accepted.

 

I appreciate that they still allow people to see the ideas on a delay. It's still helpful to read other people's analysis as a learning tool.

 

In the meantime, I've made an incredible group of friends with fellow investors on this board and via Twitter.

 

 

 

 

[bookie71]

I too joined early on, but dropped them when it seemed that they were more interested in a "story" stock than a value stock. 

You get much more from this board than they ever dreamed on VIC.

[Parsad]

I was accepted years ago and have also let my membership expire.  It's more time than I am willing to spend to submit two ideas per year.  That said, an expired membership is worthwhile as one can still read all comments and post them too.

 

As far as your submission, keep in mind the judges are Magic Formula practicioners, so references to TEV/EBIT and EBIT/(PPE+WC) will help.  And agreed, be thorough.  Sprinkle your writeup with comments you personally received from management or industry insiders.  This carries weight and shows you are willing to go the extra step in your research.

 

Best of luck!  Don't feel too bad if your idea is rejected, I know one very accomplished investor who has been rejected more than once.  It's a subjective call.

 

I have mixed feelings about VIC.  In late 06, we went to a meeting where an outstanding value investor with a no longer small fund was recognized for having the best documented record of all 2000 +funds that had been tracked by a service since Y2K. I punched Tim and said that our record had been better than his.

 

Then I got a big head and said that I wanted to submit an idea to VIC and get some satisfaction or recognition. My idea was for a company we had bought in the summer of 06 that had by then become our largest position: Lancashire Holdings: it was selling for less that what I projected their forward NAV would be the next time they reported. Plus, It was practically a net net because they had high quality, short term assets and had had almost no losses and hardly any reserves in consequence.

 

My submission was brief because VIC said the maximum word count could be no more than 500 words.  I didn't hear from them, but then a few months later, I discovered that they had accepted an analysis of LRE that had been submitted a few weeks after mine.  In fairness, that other submission was outstanding, much better than mine.  Even so, I was a little ticked  because the other poster had been allowed about 2500 words for his submission. 

 

Later in 07, I spotted changing conditions that I thought would lead to a turnaround in Star Gas, a previous posting on VIC that had tanked and been reorganized after the original post.  After loading up, I sent my thesis to them, but again, it was ignored, even as that stock doubled in the next few months.

 

Both of my submissions referenced BV\SH and increasing earnings available for stockholders rather than EV/EBIT which was not the best metric, given their capital structures and where the value lay in those two companies.

 

Go figure.  ???

 

That's because those qualifying the ideas are an aggregate of the general community.  Their results as a whole will never be better than the average.  It's why VIC theoretically is a good idea, but not in practice or functionality.  In general, they are an analyst community and we know how analysts do on average!  ;D 

 

The results here would be probably the same if taken in aggregate.  But because we don't have a general committee that judges the ideas, there are pockets of individuals who clearly can outperform the markets by significant amounts over time.  This board allows you to try and coat-tail those people...VIC and most investor forums do not.  Cheers!

[no_free_lunch]

I put an app in a few years ago and was rejected.. I think.  The thing that bugged me was the rejection email was worded very strangely that it was difficult to interpret what it was actually saying.  I couldn't figure out if my app was actually rejected due to poor quality or if they just weren't taking new apps at the time.

[Hielko]

That's because those qualifying the ideas are an aggregate of the general community.  Their results as a whole will never be better than the average.  It's why VIC theoretically is a good idea, but not in practice or functionality.  In general, they are an analyst community and we know how analysts do on average!  ;D 

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.

[Packer16]

In talking to local asset managers I think the system they are in are designed to underperform.  Namely, the securities have to be approved by a committee and ugly and unusual securities we look at here are not what most of these guys want to own.  In addition, many want larger firms that can be sold if there are redemptions.  It is a difficult situation where you have smart guys who could in theory load up on names we discuss here but do not because of institutional/customer constraints. What many should do is fire their customers and focus on what are the best investments but this will lead to many loosing their jobs.  If VIC has a good number of folks of the institutional ilk (especially evaluating ideas for entry) then I could see how some the mindset could carry over.  Alternatively, here we are unconstrained and can discuss the "untouchables" of the institutional investing community of which VIC may be a part of.  BTW some of my best performers are when the "untouchables" become touchable like SALM, SGA, GTN, NXST and LIN.

