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  • Does buying into panic work? | Doddsville
    only 3 stocks I purchased during that time as well were CPU MQG and QBE and CPU was the only one I hadn t previously owned Personally I find when there is an increase in panic it helps focus my attention and having a watchlist or shortlist helps me decide on which stocks to focus my attention and or buy Reply Beau Reply September 1st 2011 at 8 50 am Hilarious I experienced this exact scenario as well Positive reinforcement of my purchase decision Reply charlie said Posted August 30 2011 at 5 21 pm hi mate based on your motivation behind purchasing Noni B how much emphasis do you place on revenue v market cap the same motivation would assume companies such as paperlinx capped 63m ignoring preference shares with revenue of 4 63b or hastie capped at 164m with revenue of 1 85b would be attrative as well Reply James Greenhalgh TII Reply August 30th 2011 at 5 29 pm It s more about making some assumptions about possible future margins earned on revenue Price to sales is but one valuation short cut so undue reliance on it is obviously not a good idea I m certainly not interested in either Paperlinx or Hastie based on their price to sales ratios Reply Gareth Brown TII said Posted August 30 2011 at 10 14 pm I d love to hear more on why you prefer stock specific panics to market panics James I like either and have found opportunities in both But I suspect that genuine baby thrown out with the bathwater opportunities are more likely to be found in a broad market panic when stocks are being sold for reasons other than underlying fundamentals While there s often overreaction to be taken advantage of there s usually also an element of truth behind stock specific panics In contrast broader market panics can deliver stocks with no underlying problems at bargain prices Of course I ll take either and the size of the bargain is what counts But would love to hear why you prefer the stock specific variety in general Reply James Greenhalgh TII Reply September 1st 2011 at 2 30 pm It s really just my general observations of what has worked in my portfolio I obviously only have a small sample size as market panics are relatively rare but I ve found no general advantage buying on panic days In the cases I ve bought on panic days I could just have waited a week or a few years and got the stock cheaper My best purchases have been out of favour stocks independent of what the market was doing at the time e g technology stocks in 2003 or Flight Centre in 2009 Buying on panic days seems to me about as logical as selling a stock because the market has jumped 3 in a day for example It risks getting the cart before the horse I think investors should be buying stocks because they

    Original URL path: http://blog.intelligentinvestor.com.au/doddsville/does-buying-into-panic-work/ (2013-02-03)
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  • Anchoring | Doddsville
    is where they share their thoughts and gather feedback about their ASX research at Intelligent Investor Search Connect with us Recent Posts The origins of Passport Capital 15 568 days to the end of oil The worst deal I ve ever seen Doddsville podcast 20 December 2012 Best books of 2012 Recent Comments James Carlisle II commented on 15 568 days to the end of oil Samson commented on Harvey Norman crisis approaching David commented on 15 568 days to the end of oil James Carlisle II commented on 15 568 days to the end of oil Nick Earls commented on 15 568 days to the end of oil Links Bristlemouth Gravy Train How To Invest Intelligent Investor Value Fund Walnut Report Authors Select Category Banking 3 Currency 5 Debt 9 Doddsville Podcast 36 Featured 4 Gareth Brown 48 Gaurav Sodhi 67 Greg Hoffman 27 International investing 10 James Carlisle 3 James Greenhalgh 56 Jason Prowd 18 John Addis 3 Lists 3 Macro environment 16 Management 21 Nathan Bell 43 Opinion 42 Portfolio management 7 Property 1 psychology 8 Resources 21 retail 11 Review 2 Stocks 58 Strategy 9 Telecommunications 1 Tim Searles 1 Twitter Wrap 25 Uncategorized 11 Value

