"Independent channel checks I personally conducted over the course of 2019 indicated quite clearly that the value of plumbing supplies in the states in which Moresco operates did not grow by anywhere near 9%. Ergo, Moresco increased its share of the market"
How much of that was purely momentum of the current Morsco structure (prior to Reece ownership)? What was like for like sales for Morsco prior to Reece for example?
"Do you not feel in the least embarrassed by that?"
Yes, hence why I said your analysis was insightful. I am often embarrassed. I embrace embarrassment. I know I am learning when I make an arse of myself. Nothing ventured nothing gained. Humility over pride as they say.
However
, I stand by my comment. If a retail shareholder does not have spare cash to participate in the share purchase plan, then their shareholding will be diluted. You may have a lazy 35k laying about, but how many do especially in the current environment. Keep it real.
"Pretty laughable, really"
Nah, just reality for the average retail shareholder Adam.
"That presupposes that people know how to sell at peaks in share prices based on the timing of economic cycles."
My thesis for investing will and always will remain 95% value, 5% macro.
I know you are 100% value, 0% macro and good luck to you. You have zero interest in considering systematic risk. Is that a reasonable comment Adam?
My investment in REH is a perfect example. I considered the valuation post the Morsco aquisition as did you. You decided to hold. I decided to sell.
Why did I decide to sell? Because of my 5% consideration of where the US was in their economic cycle. I.e. towards the end of the longest economic cycle in US history.
Why you ignore such a risk is beyond me. But never mind, each to their own. I think I have argued my case to the jury enough my thesis.
"Which is your perennial thesis for investing, yet you are unable to cite examples of anyone who has been able to do so on a sustainable basis"
Wiley Packer has. He is 95% value, 5% macro. A2+B2=C2
We all get lost in the minutiae I guess. The day to day grind of value investing. I find it helpful to be mindful of the bigger picture. So I dont become short sighted or long sighted. Gives my eyes a rest so to speak. Book to distant landscape and back to book again. But thats just me. I find it more interesting.
Do you think that systematic risk is a concept made up by the tooth fairy Adam?
I recall you made a comment last year in my traffic lights thread along the lines of "so what if the market falls 30% or so". A light bell rang in my head when I read that.
"You're not really gloating.
People gloat when they get things right for the right reason"
I am gloating
. Hence why I also noted I am foolish to gloat. I'm only human.
"Incorporating the timing of pandemics into sell discipline is something only for those with extraordinary powers of clairvoyance.
Anyone can look back at share price charts and boldly claim that one should have sold at the peak and bought at the trough"
Pandemic shamdemic. The US was due to roll over at any point. I was actually pissed off that the Pandemic was the catalyst. My traffic lights were working beautifully. I was just waiting for my opportunity to strike. Oh well, I will just have to wait for them to all go red again in a decade or so to prove my 95/5 thesis beyond reasonable doubt.
Um hello Adam, I did sell at the peak and bought at the trough. And I have been presenting my case since the peak. Banging on about it infact. Like a nut burger to be precise. For the reasons explained above. Noting I am not convinced we have seen the "trough".
Nor the long term peak
"You tell me: what happened to Reece's cash flows between 2008 and 2014?"
They look good. How about free cash flows 08 -14? Noting eps didnt look as flash 08-14.
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