Black swan, ugly duckling, golden goose
Friends,
In the previous article, Kayden shared information about value investment with Black Swan.(Click here to read)
Tom Joe Black Swan-2
Allow me to share my views. Especially about the application.
Most experienced investors know that crisis is the most profitable time. Because there is no loss of property during this period, it is just easy. This is true of stocks, real estate, or almost any asset class you are proficient in.
Go back to one of them. “; black Swan”; only 10 years ago, the global financial crisis in 2007-2008.
Screenshot: 8.56.55 am, April 16, 2014
For a while, many stocks looked like “one”;. If possible, they look like ugly ducklings. Nobody wants them. Remember, some stocks have poor fundamentals. We will avoid it. Because almost all prices may be too high for bad companies. When I talk about the ugly duckling, these stocks will eventually become beautiful swans, or even better… golden geese. When is the best time to buy these stocks? Yes, they looked like ugly ducklings in the Black Swan incident.
Ugly Hero 432_243
Some examples of the ugly duckling
- CarMax Inc(KMX)
Screenshot: 9.06.58 am, April 16, 2014
When the stock began to fall in 2007, what did you guess investors did? Let’s look at some records.
a. Ruane Cunniff bought KMX at an average price of $23.5, up about 85% at present.
b. Warren Buffett also bought 85% of KMX at an average price of $23.5.
c. George Soros bought KMX on average by period, accounting for 108%.
d. Ron Baron bought KMX at an average price of more than $20, with a turnover rate of 80% to 100%.
c. The average purchase price of Akre is $20, and the transaction rate is about 100%.
- Monster Drink(MNST)
Screenshot: 9.26.16 am, April 16, 2014
Now who bought this ugly duckling in the Black Swan Crisis?
a. Ron Baron bought an average of $13.50, up 373%.
b. Jean Marie Empillard averagely 16.35%, 291% purchase
c. Joel Greenblat bought at an average of $9.35, up more than 500%.
d. Wallace Weitz bought about 200% at an average price of more than $16.
What is the lesson here? This can be traced back to Warren Burbank’s famous saying. ; greedy people should be afraid, and others should be afraid when they are greedy.
But for this, we must master our investment. Similarly, if you invest in a crisis, you can buy many ugly ducklings. These ducks become baby golden geese.
???????
Of course, value investment is a way to help us make profits in the stock market. In my opinion, I like how passive it is. Let me share it. This is really practical for people like me who value time freedom and don’t need to monitor and predict the next black swan.
In the black swan period, the golden goose will also become an ugly duckling. The coolest thing is that they still lay eggs.
Let’s give some examples.
- Coca Cola(KO)
Screenshot: 9.28.29 am, April 16, 2014
During the Black Swan period in 2007 and 2008, Coca Cola increased its dividend in the so-called crisis.
Screenshot 2014-04-16 9:00 a.m. 39.38
Therefore, in the case of Buffit, he has 40 million dollars, which are collected as follows:
2007 – $272 million dividends
2008 – $340 million in dividends
Well, it should be a little far away for individual investors like us. But if we accumulated 10000 Coca Cola shares in the past few years, how many would we gather?
2007 – $6800
2008 – $7,600
According to when to buy Coke, this may be a considerable income. And what can you do with this bonus at this time? good We can use them to buy more golden geese disguised as ugly ducklings!
Collect these golden geese that look like ugly ducklings. There are many examples that can help pass the next black swan period, but I never know when it will come. But personally, in recent years, I have accumulated enough cash assets to tide over difficulties easily.
Finally, as a value investor, I like the relatively stable and stable operation in the market over the years. Yes, despite the ups and downs, the company I bought is getting richer every year. This means that I am getting richer and richer. The stock market can be bad sometimes. Especially during the crisis. However, our company still performed well in terms of profits and dividends during this period. Although the stock price is not reflected in this period. But I like it. Because this means that I can collect more good business at a cheaper price during this period. For non value investors, it may look bad at this time, and the number of product portfolio may tell them that the situation is bad or they are losing money, but Ben Graham said the truth. “In the short term, the market is a voting machine, but in the long term, it is a weight measuring machine.
Take the Sequoia Fund of Ruane Cuniff for example.
Sequaia Fund Performance
Screenshot: 10.002 am, April 16, 2014
It can be seen from the above table that the fund is indeed “successful”. “Low”; software and P is – 37%. But all right, value investors like this time. Because it means we can buy ugly ducklings. In fact, they are golden geese. For example, it actively bought this golden goose in 2008.
Screenshot at 10:38 a.m. on April 16, 2014 Source: Gurufox.com
This may be the reason after 2008. You can see what they look like.
2009 – 15.38%
2010 – 19.5%
2011 – 13.19%
2012 -15.68%
2013 – 34.58%
Similarly, please view the results of other investors shared above. Please don’t believe me. I’m not always right. I don’t claim to be right. I’m just a comfortable investor. Above all, we must be ready for such a moment. I wish I had you!
Cheers!
Free VIP workshop – 300×233
For more information on how to invest, please visit the free investment seminar, website:
Sean Sean
- For details, see # sthash.wJ3oz3x5.dpuf