    Original URL path: http://blog.intelligentinvestor.com.au/doddsville/tag/anchoring/ (2013-02-03)
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  • Learn to love bad news then buy big | Doddsville
    of sorts seeking public opinion for possible government action Take the recent GST on imported goods debate In that case however I don t believe the government will act given the negative public sentiment nor do I believe the perceived problem will have a material effect on profits or at least it can be overcome in other ways Reply Justin O Kane Reply February 7th 2011 at 12 17 pm I know it is a bit side tracked form the topic but funny you should explain it that way Liam because that is exactly what ARB have just tried to do in their 25th January 2011 email Bull Bars Under Threat in response to the proposed new Federal Government regulations which are based on rules developed for the European environment and road conditions by the United Nations Economic Cooperation for Europe UNECE Reply Eswaran said Posted February 4 2011 at 7 32 pm Ultimately the investors main job here is firstly picking the quality stock There is no point in buying big with bad news unless you buy RIGHT That is by far the hardest decision from what I have read really this boils down to stocks with amongst other things 1 rising EPS 2 rising DPS 3 consistent and preferably rising ROE 4 low long term debt 5 quality management this is probably the hardest 6 reducing number of shares on issue How many stocks have these characteristics not many especially here in Australia Look overseas especially the US and you fill find many companies Put them in a watch list and wait eg Pepsi Walmart General Dynamics Medtronic Aeropostale Reply Mars Reply February 7th 2011 at 11 52 am That s all well and good Eswaran but generally the bad news is accompanied by some factor that is causing downward pressure on earnings and thus also on EPS DPS and ROE So the question becomes is this a temporary phenomenon and does the price assume a permanent shift Or if it is a permanent shift is the current price below my expected value based on a future that is gloomier than the past For example I don t think it is prudent to assume that HVN future ROE will be similar to its past What I m hoping is that the market will present us with a price that assumes HVN has no enduring future at all It s always about paying less than a cautious prudent estimation of value Reply Eswaran Reply February 7th 2011 at 1 04 pm Actually negative sentiment can occur in some stocks that are still showing rise in EPS During the GFC the US companies I mentioned all had and still have rising EPS amongst all those other features of a good company that I mentioned with the exception of PEP and yet were sold down Look beyond Australia and companies like HVN You do not have to take the risk of a HVN when there are and were companies like these that showed no slow down in EPS growth Reply David Groom said Posted February 5 2011 at 8 43 pm James I think this is an excellent topic as it brings many critical issues to the surface Some that come to mind are investing big when terrified who is on other side of the trade have I missed something in my analysis the value of keeping dry powder for prolonged periods while every punter seems to be making easy money the courage to go against the crowd timing and size of purchases and advantages of an individual compared to someone who is managing other people s money and the pressure they must feel to not sit on a cash box I do believe that to get big outsized returns it is greatly aided by having big swings at fat pitches As Justin says that does require having done a certain amount of work to come up with a valuation I would argue that buying good companies at reasonable prices will underperform buying good companies at dirt cheap prices Mr Market does occassionally throw these opportunites up and this is what I see this blog as being about How do you set yourself up for the next fat pitch How will I feel at that time and what will the environment be like For me it is about the preparation and being able to maximize future possible opportunities I do now try to allocate less cash to mildly undervalued opportunities and continue to purchase stock if the price drops and the story remains the same It becomes more tricky where the story changes and fear starts to set in Personal experiences with FLT and MAP have been very rewarding As the price of these stocks dropped I did have the conviction to continue buying stock however there were very good reasons to be scared FLT were buying bike stores the boss had moved to the back seat they were writing down US assets that they purchased as part of a transaction dividends were smashed and TII was talking about online threats MAP had issues with asset valuation based on related party transactions and doubt about rolling over debt or ability to refinance Although I continued buying and am very pleased I did I was scared and didn t have the courage to have bigger bets on the way down So what do I learn from this Do your own analysis The best returns are available when there is maximum fear Next time have the courage to double down Continue to subscribe to TII as I would never have found FLT MAP PIH QBE without their help Reply James Greenhalgh TII Reply February 7th 2011 at 10 55 am Hi David I completely agree with your point about needing to have conviction even in the face of very good reasons to be scared There are always reasons to be fearful when a stock is plunging and the key is overcoming indeed valuing

