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April 29, 2016

Check This Out

Check out this portfolio (see new adjustments), it may just impress. Not even a year has past and this portfolio is up more than 50%. The trick is to think old fashioned. Do you jump on all the latest bandwagons? Well don't, they almost always lose money. Are you excited by dirty metal bashing industries? Great, think like that. 

Here it is...http://www.siliconinvestor.com/portfolio.aspx?fid=521

Look at Trinity Industries, up over 70%. Caterpillar up 55%. Oshkosh up over 100%. You never hear people banging on about how great these companies are do you. Think margin of safety, I believe Trinity offers margin of safety based on its relatively cheap price compared to its peers. 

Update (@27/06/2017): I have adjusted the portfolio and decided to take most of my Caterpillar gains and invest those in Paccar which appears cheap for such a great company right now. My thinking here is that Caterpillar's restructuring will take some time while Paccar represents quality truck brands, and Paccar is still making money. I'm selling half of my Caterpillar shares, those that remain represent the bulk of what the 1,000 original shares cost in the first place. Think about that for a minute.....18 months after purchase, they've just about paid themselves off and I can go after another great company. Note that the performance of the whole portfolio now drops after this new position is taken, but the whole has grown by the gain made on sale from the Caterpillar sale. And think, where I'm based this capital gain is tax free.

Update (@13/08/2018): Note this portfolio is doing very well. If you check in from time to time you will see that each stock fluctuates, but over time they all do well. That's because they're conservative picks, run cautiously and adroitly. They're not the next big thing, which usually crashes soon enough.

Update (@2/09/2019): I have one bad performer, FreightCar America Inc., but we don't go along with selling in a panic, we're sticking with it.

Update (@20/03/2020): The markets have been severely impacted by the COVID-19 crisis, but this portfolio is still ahead, up 12.7% since inception. The lesson; hold conservative value stock like these. Caterpillar is still up 59%, Federal Signal by 102%.

(Note: These opinions are information only and do not constitute investment advice. If you need investment advice on these stocks or anything else for that matter, talk to your recognised and professional investment adviser. Better still, do your own research and act on it confident in your own ability.)

April 28, 2016

New Zealand Investors

I've been thinking long and hard about the Auckland house price inflation. The banks have a role to play, they're willing to lend on real estate almost exclusively. But the way the New Zealand investment landscape is structured also has a major part to play.

Broadly speaking a New Zealand investor has three options:-

1. Buy investment real estate,
2. Start or buy a business, and;
3. Invest in shares, bonds, bank deposits or government stock - passive investment in other words.

Before any of the three are implemented, paying off debt must be a priority. Assuming that is achieved (at least substantially), and the investor maintains a sensible retirement superannuation account, then the three options present themselves this way:-

1. The investor buys houses or residential flats and apartments. The ideal is to invest in industrial and possibly commercial real estate, but the reality is residential purchases are easy to achieve. It's easier for a small investor to get their foot in the door with residential property. For starters, they needn't be registered for Goods and Services Tax (GST).

2. Buying or starting up a business is limited by the experience of the investor and the size of the market. Some people can't run a business or they don't have skills in the right areas to do so. It's a risky option for most.

3. Then lastly, they can access the New Zealand and Australian stock exchange listed companies very cheaply and easily. They only pay tax on those gains that are realised (if long-term investment then only the dividends are taxed). Outside of that however, if the investor buys shares in companies listed on the NYSE, Nasdaq, LSE, Borse Frankfurt or elsewhere, then over a certain threshold they'll pay tax on gains when they occur, not only when realised.

Conclusion:

Investors are strongly encouraged to invest in real estate, which has to impact Auckland house prices, given the size of that market. Investors cannot start or buy a business as the opportunities are scarce, given the relatively small scale of commerce in New Zealand. Allied to that, investors are discouraged from spreading their net wider, effectively limiting their share investments to the local scene. No wonder then that investor money pours into Auckland housing and real estate in general.

Recommendation:

Allow investors to invest in shares outside of New Zealand, on the same basis as they invest in shares listed in Australia, that is, invest in any company listed on recognised exchanges in the USA, Canada, Japan, the U.K., and Germany (elsewhere by approval). By doing this, money would be diverted from the overheated Auckland housing market. The effect would be to lessen demand for Auckland houses, and prices would stabilise.

(The change to NZ's tax regime regarding investment in foreign shares has had a knock-on effect to the Auckland housing market. This is the law of unintended consequences)

Edit to add (off the topic but looking at investment as a NZer investing overseas)...

