Ann: CEO AGM Presentation, page-34

Daicosisgod

John Milton's sonnet, commonly referred to as “On his blindness” (he was an albino, and this occasioned him to lose his sight) ends with the words “They also serve who only stand and wait." In the Hot Copper milieu, “they also serve who only read and cheer”.

There are a variety of reasons why I post on HC. One, I like stringing words together. Two, I have the academic and working background to understand business and the accounting thereof. Three, I am retired, and have heaps of time. Four, if I expose a view of doubtful merit, or a fact of doubtful veracity, there is a good chance that it would be successfully challenged, and thus cause me to change my mind.

My style of investing is to invest relatively large sums of money in a relatively small number of stocks, which justifies spending time watching and researching such stocks. With CCP, I hold about 20,000 shares – a strong motive to give it mind space.

I dislike using the word “unique”, but I suspect that CCP's conservatism is unique in its sector, and this leads to CCP as a business being possibly unique. CCP's conservatism is reflected in its accounting, which is slow to recognise profit, and the corollary of that is that its balance sheet hides value as a buffer. Conservatism is also reflected in the low debt gearing, which reduces the risk of financial collapse, and enhances the ability to pounce on opportunistic investments, which usually occur when competitors have fire sales. Also, if one has the funds, one can experiment with new initiatives, and I used “experiment”, because CCP enters new initiatives cautiously with a set profit margin in mind that matches its long-established PDL business in Australasia. Consequently, when many firms in the sector are in trouble, Mr Market may wrongly conclude that CCP is too, but results speak for themselves later, and then Mr Market's mood may become exuberant, and push the SP higher than is apt. The SP is now at the lower end in this pendulum swinging, IMO.