Finally I got time to respond to your questions. I had been busy to prepare tax returns for myself and siblings.
""I think (a) it is great that you want to be altruistically helpful, and (b) it all depends on your definition of 'proper DD'.""
I just found your a) questions quite burdensome. (gg) I think I am going into reading mode after this writing. It just involved too much writing to explain my earlier casual comments. (gg)
You b) question. My view of "proper DD" vs. "DD" for investing is quite different.
I want to be like an company insider while doing my "proper DD". A "proper DD" means to know your investment inside out (risk level, future earning potential, the industries, etc.) even that investment goes 50% off or more due to wrong timing to buy in the first place. One still has the guts to invest more (take more risks). Holding SSTI was and is a good example.
one wants to be an investor who has as much information as the insiders' or even more than the insiders'. That is my definition of "proper DD".
Doing a "DD" is an half way of a "proper DD". The best example is investing in mutual funds. One can spend all day long finding the right mutual funds (find funds average performance history, mutual fund managers skill level, and the industries, etc.). Then one thinks one has enough "DD" and buys into those funds. One now prays and expects a decent return for his investment at the year end statements. Is it a "proper DD" at all? I bet you not.
""I tend not to believe I can know much (i.e. enough) about any company over any length of time that will do me good while waiting, even when I am an insider.""
Good points though I do not agree. That is why you never invest all your money in one basket because you do not have enough information to finish you "proper DD". Or you simply do not want to do it.
Just remember those insiders are the ones who do their "proper DD" in the first place. That is why they spent all their energies and efforts to make things happen. That is why they get the best returns when they succeed. I as a small investor want to join them as much as I can.
Please notice that a "proper DD" for a small investor does not guarantee a success but give one a pre warning ahead of a disaster. It is also true that some companies did not succeed even insiders fail to recognize it. Globalstar is a good example. Before its filing bankruptcy, one SI poster (Valueman) already found that the company management could not explain questions he had. He was an analyst for an investment firm. He then pulled his funds out of both Loral and Globalstar (not sure if he or his firm had Globalstar at the time) when LORAL was at 20 something and Globalstar at its high 20. I wish I did not ignore his post at the time. That way I would have made 4-5 times Globalstar investments instead of only breaking even after 5 years investing.
"""And so why patiently wait? Why not instead loot? While the looting is good? Until it is no good?"""
For Globalstar I expected I could easily get 10-20 times or more returns based on my "proper DD" at the time. Just not good enough "proper DD" and ignored Valueman's post (a part of proper DD). :-(
"""""For example, I know nothing about NEM that I would honor with the phrase 'DD', much less grace with 'proper DD'."""""
I bet you feel safe to keep NEM for a while longer due to it is a "gold" producer. People hold "gold" stuffs for thousand years. That is a part of "DD" process. Is it not? However do you read NEM's financial statements every quarter to make sure insiders did not loot your investments by doing "Enron" things? (a proper DD) Or NEM's gold mining facilities still produced gold? (a proper DD) Will you hold NEM shares at this moment if any of the above events occurred. Even if you know for sure "gold" is universally loved. (gg)
""In fact, in my game approach, there is no patience required, as there is no patience required while one is standing in the middle of a cash-filled bank vault or a rapidly collapsing cave. It is a game, a dangerous and fun game, but a game.""
"No patience required" means NEM was your original target holdings. You do not need to have patience for NEM's price to move up and down any longer. You did wait for all these years for the share price to rise while gaining dividend checks and doing call and put options. You can say loudly you do not need patience if you do not hold any NEM share from the very beginning. Am I correct? Could you tell me you gain more from holding NEM shares or more from dividends, call options and put options for all these years?
"""""could you tell the thread generally what are some of your other positions that have survived a proper DD process, and what is the general allocation between this cash, that equity, the other bonds and such so that the thread can get a sense of the overall context of your proper DD in relation to criticality of same.""""
I have had QCOM share since 1994-1997. Sold 3/4 at 2000 not at all time high but very happy. Bought back at 30 to 40 ranges. Held and bought SSTI all the way down from 13 to 15 to 2 and back. Just sold at 13-15 slot shares. Small position in AUO and SNDK. Real estate properties in Northern and Southern California. Plenty of cash on the side to invest further. I am going to hide further after revealing my holdings. (gg) I lied to you about all I have. (gggg)
BH |