The following NZ Herald article traverses many of the issues a NZ investor faces when investing overseas...http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10738730

The article mentions hedging, and what I've done in the past is not very sophisticated but effective, I've maintained a US Dollar account with a NZ bank. You're not dealing with a foreign desk, but the money is effectively offshore. Many people do not realise they can have a US Dollar account with a NZ bank. The good part of this is you get higher level people within the bank with better advice attached (the down side is that over a certain amount your name gets on lists in New York and you'll be bugged by investment houses on Wall Street. This is a freedom of information thing, I recall an outfit by the name of Whale Securities was one such calling all the time - look them up they were on Wall Street - you have to develop a thick skin and know how to say no).

Most 'experts' recommend using funds, such as unit trusts. My experience is they don't do that well. I'd guess my returns over a 20 or more year period would be about 1% annually going down that road. Don't be sold unit trusts.


Azealia Banks on Lemonade

I like Azealia Banks. I think she's very talented. Recently she's come in for a bit of stick over her attack on Beyonce's visual album Lemonade.

It appears obvious to me that Beyonce has borrowed Banks's style and imagery in her recent work. No doubt about it as far as I'm concerned.

It reminds me that Meghan Trainor's video for All About That Bass had the same visual style as the much earlier Cameo Lover by Kimbra.

File this under 'ideas are stolen all the time.'

April 26, 2016

Auckland House Prices

More news about house price rises in Auckland. I'm still amazed that this issue has not been presented accurately by the media. Is this because they also own houses in Auckland?

The situation is this - inflation is out of control. Residential housing was dropped as a link to the CPI (Consumer Price Index) some time ago. If it was still there we'd be seeing inflation like that of the mid-1980's, not this silly 0-2% we have reported now. 

It's monetary inflation, the banks are pumping cash into the system. It's ever increasing flows of cash chasing the same stock of housing. It can't go on as incomes will not be able to service the debt. New Zealand is headed for a bust.

April 25, 2016

Obama Increases Military in Syria

Barack Obama is committing more US troops to fight ISIL:-

http://www.theguardian.com/us-news/2016/apr/25/barack-obama-us-soldiers-islamic-state-syria

Is this validation of the Russian approach?

Whatever the case for removing Assad and his regime, can we all agree that ISIL need to be eradicated.

April 22, 2016

Risky ASX Stocks Worth Checking Out

These two companies have had serious issues of late, but they're worth a look. They're in Australia and listed on the Australian Securities Exchange:-

1. Bradken


They've been impacted by the mining collapse. They're a foundry and general engineering business, making railway equipment and the like. I call these stocks metal bashing industries.


No dividend, they don't make money. This stock is a total punt. When doing well though you can expect a price over AUS $6.00. From their current 84 cents, that's a staggering return if you're lucky.


2. Macmahon


Macmahon has also been impacted by the mining collapse. Their business is providing mining services. They're the contractor on site actually doing the work. They have the mining machines; drill and blast, crushing and screening, materials handling, mine planning, you name it. From the current 12 cents, if they come back (they may not, be warned), you're looking at a price in excess of a dollar.


These stocks do not afford the investor any margin of safety. They're a gamble. Check them out as I think you'll find they're better than you expected.


[Update @ 24 March 2019; I see people are now seeing this post from years back, check this: Macmahon are still a punt at 23 cents (100% gain from my tip), while Bradken were taken over by Hitachi for $3.25 per share, which is a gain from the tip of 386% = beat that!!]

April 17, 2016

Pioneer Railcorp

This is not a pick. I'm asking, what is the company Pioneer Railcorp for exactly? It has a market cap' of just over $28 mil',  owning a few small rail lines and associated businesses. It can be found on the OTC market....

http://www.google.com/finance?cid=660692


The company's home page....


http://www.pioneer-railcorp.com


I found a reference to them in this blog post... http://www.oddballstocks.com/2012/09/egregious-management-behavior.html


The guy named as chairman on the Google Finance page above is actually dead. He died back in 2013. You can find his obituary here...http://www.legacy.com/obituaries/pjstar/obituary.aspx?pid=167184418


Weird huh. Can anyone enlighten me?


April 14, 2016

Golden State Warriors

Congrats Warriors players and fans. 73 wins in a season. that's one hell of a lot of basketball.

Now opponents, shut down Steph Curry will ya. Like, put someone on him, and I mean on him, those long looks he's getting are gifting him points each game. He's going to sink those baskets, you have got to get in his face.



April 13, 2016

Three Industrial Picks

On the back of my outstanding success picking my last industrial stocks, I thought I'd stick my neck out and give it a go again. This time won't be so easy, but each company has a lot going for it.

