Sunday, November 30, 2014

Retail vaccine costs have risen

Good article  http://www.nytimes.com/2014/07/03/health/Vaccine-Costs-Soaring-Paying-Till-It-Hurts.html?_r=1

Tuesday, November 25, 2014

Sponsorship

In order from largest of my holdings to smallest: 62.78%, 55.14%, and 75.8%.

Some thoughts on having an edge

Driving down the road I was pondering having an edge in the markets.  I've seen some discussions on the net about a trading edge, how it is needed.  Many involved in the market seem to want a fast buck on a fast trade.  They seek out an edge to turn this profit, exploiting some weakness or vulnerability.  These edges seem to come from many angles:
superior technology such as HFT frontrunning
pattern analysis
fundamental analysis
trading based upon indicators of which there are many
a feel/intuition/gut
cutting losses and riding winners
trend trading
and I suspect the list gets ever more complicated

What is my edge?  To begin with I accept the short term trading is unprofitable, unhealthy, and/or very difficult.  Then, factor in that I do not need the money so pressure is very low.  The big factor in my edge is that is does not disappear or change over time.  Any regular short term edge will be found and used such that it disappears.  My edge is patience.  My edge is that great growth companies grow and change the world.  Having an IPO to grow the business makes sense (kind of like hey gang we have this great idea but need money to get it off the ground).  My edge comes in learning about the management of a company over time, learning the business plan.  My edge is not (for the most part) succumbing to emotion.  My edge comes from following FIDO and perhaps Lord Abbott.  My edge comes from not investing in what I can't understand.  My edge comes from reading everything about a company (how many retail investors have read an S-1?).  My edge comes from leaning into mistakes, learning from them.  My edge comes from an investing plan and regularly reviewing IPOs.  My edge comes from knowing that the market is not fair, we can't all win, knowing it is zero sum.  My edge comes from trying to know who is on the other side of the trade.  My edge comes from critical analysis of others and trying my best to trust nobody.  My edge comes from focusing on results, not creative writing.

My edge comes from wanting it more and working harder.

Monday, November 24, 2014

Friday, November 21, 2014

GPRO and comments regarding ibankcoin

So I had not written up a report on GPRO but I'd read enough on the company to know that there was too much I not wrap my head around for me to come up with a future valuation.  The founder of the company was selling a lot of shares at the secondary.  The site is modern with lots of fancy videos.  They are permeating the market such that stories are written in the New Yorker on how vacations get ruined when someone misses their shot.  Perhaps I am too old to understand future growth and I find little of value in what their products offer to the planet.

As a foolish freshman in the market I read many market related sites searching for meaning and hot tips.  I made many trades based upon some whiff of smoke that reached my emotional brain causing click click mouse reactions.  I took up any offer of free trials to paid sites and frequently ended up subscribing.  The end result for me extreme highs and lows of emotional states and account balances.  I adapted and changed and now approach the market with at least some sophomoric sensibility.

I still go back and look at old sites of value.  One of those is ibankcoin.  ibankcoin is a site that offers commentary on the markets, supposedly from someone that has been around a while.  There also seems to be paid and volunteer writers and paid subscription services with hot tips, screeners, and overbought/oversold indicators.  Following them for a while it is amazing to see how poorly the main person trades, how poor the rationale for some of his trades are, and how poor his results have been.  They offered an educational seminar but the proprietor remained anonymous.  How the heck do people pay someone that won't show his face, has a losing track record, is a poor trader, and whose main interest running the site seems to be the recurring revenue stream?

To be fair, there are many in the market that offer paid services that I would critique similarly.  Dan Zanger had some great years with audited results from many years ago, still sells monthly products.  He does list "past winners" but not any losers or actual results.  Brian Shannon has a great book on the market, sells actionable ideas via a service, but does not share performance data.  Charles Kirk of the Kirk report is similar, he used to show performance data (it struck me then as sub par), he used to show actual trades (infrequent and cautious) but he does not share data now.

My advice to those that are green in the market, be wary of what you do with your money.  The wolves are out there.  Study what works.  Become an old rich person by living below your means, save as much as possible, put a large portion of your market funds in low cost index funds.  If you want to play the market with individual stocks find out what works for you.