    Original URL path: http://blog.intelligentinvestor.com.au/doddsville/learn-to-love-bad-news-then-buy-big/ (2013-02-03)
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  • Numbers and scepticism | Doddsville
    variety of problems like uncovering corruption in sumo wrestling and falling crime rates This article in American Scientist caught my attention precisely because it s critical of a subject I m fond of It s worth reading because the authors reveal mistakes gleaned from the Freakonomics formula and renew the call to scepticism when numbers are concerned Perhaps most importantly for investors they remind us that even if we are devoted to a particular source we shouldn t be shy about questioning it VN F 1 9 20 1166 please wait Rating 4 3 5 7 votes cast Numbers and scepticism 4 3 out of 5 based on 7 ratings This entry was written by Gaurav Sodhi TII posted on at 1 47 pm filed under Gaurav Sodhi psychology and tagged economics scepticism statistics Bookmark the permalink Follow any comments here with the RSS feed for this post Post a comment or leave a trackback Trackback URL Lessons in Tesco travails for Woolies Previous Entry Prediction Death of the DVD kiosk Next Entry Leave a Comment Your email is never shared Required fields are marked Your Name Email Website Optional Your Comment Click to cancel reply Intelligent Investor Analysts Nathan Bell research director works alongside Gareth Brown James Greenhalgh Gaurav Sodhi and Jason Prowd This blog is where they share their thoughts and gather feedback about their ASX research at Intelligent Investor Search Connect with us Recent Posts The origins of Passport Capital 15 568 days to the end of oil The worst deal I ve ever seen Doddsville podcast 20 December 2012 Best books of 2012 Recent Comments James Carlisle II commented on 15 568 days to the end of oil Samson commented on Harvey Norman crisis approaching David commented on 15 568 days to the end of oil

    Original URL path: http://blog.intelligentinvestor.com.au/doddsville/numbers-and-scepticism/ (2013-02-03)
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  • Economics | Doddsville
    Brown James Greenhalgh Gaurav Sodhi and Jason Prowd This blog is where they share their thoughts and gather feedback about their ASX research at Intelligent Investor Search Connect with us Recent Posts The origins of Passport Capital 15 568 days to the end of oil The worst deal I ve ever seen Doddsville podcast 20 December 2012 Best books of 2012 Recent Comments James Carlisle II commented on 15 568 days to the end of oil Samson commented on Harvey Norman crisis approaching David commented on 15 568 days to the end of oil James Carlisle II commented on 15 568 days to the end of oil Nick Earls commented on 15 568 days to the end of oil Links Bristlemouth Gravy Train How To Invest Intelligent Investor Value Fund Walnut Report Authors Select Category Banking 3 Currency 5 Debt 9 Doddsville Podcast 36 Featured 4 Gareth Brown 48 Gaurav Sodhi 67 Greg Hoffman 27 International investing 10 James Carlisle 3 James Greenhalgh 56 Jason Prowd 18 John Addis 3 Lists 3 Macro environment 16 Management 21 Nathan Bell 43 Opinion 42 Portfolio management 7 Property 1 psychology 8 Resources 21 retail 11 Review 2 Stocks 58 Strategy 9 Telecommunications

    Original URL path: http://blog.intelligentinvestor.com.au/doddsville/tag/economics/ (2013-02-03)
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  • Scepticism | Doddsville
    of oil The worst deal I ve ever seen Doddsville podcast 20 December 2012 Best books of 2012 Recent Comments James Carlisle II commented on 15 568 days to the end of oil Samson commented on Harvey Norman crisis approaching David commented on 15 568 days to the end of oil James Carlisle II commented on 15 568 days to the end of oil Nick Earls commented on 15 568 days to the end of oil Links Bristlemouth Gravy Train How To Invest Intelligent Investor Value Fund Walnut Report Authors Select Category Banking 3 Currency 5 Debt 9 Doddsville Podcast 36 Featured 4 Gareth Brown 48 Gaurav Sodhi 67 Greg Hoffman 27 International investing 10 James Carlisle 3 James Greenhalgh 56 Jason Prowd 18 John Addis 3 Lists 3 Macro environment 16 Management 21 Nathan Bell 43 Opinion 42 Portfolio management 7 Property 1 psychology 8 Resources 21 retail 11 Review 2 Stocks 58 Strategy 9 Telecommunications 1 Tim Searles 1 Twitter Wrap 25 Uncategorized 11 Value investing theory 7 Wayne Jones guest contributor 1 About Nathan Bell research director works alongside Gareth Brown James Greenhalgh and Gaurav Sodhi This blog is where they share their thoughts and gather feedback

