Ann: Trading Update and Capital Raising Presentation, page-60

"I would be interested in knowing the rationale behind @madamswer's apparent position in BWX as well."

@thunderhead1,

I'm not surprised you tagged me about my owning BWX given my lowly assessment of the BWX businesses model, which you might recall I described - like all consumer distribution companies - as being largely a catch-and-pass business that has no control over the price it pays for the stuff it catches and very little ability to determine what it gets paid for the stuff it passes.

My explanation for the misunderstanding lies in the fact that I personally place zero store of value of what the sentiment or positioning of other posters are; I think they are meaningless metrics because I come to HotCopper to learn from others about industry and company fundamentals, and I make my own mind up about the degree of investment appeal of stocks.

And because I pay no heed to sentiment and position of others, I tend to put almost no effort into keeping my own "sentiment" and "position" buttons current. So how my posts came to reflect I owned shares in BWX I don't know, but I can assure you that I did/do not.


The world in which we currently find ourselves feels to me very much like it felt when I was first learning about investing (which was at a time when inflation was also a big deal); the mentors I had at the time all impressed upon me the need for pricing power.

Over the past 15 or 20 years, the notion of pricing power had been relegated by investors to a subordinate consideration, becoming almost a quaint investment relic.

When CoGS are static (or even deflating due to outsourcing of manufacturing to China), then even half-baked businesses are able to garner half-decent margin.

But for companies that have little control over their now-inflating CoGS, pricing power is now once again a critical consideration, and the reality is that very few companies actually possess it. I very much doubt that this penny has dropped for vast swathes of investors who would have spent their entire investing lives in very benign industry conditions of falling cost of capital and deflating CoGS.

One had to be pretty dumb to not make a lot of money out of investing in stocks over the past 15 years.
But those easy days are now a thing of the past.


Anyway, I've fixed my Position button to avoid confusion (but more to get the thread back and away from what I consider to be irrelevant.)


"The presence of Tatterang is certainly comforting, especially with the subsequent increase in their stake since the debacle of an announcement"

That's where I differ; what some other entity - that is unknown to me - does some thing in relation to a certain stock, has no bearing what I should be thinking, for my view is based on my own first-principles assessment.

If Tatterang had some sort of superior long-term investment track record that had been independently audited, then sure, maybe I might be inclined to influenced. But even then, it would be only at the very margin, because as you know, even the best investors in the world make investing mistakes all the time, so how would I know if BWX was merely just one of Tatterang's mistakes?

Besides, if Tatterang's buying is to provide me with comfort, what then to make of QVG Capital and Regal selling out in recent times... considering both those investment houses actually do sport superior investment track records?

If I had to be influenced by what others are doing, investment-wise, I may as well sub-contract the management of my family's capital to others to manage.


.