Wednesday, November 12, 2014

Mini report MCUR

They have a unique product that is certainly needed.  There are several things that concern me at this point:  low volume, little sponsorship, and mainly that the market is limited to very specific issues.  Because of the limited market it no longer appeals to me.  I've seen other stocks I passed on do well, perhaps this one will also.

Tuesday, November 11, 2014

Research report MBLY

The big concern I have with MBLY is the awareness that it has been a hot issue for a number of months, lots of new money attracted to it, all the chart monkeys and trend followers.  So I enter this research stage with some reticence.  I wonder if the attraction to this new issue has been ignorant hope.

Clearly the product is a game changer for the driving world.  Tesla is using them as are every other major company.  They win 80% of the jobs they bid on, appear to have first mover advantage.  The founders are still with the company and own a good bit of stock.  They have great growth prospects especially if they can work out the algorithms for future driver less technology.  They stand to make money off of every car built each year with products in limited models at present.

Real world example:  I tested a Honda Accord Hybrid with all the bells and whistles.  Lane departure warnings were nice on major roads.  Front camera/radar device did not work, it dropped off the car.  I viewed that malfunction as a Honda assembly or salesman issue.  Tesla video showing new features also very interesting.  The safety features in modern cars are exactly what will save distracted drivers such as myself.

I think BASM checks out.

My concerns:  The S-1 mentions immediate dilution of >$23 from the $25 IPO price.  GS major owner with conflict of interest.  IPO purpose number one is "liquidity for existing shareholders".  I get a sense they were doing just fine turning the corner of profitability and wanted to provide a cash out point for early investors.  They did not access the capital markets to grow the business.

The business is growing.  This is likely a good company to invest and own for the future.  I will wait for post IPO phase excitement to settle down and then work on some growth projections if I can wrap my mind around them.


Monday, November 10, 2014

Research report ZOES

Zoes kitchen is a young fast growing restaurant concept.  They prepare fresh food only and do not fry or nuke anything.  They indicated many strengths in their S-1.  70% shoppers are women whose household incomes exceed 100K.  60% lunch, 17% catering.  I would not be good to evaluate real estate team, but site selection is key, they have experienced people in house and have standards for real estate brokers to submit properties for consideration.  750K to open a restauarant, 3yr CAGR 30%.  122 locations now, they predict they can have in excess of 1600 in the future, opening about 30 new spots this year.  If they grown at this rate 1600 is a long time away, I would like to see them over time increase the number of stores opened per year.  They regularly train new managers at multiple locations.  Experienced management team has grown them from 20 stores.

BASM check

I plan on following this company.  I plan on buying some shares and holding for as long as they execute.  Difficult to come up with a target price, but based upon current price and future number of stores, I expect 13 x current price is possible in the future ($455).

Ownership data that exists suggests not so many funds are in at present though I do see Lord Abbott, an early owner in Tesla.  Fido seems to be buying.

Market cap 637million on 16 weeks sales of 46 million.

Attached is map of local location along two major roads.  It is an odd location in that it is difficult to see from either of the roads.  The one time I've been there it was crowded, I walked by this week and it was crowded.  I hope the real estate teams choose locations with better visibility in the future.

Sunday, November 9, 2014

IPO research

This is the first round, not very detailed.  More later as I read from company data.  Seven months of IPOs reviewed, glancing at company profile via finance sites.  I screen according to things I have talked about here before: chance for explosive growth in new market, strong leadership, proper use of my money to develop business, and sleepy factor (can I sleep through losses).  Two companies peak my interest, one is large enough to consider now, the other is very small.  Two others peak my interest as game changers, not sure I can wrap my head around the entire business, will have to see.   They happen to be two that have made waves prior to my research.

1.  ZOES  I've enjoyed the food.  15 states, like 125 stores.  There has got to be room for more.  If I can read company data and understand a master plan it is a buy.

2.  MCUR Risky small Israeli would product company in stage 3 trials.  Unmet need for relatively small market, if the stuff works it could do well.

3/4.  MBLY and GPRO


Friday, November 7, 2014

Cross?

Click for larger