    Original URL path: http://blog.intelligentinvestor.com.au/doddsville/tag/scepticism/ (2013-02-03)
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  • The limits of monetary incentives | Doddsville
    5 14 votes cast The limits of monetary incentives 4 1 out of 5 based on 14 ratings This entry was written by Gaurav Sodhi TII posted on at 1 20 pm filed under Gaurav Sodhi psychology and tagged behaviour incentives Psychology Bookmark the permalink Follow any comments here with the RSS feed for this post Post a comment or leave a trackback Trackback URL Overseas brokerage Previous Entry Doddsville podcast 24 November Next Entry 5 Responses Add Yours Discussion JohnC said Posted December 6 2011 at 8 53 pm There seems to be two primary incompatible drivers behind human decision making 1 Identity who you identify yourself as and with and what you must do to be consistent with that self perception 2 Self interest weighing the pros and cons based on information availability and recency with a touch of intuition mental short cutting Reply Ee Poh Fong said Posted December 6 2011 at 10 10 pm Interesting Parents were willing to pay the fine in order to be allowed to be late purely a case of rational economics in my view Reply Mars said Posted December 7 2011 at 5 02 pm What a fantastic little anecdote Isn t it amazing that in spite of this sort of evidence and the common sense of most people the corporate world keeps insisting that huge salaries are necessary to attract retain the best people Good to Great the book James Greenhalgh recently read puts it all very nicely The big salaries might attract and retain the show ponies but it s really plow horses that will get the long term results Reply Keith64 said Posted December 9 2011 at 12 05 pm Mars thank you for relating this simple experiment to an important real world situation While a bank board might believe that paying their CEO more than another bank s CEO proves that they are a better bank I find it difficult to believe that the CEOs individually are motivated to achieve success for their bank because they are offered an extra 1M a year or a few hundred thousand more options After the first million or so their motivation for meeting or beating targets is probably a mix of ego and a desire to demonstrate their leadership capabilities Reply Jason Prowd TII said Posted December 14 2011 at 10 01 am Nice post Gaurav I find this research into human motivation tremendously interesting It s funny how differently we behave depending on how we classify a decision Remember the Rudd bucks we all received back in 2009 Most of my friends treated it as free money which in a way it was and spent it differently to money earned via work Also following on from Mars comment above Dan Pink s done some surprising research into pay and incentives If you have a spare 10 minutes this video http www youtube com watch v u6XAPnuFjJc feature player embedded is well worth watching Reply Leave a Comment Your email

    Original URL path: http://blog.intelligentinvestor.com.au/doddsville/the-limits-of-monetary-incentives/ (2013-02-03)
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  • Behaviour | Doddsville
    days to the end of oil The worst deal I ve ever seen Doddsville podcast 20 December 2012 Best books of 2012 Recent Comments James Carlisle II commented on 15 568 days to the end of oil Samson commented on Harvey Norman crisis approaching David commented on 15 568 days to the end of oil James Carlisle II commented on 15 568 days to the end of oil Nick Earls commented on 15 568 days to the end of oil Links Bristlemouth Gravy Train How To Invest Intelligent Investor Value Fund Walnut Report Authors Select Category Banking 3 Currency 5 Debt 9 Doddsville Podcast 36 Featured 4 Gareth Brown 48 Gaurav Sodhi 67 Greg Hoffman 27 International investing 10 James Carlisle 3 James Greenhalgh 56 Jason Prowd 18 John Addis 3 Lists 3 Macro environment 16 Management 21 Nathan Bell 43 Opinion 42 Portfolio management 7 Property 1 psychology 8 Resources 21 retail 11 Review 2 Stocks 58 Strategy 9 Telecommunications 1 Tim Searles 1 Twitter Wrap 25 Uncategorized 11 Value investing theory 7 Wayne Jones guest contributor 1 About Nathan Bell research director works alongside Gareth Brown James Greenhalgh and Gaurav Sodhi This blog is where they share their

    Original URL path: http://blog.intelligentinvestor.com.au/doddsville/tag/behaviour/ (2013-02-03)
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