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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Paul Senior who wrote (62224)	7/23/2019 6:35:24 PM
From: FIFO_kid2	Read Replies (1) \| Respond to of 78462

Paul- It would be interesting to show how many recent mean reversions worked for you. I think it has been a very challenging environment for this kind of investing on what is considered a value stock since 2011 and if it works you are then faced with the difficult decision to hold cost free shares or not. Another question to ponder if the Federal Reserve pre-emptively lowers rates to never allow the system to really flush out wouldn't it just continue to favor the same major index momentum stocks based on neofeudalistic macro themes. Like businesses that promote totalitarian government financialization (rent) ?

To: Paul Senior who wrote (62224)	7/23/2019 8:03:16 PM
From: Elroy	Read Replies (1) \| Respond to of 78462

Do you invest in MLPs? If so, you should consider UAN for your reversion to the mean portfolio. It makes fertilizer. It's a variable distribution MLP, so it pays out this quarter the free cash flow (or something like that) that it earned last quarter. It used to be $12 per share and pay out over $1 per year. Then fertilizer went into the dumps, and it didn't pay a thing for about three years. It has resumed distributions for the last two quarters (11 cents and 7 cents) and the "sentiment" around fertilizer is (I think, no expert here) improving. Seems a good reversion to the mean investment. If it can pay regular dividends (after not paying them for so long) and then get, I don't know, a 10% yield (??), it's pretty easy to see it trading a lot higher than it is today.

To: Paul Senior who wrote (62224)	7/23/2019 8:20:36 PM
From: Spekulatius	Read Replies (1) \| Respond to of 78462

Re mean reversion - I would tend to avoid anything with structural issues like for example retailing. I am fairly sure that retailing in 20 years will look different than it does today, so why should stocks reverse to the mean? I am also voiding energy stocks (except midstream). I haven’t owned any since 2015 and the whole sector is pretty value destructive, although I do admit it looks cheap. I would be more included to bet on mean reversion with stocks they are somewhat cyclical (BECN, RELL etc). I had some mean reversion plays they worked out for me. I recall WCC, which I bought late in 2015 and sold for 30%+ gain. the stock however wen almost all the way back down where I bought it (which was $45 or a bit lower back then). When I looked it again, I saw a business with a <10% ROIC and 3x EBITDA leverage and iffy cash generation. I could have made the same or more money playing GWW, which is a better business. So rather than cheap looking business, I rather wait until a better business sell off to at least a fair or better price. This happens from time to time, the last example being WFC. Even in the latter case, one could argue that buying JPM makes more sense.

To: Paul Senior who wrote (62224)	10/9/2019 1:59:49 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78462

I listed some of my current reversion-to-mean plays here recently. Only one of them has worked out favorably: LKQ, most of which shares I sold after the stock popped up when an activist investor announced he had begun an investment. (Stock has come back down; I may add if it drops further.) I hold positions in all exept JHG: I lost patience and gave up on JHG and sold at a small loss. I just added to SIVB. It's a Silcon Valley bank that funds startups. With the failure or disappointment in recent IPO's that have come to market (e.g. WeWork), perhaps the IPO market is tarnished and that has affected SIVB possible future business prospects. Or maybe not. I'll still bet on reversion-to-mean. 62224

To: Paul Senior who wrote (62224)	10/9/2019 2:25:47 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78462

Also, about GTE that was on my reversion-to-mean list: The company has had problems being an oil producer in Colombia and holding acreage in Ecuador. I have believed that most of those problems were related to production issues that the company could resolve (eventually). The stock has continued to drop, and as I looked at the company metrics (nav, cash flow, etc), the company seems to have become very undervalued. So... whereas I would consider it a reversion-to-mean play with the stock selling maybe at $2/sh., with the stock dropping to $1.45/sh recently, I've been buying more. And with its continuing fall, I've been adding to postions with about every .05 drop. a small position in total that is within a very diversified portfolio. Jmo, and I've been wrong many, many times. finance.yahoo.com