 

Packer

[AchilliesValue]

In talking to local asset managers I think the system they are in are designed to underperform.  Namely, the securities have to be approved by a committee and ugly and unusual securities we look at here are not what most of these guys want to own.  In addition, many want larger firms that can be sold if there are redemptions.  It is a difficult situation where you have smart guys who could in theory load up on names we discuss here but do not because of institutional/customer constraints. What many should do is fire their customers and focus on what are the best investments but this will lead to many loosing their jobs.  If VIC has a good number of folks of the institutional ilk (especially evaluating ideas for entry) then I could see how some the mindset could carry over.  Alternatively, here we are unconstrained and can discuss the "untouchables" of the institutional investing community of which VIC may be a part of.  BTW some of my best performers are when the "untouchables" become touchable like SALM, SGA, GTN, NXST and LIN.

 

Packer

 

I recently joined the "evil empire" of a large asset management firm and it's interesting to see the other side. As much as there is the portrayal of managers ripping off clients I think you hit the nail on the head and a lot of these institutional clients shoot themselves in the foot. They don't want an asset allocator, for instance they want you to invest X% of their money in US equities and put restrictive mandates in place that limit cash balances, geography, and market cap. It forces you to work in terms of relative value vs absolute value.

 

Another thing that bugs me is the report demands. A lot of these big institutional clients demand monthly manager commentaries, communication, attributions, performance reports, etc. This takes time away from the most important aspect of a managers job, investing.  Also the back/middle office infrastructure required to support it makes it uneconomic to run a fund that is say sub $500 Million, putting a size anchor on performance.

[krazeenyc]

I've actually had excellent results from VIC ideas.  I've been very stingy when it comes to using them and completely ignore the rating system. I pay attention to the posters track record, but the idea is more important. I also pretty much pay attention only to the sub $1 billion market cap there.

I've read through hundreds of posts invested in 9 VIC sourced ideas (in no particular order) -- I'm sure I've invested in more but not that I directly got from there. I definitely think VIC is useful -- especially like Packer said as a way to find some good older ideas.

 

1) SILC - I purchased it at $15 sold at $30 (1 year + holding period) and it's in the $40s now. 

2) POWR - I purchased it at $6 sold at $11 (6 month or so holding period) and it's at $17 + now.

3) MBND - Only loser. I purchased at $2.60 and ended up selling it for tax loss purposes for $2.20 was sold a few months later for $3.20.

4) BCOR - Bought at $16 Sold at $24 (6 month or so holing period) now at $29+.

5) DGICA - Bought at $14.50 and sold at $16. Still think it's a good idea basically a mutual insurer. But hard to see catalyst.

6) ORI  - Purchased at $9 avg price. Was a very large position (i thought it was a no brainer) and sold at $15 and received about $1 of dividends as well)

7) EXETF - basically breaking even. Still like the potential sale/spin off catalyst.

8) GYRO - Bought at $50 and sold at $100.00.  Event driven idea.

9) LACO - Bought originally at $1.80 and sold at $3. Rebought at $3.30 and still own. Currently at $4.00. Still think it's an excellent idea even if nobody else does :D.

[ageofsocrates]

VIC is a good place to learn how to value companies in various industries, analyze capital structures  and decipher footnotes. The really good posters are just a handful and it would be wise to hear what some of these guys are thinking.

[plato1976]

Wondering if anyone is nice enough to share a list of good posters on vic

 

VIC is a good place to learn how to value companies in various industries, analyze capital structures  and decipher footnotes. The really good posters are just a handful and it would be wise to hear what some of these guys are thinking.