Think IAM is on its way to becoming a good investment soon, but...

Think IAM is on its way to becoming a good investment soon, but it has not proved to be one so far since relisting. Just about all long term investors who have simply bought and held any time since relisting are losing money. Sure, anyone can say they are in it until 2019, but a good investment that puts you in an unfavourable trading position for a long period is not a good investment.

Despite many people saying that traders are to blame here, good investments usually provide opportunity for all types of traders - LT, ST and traders due to (1) a sustained long term uptrend in share price, and (2) sustained rerate events reflected in share price. Basically, it would be hard to lose money. Currently not the case for IAM, especially over the last FY, but in time.

Both stated traits of a good investment being based on share price, not business performance, promise or potential. We make our investment calls based on the business proposition but the KPI for being a good investment is share price. A company can be a strong business or on its way to being a an industry leader, but if it's not reflected in long term share price growth, then it's not a good investment.

Unfortunately, the promise and potential was there but it hasn't played out the way we all thought it would so far. Many of the early investors, we thought we'd have a couple banks on our books by now. Sure, we can use our intuition and discretion to decide what would be a long term investment, but the results so far prove us wrong. The biggest winners are the ones who sold at the highs in Dec i.e. not long termers.

So I look forward to the day in the future that IAM becomes a great investment. That sustained long term uptrend may be starting now. And that first rerate event could come any time now. When either of these becomes evident, that's when most long term investors, who are conservative by nature, will come in.