Interim CHF data....What will it mean, page-51

Do you realise the longer you wait for profits to be earned, then the lower your return.

Yes, but my experience - not just marginally, but overwhelmingly - is that for the right kind of companies the amount of "return" I miss out on by waiting for my investment criteria to be met, is not significant compared to to the amount of return I will still enjoy, anyway.

For example, CSL is a company I have owned for about 10 years, having bought my first shares a full 3 years after the acquisition of Aventis Behring, after it became clear to me that the enlarged CSL plasma business was performing to expectations.

I paid something like $15.00 for my first CSL shares. Of course, I could have paid $10.00 two years earlier before I had any clarity of how successful, or otherwise, the Behrings acquisition would end up being, so I did indeed forego some return.

But the returns I have made by buying when I assessed the stock to be sufficiently de-risked - namely 733% or 24%pa on an annual compounding basis (excluding dividends) - are still quite sensational, I'm sure you will agree, even though I did forego some initial investment returns.

And I can cite many other examples where waiting for de-risked state before investing doesn't preclude excellent investment returns.


But, one of the most dangerous things that investors can possibly do is talk about "return" outside of any context of "risk".

And I can demonstrate many cases of companies that I followed for some years, which on the surface looked like they could be good businesses but in which I did not invest because of the risks I perceived.

Businesses such as, but not confined to, Allco Finance Group, ABC Learning Centers, Babcock and Brown, Billabong, Brambles, Logicams, Polartechnics, Primary Healthcare, Southcorp, Vocation Group... of these, those that have not gone belly up, have been poor investments over extended time frames.
(You may not have heard of all of these)

So it's not just the positive returns one makes from the stocks in which one does invest, but it is also the avoidance of the negative returns from the stocks in which one actively chooses to not invest, that determines how much wealth one creates by investing in publicly listed companies.

People are highly focused on the former, but they overwhelmingly neglect to consider the latter.


"This is not possible for those who over analyse and drone on because their destination leads to hesitation and inaction. Not my kettle of fish i'm afraid."

Conversely, lack of hesitation and too quick action could result in permanent capital loss.
Which is certainly not my kettle of fish.

In MSB's case, by hesitation and inaction has saved me a lot of money and avoided some significant opportunity costs.