Catalysts?
If it's a Buffettology investment, it needs no catalysts. Great companies continue great business performance. Eventually the spread between the great business performance and the market price will be enough for market to recognize the disparity. The longer it takes, the more shares I can accumulate.
If it's a profitable Graham net-net, either company gets bought (takeover) or the net-cash continues to grow compared to market price. Again, this disparity cannot hold forever.
I don't need any other catalysts. :) I don't invest in turnarounds, craparounds or other speculations that need catalysts. :)
Comments on yours:
1. New management - how can you evaluate the goodness or badness of management? I never could and I think 99% of the people can't
2. Share buy-backs - it's somewhat OK, but IMHO it's never a deciding factor. Share dilution is bad though. Share buybacks at inflated price are common, bad, but almost unavoidable in Buffettology businesses (KO, PEP, etc.)
3. Spin-offs - this is a special situation investing and should be done as such. Don't invest in a company expecting spin-off, it may never happen.
4. Asset sales - see comment on spin-offs.
5. Change in corporate strategy - see comment on new management.
6. Activist investors - if company needs activist investors, it's an avoid for me. Most of the time.
7. M&A activity - Don't invest in a company expecting M&A, it may never happen.
1. Industry consolidation - see note on M&A. how do you evaluate if this is good/bad?
2. Cyclicality - don't buy cyclicals or have cyclical-specific investment approach. |