1. Emerson Electric Co (NYSE: EMR)

When I mention this company I always start by saying they make InSinkErator. Everyone knows that name, right? But they make so much more, this is a true industrial giant. The great Ben Graham liked this company and he goes on about them in his seminal book The Intelligent Investor. Think margin of safety here. There isn't much to go wrong. But over time your investment will grow in value if you hold and buy low enough. They're not real cheap, but with a P/E of 14.33, they're not expensive either.

2. Oshkosh Corp (NYSE: OSK)

Not a clothing brand. They make trucks, fire and access equipment, military gear, waste trucks. Think of those glorious airport fire tenders, or the front loading waste trucks, they make them. But also army trucks. There's a lot to like about this business, they make quality stuff. Their dividend yield is not as good as Emerson though, so go underweight in them for that reason.

3. Trinity Industries Inc (NYSE: TRN

Based in Dallas Texas, you never hear this company talked about. It's a great business. They make railway equipment, inland barges, and expanded shale for lightweight concrete. They also make transport equipment, such as those roadside barriers. This last area is where the story gets interesting, a private prosecution was successful (subject to appeal no doubt) in proving their Texas A&M engineering designed barriers were unsafe. Now I'm not going to say whether the result was correct or not, simply because I don't know. But what is worth mentioning here is that news like that punishes a company hard, and they're bleeding while still remaining profitable and comfortably so. They sit on a P/E of 3.99 at present. Can you believe that? What about buying the whole thing, lock stock? It's a bargain with a market capitalisation under 3 billion. Realistically that would work out at 5 as any takeover would lift the price. 

(Note: These opinions are information only and do not constitute investment advice. If you need investment advice on these stocks or anything else for that matter, talk to your recognised and professional investment adviser. Better still, do your own research and act on it confident in your own ability.)

April 11, 2016

Joy Global Tip and Deere

Earlier this year I added two companies to my tips, in addition to Caterpillar. They were Joy Global and Deere. If my readers had acted on this tip the next day, the following would have resulted by the close of trading on the 8th of April:-

Joy Global has returned 61.25% to investors in capital gain in just over two months.

Deere has returned 5.99% in capital gain.

Now I realise this is a very short time period. These are stocks to buy and hold for the long term, with Joy Global being the most vulnerable amongst the stocks I've tipped (biggest risk, also biggest gain, that's the way it goes, it could also flip the other way).

But get this, if you had invested an equal amount in each tip, you'd have made 50% excluding any dividend in just a few short months. 

I'm good at this, very good. 
(Note: These opinions are information only and do not constitute investment advice. If you need investment advice on these stocks or anything else for that matter, talk to your recognised and professional investment adviser. Better still, do your own research and act on it confident in your own ability.)

Caterpillar Tip

I tipped Caterpillar (NYSE: CAT ) back on Saturday Sept., 26 2015. If you read that post and acted on it the next Monday, then at the Friday April 8 close you'd have a 16.55% return on your investment through capital gain alone (not counting any dividend, one qualifying payment in that period).

(Note: These opinions are information only and do not constitute investment advice. If you need investment advice on these stocks or anything else for that matter, talk to your recognised and professional investment adviser. Better still, do your own research and act on it confident in your own ability.)

April 10, 2016

Basketball NBA Games

Do you think there is a tacit agreement if not an explicit one amongst teams in the NBA, that says to leave star players open?

Specifically; I'm referring to players like Steph Curry. He gets a lot of time on his looks at the basket. Wouldn't it make sense to have someone on him the whole time?

Seems guys like Curry get long looks. Just saying.

April 08, 2016

Wikipedia Being Stupid Again

Another case of lies, damn lies and statistics over at Wikipedia, the font of all made up shit.

I wanted to quickly look up who are the most accurate NBA free throw shooters. Problem, two sites give completely different lists. That's right, completely different.

Basketball Reference.com say the top four are:-

1. Steve Nash 90.43%
2. Mark Price 90.39%
3. Stephen Curry 90.09%
4. Rick Barry 89.98%

Wikipedia say the top four are:-

1. Chauncy Billups 89.4%
2. Reggie Miller 88.8%
3. Kevin Durant 88.2%
4. Dirk Nowitzki 87.9%

(bold is an active player in the NBA)

What's going on? Well it looks like the guys at Wikipedia have set some kind of arbitrary benchmark. You know, the players on their list seem to have more free throws made in total. It looks like players have to have 4,000 baskets or thereabouts.

Why is this stupid? It's stupid because this kind of thinking does not recognise roles played, the era of the game, and such. Back in Rick Barry's day the game was much rougher, you didn't get to go to the line as often, and if you did you were likely hurt. 

