Your favorite industry

[yadayada]

What is your favorite industry that you know more about then most investors? And explain why it might be more interesting then first sight. Its alot easier reading about a industry when you are interested at it. And give us some reading material :) .

 

Mine is currently the shipping industry. At first sight it appears as a boring commodity industry. But if you look further it is actually a pretty exciting and almost zero sum industry. Reminds me a bit about poker. one's 20% return is someone else's -18% return. And ship owners are more traders then buyers and sellers. Its much more then just simply capturing the spread between interest rates and shipping rates. And just like with poker there are a select few who  are consistently winning at this and generating fat returns, mostly taken off the dumb money when times are really good and really bad.

 

SOme reading if your interested:

good intro and quick read.

http://www.amazon.com/Shipping-Man-Matt-McCleery-ebook/dp/B005S4FTHW/ref=sr_1_1?ie=UTF8&qid=1387564572&sr=8-1&keywords=the+shipping+man

maritime economics:

http://anzaliport.pmo.ir/pso_content/media/digitallibrary/2013/4/book15/15.pdf

 

Thick read tho.

 

Post away.

[Palantir]

Technology. So many great companies.

[handycap5]

industrial gas. check out AI FP's long-term stock appreciation at their recent investor day (since 1913!).

[augustabound]

Porn.

 

Wait, what? Investing industry, right. I like investing on the internet too..............

 

 

I like the dynamics of the insurance industry, like lots of other CBF members here.  The idea of collecting money while quite possible never having to pay it out and being able to invest it while you wait.

 

Thanks to twacowfca and gio in the Lancashire thread when you can find a company like LRE.

 

I also have an interest in the metals and mining industry but have only just started looking into that.  I think you really need to find that honest owner operator that has their money on the line too. 

I think Altius is a good example that.

[LC]

Personal products because there are so many psychological factors in play.

[Steve]

 

I'm particular fond of the business management software companies that offer tax solutions-  INTU, BCOR -  these companies have the scalable advantages of the software companies (IP), huge barriers to entry, user switching costs, and high margins.

 

-Steve

 

 

[dcollon]

Asset Management

[Ross812]

Companies with production, sales, and/or distribution advantages giving them a valuable 'network effect'.

 

Examples:

 

McCormick -  Controls the entire spice aisle including special value store brands. They can stock pricey specialty spices and give away cheaper spices to grocers as a package. They can buy smaller spice brands and expand their product availability all over their network.

 

LKQ -  Their buyers can purchase wrecked autos all over the country using real time software showing them inventory, orders, and maximum bids for autos. They are the only one stop shop for body shops and they recycle unused inventory for profit after putting the salvaged auto at a retail location for small body shops and DIY types to pick over the leftovers for 60 days.

 

Bidvest - buys all sorts of businesses and provides them with vertical integration via the conglomerate while letting management do their thing autonomously. This would be like Berkshire sourcing Heinz ketchup at cost for DQ and shipping Lubrizol chemicals at cost on BNSF.   

 

 

 

 

[eclecticvalue]

yadayada, shipping companies have been beaten down this past year. Do you think 2014 is the year they will come back?

 

My favorite industry so far is the industrial equipment auctions. A company for example, Ritchie Brothers, has done very well and dominates the space, can't wait for the stock price to pull back.

[randomep]

Great topic!

 

I like certain components of consumer discretionary; something that can affect our psychological or physiological well being such as : pets, alcohol, tobacco, (no porn as someone mentioned because it is very labour intensive)

[yadayada]

yadayada, shipping companies have been beaten down this past year. Do you think 2014 is the year they will come back?

 

My favorite industry so far is the industrial equipment auctions. A company for example, Ritchie Brothers, has done very well and dominates the space, can't wait for the stock price to pull back.

No, maybe a little bit, but I think it is v unlikely we are seeing a large boom anytime soon. Maybe 5-6 years from now. Im searching for companies to bet on when it will happen tho.I think these companies are usually misunderstood, and I just want to make some money on them :) . If you look at the order book, it is crazy. Look at page 10:

http://www.aya.com.gr/pdf/stopford2013.pdf

. Amount of new ships that came in the past few years is crazy. And when I hear super succesfull macro fund managers like Ray dalio talk about the medium term then it doesnt sound that positive. Over 10-20 years it is probably safe to be optimistic tho. with the amount of supply that came in the last 6-7 years and with the chinese backing their shipyards, your going to need some serious demand to see a shipping boom anytime soon. Historically tho, there is on average a boom every 7 years. Some bad periods last 12 years and some only 5.

[yadayada]

Technology. So many great companies.

Thoughts on XPEL and FLIR?

Im not sure about the moats of both. If their moats are at least v decent then these companies are set up to gain a v nice market share of an industry that has some massive growth potential in the next 5-10 years.

[plato1976]

 

Consumer brand , esp something you need to put into your mouth

Finance - esp banks with big deposit base, and good asset management company

Business service (no IBM, pls)

 

Technology. So many great companies.

Thoughts on XPEL and FLIR?

Im not sure about the moats of both. If their moats are at least v decent then these companies are set up to gain a v nice market share of an industry that has some massive growth potential in the next 5-10 years.

[mikazo]

Thoughts on XPEL and FLIR?

 

FLIR would benefit from the recent growth in the ghost-hunting industry  ;)

[Gamecock-YT]

aviation/airlines

[no_free_lunch]

I am no expert on them and I feel like I'm cheating but I really like conglomerates that use financial engineering.  Companies like LMCA, BAM, dundee, more that I can't think of right now. 

 

I figure if you can buy them below book they can make value  by buying shares, spinning off companies, buying back spinoffs, there are just so many options.  Reading Greenblatt's book, he claimed that all this complexity causes confusion and annoyance from the market which can lead to good pricing.  It still seems to be somewhat true.  Basically they are perpetual special situations which historically have lead to above average results.  Nothing very complicated but then investing doesn't need to be complicated.

 

You also have the advantage that as they are value investors, these guys will go where value is.  Brookfield is investing in brazil, and in natural gas in canada.  I don't need to go and research brazil and natural gas, I just have reasonable confidence that they know what they are doing because their track record is good.  Again, it's simple but it seems to work.

[Packer16]

I like recurring revenue businesses like telecom, software, IT services, media (TV/radio) and leasing of all sorts.  I also like to dabble in financials, autos, oil and gas and defense contractors.  In the future I would like to become smarter in real estate (especially development assets).

 

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