FBR General Discussion, page-4610

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24/01/24

15:30

Post #: 72045949
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Originally posted by MadDog12: ↑

I have spent the day catching up on some reading and I'm currently reading The Dhandho Investor by Mohnish Pabria.
This is a great read for those wanting to adopt better mental models around Mr Market, value investing, Margin of Safety, etc.
I would highly recommend!!!

The book is focused on value investing, i.e. buying when your conservative estimate of intrinsic value is less than the current price by a large enough margin of safety.

Anyway, the book talks about successful investing in terms of risk and uncertainty.
Specifically, it talks about investing when risk is low but uncertainty is high.
Risk is low when you understand the business well, the market, the industry, etc.
Uncertainty is high when there is a range of different outcomes. High uncertainty leads to pessimism which leads to irrational selling of stocks, which leads to being able to buy stocks for less then perceived intrinsic value.
So the main theme of the book is in finding businesses with low risk and high uncertainty and how these two factors interrelate.

The reason I feel the large gravitation pull toward FBR is because I perceive:
Low Risk - I know the business well, I feel like I know their competitive advantage, I feel like I have a reasonable grasp on what the future holds.
High Uncertainty - everyone hates FBR stock rite now. Heck it's trading at a $100m market cap which all the inbuilt optionality of one of a kind produce alongside a massive Total Addressable Market if successful.

The book also talks about determining probabilistic outcomes and how to structure your portfolio around this. How higher probabilities and payoffs deserve higher concentration and such.

It's just food for thought because I haven't really thought about things in this light and it kind of makes you re-evaluate how you perceive volatility in the market, how and when you should hold/sell. Probably one of the best finance psychology books you will read.

Anyway, just checking in with the crew, back to the book.

This is not investment advice. Do your own research, etc etc.

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And you have come to the conclusion that fbr is low risk?

FBR Price at posting: 2.7¢ Sentiment: Sell Disclosure: Not Held
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(20min delay)
Last 3.9¢		Change 0.001(2.63%)		Mkt cap ! $188.1M

Open	High	Low	Value	Volume
3.8¢	3.9¢	3.7¢	$105.3K	2.771M

Buyers (Bids)

No.	Vol.	Price($)
6	1706565	3.8¢

Sellers (Offers)

Price($)	Vol.	No.
3.9¢	1901086	6

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No.	Vol.	Price($)
6	1706565	0.038
59	8684939	0.037
16	2592007	0.036
19	3125256	0.035
6	654506	0.034

Price($)	Vol.	No.
0.039	1901086	6
0.040	2232805	9
0.041	537889	3
0.042	1527207	4
0.044	35000	1

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FBR General Discussion, page-4610

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FBR General Discussion, page-4610

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