In the modern era, someone like Steph Curry makes his basket, gets fouled and steps to the line for the extra one. Many players today miss that basket and get two or three extras each game as the officials call fouls more often. Get the idea?

By setting the bar too high, they erase so much history. It's a bloody disgrace. In future I'll be relying on Basketball Reference.

I can see why academics don't approve of Wikipedia. You can't trust it.

April 01, 2016

Did Prince Charles and Camilla Have a Child?

Simon Dorante-Day is an Australian born in England, who claims to be the first born son of Prince Charles. It is claimed his birth mother is Camilla Shand, later the Duchess of Cornwall and Prince Charles's second wife. You would likely know her as Camilla Parker Bowles (she was first married to Andrew Parker Bowles).

See an interview with Dorante-Day in the embedded link below, this is the latest interview as of 29th April 2021:



(the link from Australia's Seven Network Sunrise show has been removed as they no longer run the story, if anyone has a good link to a video about this story I'd appreciate a heads-up. 

Update: this is back in the news in 2021 and I have this link which also carries video https://www.perthnow.com.au/news/royal-family/royal-mystery-simon-dorante-day-claims-he-is-the-secret-love-child-of-prince-charles-and-camilla-ng-b881857373z

The story goes that Camilla, who is a little older than Charles, got pregnant and gave birth to a son in April 1966. She would have been 18. The boy, it is claimed, was adopted out at about the age of 18 months. He was placed with a family that had connections with royals, as servants.

If this story is true it raises several questions:

1. Were Charles and Camilla married in secret before the child was born?

If they were married then Simon Dorante-Day is the legitimate heir to the throne of England, head of the Church of England - yes all that. Charles would have been a bigamist or divorced when he married Diana and his two sons would be disqualified (sorry William and Harry).

Here's the thing, Simon Dorante-Day appears to now have aboriginal connections, he has nine children, are any of them aboriginal Australians? It appears unclear, but his children may be in line to the throne. Can you see Britain putting a black Australian on the throne? Yeah right!!!

[Edit to add; if Dorante-Day was born illegitimate, does Charles's later marriage to Camilla legitimise this child by her and thus set up a whole new line of succession? That is, if the claim is true. 

And if it doesn't automatically set up a new line of succession immediately, does this newly discovered descendant line take precedence when Charles becomes King. That is, the King being above the law and all that. Do you see? In this case his descendants by way of Camilla are a shadow on the wall until he ascends the throne, whereupon the shadow becomes a physical presence in the room. You could end up in a situation where the King and Queen have a son who cannot be heir, but another son, who may not even be biologically his, ascending to the throne when he dies. Think about it, which is better, the first born son to his legally married parents, or another, in this case William.]

2. Was Princess Diana killed because of what she knew? Was she going to blow the lid on everything? It is rumoured Charles had other children as well, but of course they'd be illegitimate so not in line.

And what of Diana, are her children biologically Prince Charles's?  Hmm? We could find here that Simon Dorante-Day is the eldest biological child of Prince Charles, legitimate or otherwise and that none of Diana's are his.

[Edit to add; thinking about this some more, what if Diana didn't want her children to be in line to the throne. She wanted to marry Dodi Al-Fayed, a bit of a problem that, given he was the son of a dubious businessman and a Muslim. So how about she planned to first get rid of her children as heirs before marrying Dodi. Perhaps she was going to reveal that Charles married Camilla in the eyes of God, a church or chapel ceremony not backed up by marriage certificate, and that in the eyes of God, another man was the rightful heir. Get the idea? Prince Philip has always been accused of arranging the hit, and he did that because of the threat she posed to his bloodline. What do you think?] 

3. Can this Australian demand a DNA? You betcha, Charles isn't King yet, he's still within the reach of the law. And does anyone believe such a test would be done honestly if he was the son of Charles? I mean, really? Do you believe that?

The only way such a thing could happen is if Her Majesty was sufficiently sick of the inbred fools and demanded the proof be provided, to refresh their gene pool. Otherwise it ain't gonna happen.

[Edit to add Feb 2 2019: I noticed that this blog post has taken off again in term of readership, and checking this I find Mr Dorante-Day is back in the news: https://www.newidea.com.au/camillas-secret-son-bombshell-picture-proof The picture just published does bear a resemblance to both Camilla and her son by Andrew Parker Bowles.]

[Edit to add Sept 20 2022: here's the latest from Australia on the claims made by Simon Dorante-Day, taking into account the death of the Queen, and King Charles ascending to the throne. https://youtu.be/cVWjqmyCPJw ]