fundamental msb (no chart talk), page-16

"BUT you can't say the cause of the SP underperformance has nothing to do with Macbank with the negative reports it has issued"

And you can't say it has.

Where the share price finds itself today could be due to a myriad of factors other than Macbank manipulating it:

UBS could be shorting.
Or JP Morgan.
Or Deutshe Bank.
Or Credit Suisse.
Or Acme Stockbrokers out of Upper Wisconsin.
Or Goldman Sachs could be writing some complex, synthetic derivatives around the stock.
Or Quant funds have been selling because their computers are flagging technical weakness.
Or some institutional investor has been exiting due to a change of mandate.
Or bored holders have been exiting.
Or a Bermuda-based hedge fund has been shorting
Or one based in the Caymans. Or in Reikjavik. Or Vladivostok.
Or some biotech fund has been undertaking some delta hedging to lower their fund's beta.
Or the recently-deceased estate of Mrs Smith has been wound up.
Or..
Or...
Or...

There are zillion reasons why stocks do what they do, but ultimately their share prices reflect the underlying, fundamental intrinsic value of the enterprise.


"BTW WOW is coming under pressure in the forseeable future. Investors won't be happy to have paid a premium for a blue chip, only to have it suffer a down turn....with pressure from Aldi etc.So there are risks even with blue chips. "

I think you don't understand how I invest. For starters, for me there is a very big distinction between what the intrinsic value of a company does and what its share price does.

I look to invest in company's whose intrinsic values rise over long periods of time (in real terms, and preferably at a multiple of the inflation rate). For that is the essence of shareholder wealth creation.

So, while I am intrinsic value manic, I am largely share price agnostic. All share prices do is provide a potential buying opportunity.

Instead, I invest for growth in the intrinsic value for the enterprise. If my analysis tells me that WOW will continue to increase in intrinsic value over the next decade - despite the increased competitive landscape - then what I hope to happen is for the share price to fall... the harder the better, so that I can buy more shares.

And that, I think, is the difference between you and me.

I know it might sound completely bananas to people like you, but I actively yearn for the share prices of the companies I own to fall. Why? Because I want to buy more shares at lower prices.

Rising intrinsic value combined with a falling share price is the Holy Grail for me.


"Goldmans has issued a warning about CBA, and there is a consensus that it's pretty much reached the limits..."

Wow.
Really?

Because "consensus" for CBA has, for as long as I can remember (which transcends almost 25 years), gone through many schizophrenic bouts of "limit has been reached" and "arguably Australia's most powerful business with demonstrated track record of shareholder value creation".

And yet, despite all the zigging and zagging of the stockbroking community over time as to whether the stock is a BUY, HOLD or SELL, the one thing that has remained constant over a very long period of time is that the company has continuously increased in intrinsic value.

So I pay not the slightest heed to "consensus".

"Consensus" is - in my view - little more than a construct of the stockbroking industry, designed to have the precise effect that it is having on you, namely to be aware of consensus and whatever its whim might be a t any given time, and to think and act accordingly.

Consensus is broker lexicon that gets investors to do what brokers want them to do, that is, to transact. Which is where brokers make their profits. From activity. And that's why "consensus" changes continuously, ebbing and flowing from bullishness to bearishness, and back again.

"...and the endless stream of dividends is likely to tighten"

I've not come across a "tightening" dividend stream. What does that look like, I wonder.
Does it mean that dividends will be cut?

If so, on what basis? The company's Tier 1 capital ratio is well over minimum limits, the loan book is provisioned as conservatively as it has ever been, wholesale funding is stable and favourable, and the NIM is widening with the high level of demand for residential mortgages.


"You never talk about the downside of even premium stocks and there is downside even if you pay through the nose for a stock."

No I don't talk about the downturn for "premium" stocks (whatever they might be), because for all the stocks I own I have a firm view will increase in intrinsic value over time, just like they have done for long periods leading up to now.

Sure, there might be downside in their share prices from time to time. But, hey, that's investing in listed securities for you.

Some days the share prices go up; some days they go down.

But as long as intrinsic value keeps rising, that's all that matters to me.

It is clear to me that you think very much in terms of the share price.
I don't: I think in terms of the business.

In the short-term the share price might shoot off in directions that I cannot predict.
But ultimately the share price will catch up to reflect the intrinsic value of the company.

Which is why I couldn't give a hoot whether or not "Consensus" at any given day, week, or month feels like buying, selling, shorting, zigging, zagging, or whatever.

As a very smart, very successful investor once stated:

"The investor should not regard the whims of Mr. Market as determining the value of the shares that the investor owns. He should profit from market folly rather than participate in it. The investor is best off concentrating on the real life performance of his companies, rather than being too concerned with Mr. Market's often irrational behaviour."

He also proposed a clear definition of investment that was distinguished from what he deemed speculation.

It read,

"An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return. Operations not meeting these requirements are speculative."

Stirring stuff, eh?



"Why don't you go home and take a break madamswer? You've put in a colossal effort at trying to discredit me all day, you must be tired."

I am home.
No golf for me today...the weather was iffy.

And I'm not at all tired. I had a very relaxing day...walked the dog this morning then, went for a bike ride followed by coffee.

Also, I simply love stocks.
Some people do woodwork for a hobby; some collect stamps; some go bird-watching.

Me: I love to trawl around stocks.
I never tire of it.