Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
ic152
I invest money that I don't need for 10 years or so. I live below my means and invest or save any surplus. I'd just save a cash reserve (if you can) and let your investments run. This one will reach £2 a share. I just cannot tell you when. Probably in 1-3 years time. Say this is £2 a share in 3 years time. It's a market-beating return. And that's all I care about. The rest are just the cherry on top of the cake. Sometimes, they turn into a black-forest gateau (see my position with AAPL), but that's never something to be expected.
Hi Velo,
There isn't much to say tbh. You know I don't think much of diversification.
In 2005 I ran the figures on AAPL and noticed that PEG < 1, ROIC > 15%, no debt and they grew their net profits by 20-30% each quarter.
Situations like this don't come along very often.
It was a classic Ben Graham play. What was interesting is how prejudice prevented many from seeing the exceptional situation at hand.
I sold in 2012 because:
1 - I made a large puchase
2 - one key component of my thesis disappeared (management/innovation). Steve Jobs died and the company went nowhere. I would not invest in AAPL today for eg
What did I do during the 2008 crash? Nothing. I may have bought a bit more but I don't remember any more. I definitely didn't sell. I 'sat'
So it pays to wait and let compounding perform it's magic.
Patience. Patience is one of the most overlooked traits for successful investing.
I know it will substantially grow over time, but I cannot tell you how much it will be by when.
Some of the old masters at this game expressed it rather succinctly.
“The stock market remains an exceptionally efficient mechanism
for the transfer of wealth from the impatient to the patient.”
— Warren Buffett
“In the short run, the market is a voting machine but in the long run, it is a weighing machine.”
? Benjamin Graham
“Investing is where you find a few great companies and then sit on your ass.”
— Charlie Munger
And whilst I am “sitting”, the only consideration is whether current prices warrant an expansion of the position.
Amazing how people are spooked when good companies go on sale.
For what it’s worth, I pointed this out on a different forum when a good company got a haircut to 350p, only to be branded as dishonest by some tormented soul. It’s trading at 850p now. The same with another company back in 2005, where I published my thesis only to be branded as fanboy. Imagine having 50% of your portfolio in AAPL stock at 2005 price levels holding for 12 years.
Patience pays off.
A business like this doesn’t change overnight unless there is an extraordinary global event. And nor will car tech and global logistics.
Hi GTX1
Such manipulations, at best, have only short term effects. Long term, this position chuggers away nicely towards market beating returns.
I’m not worried in the slightest.
Hi Velo
I looked into purchasing an ekectric car and found them unsuitable hor long distance travel. Quoted ranges are for 45mph. At 70mph, the range almost halves.
As city runarounds for private use, EVs are rather good. for everything else the next best option is a hybrid, and thus in need of a catlytic converter.
Global chip shortage had a negative impact on car production. some had to considerately scale back. A rather unprecedented event.
One woukd expect the chip draught to finish in a couple of years max. It would not be unreasonable treating this as a temporary setback.
Andvlets not have any false hooes on hydrogen either. The engineering challenges are considerable. H2 has a tendency of corroding pipework for eg. These challenges are amongst the reason why tge US has failed to buil a hydrogen economy, as it set out to do in earnest in 2003. Ask Robert Zubrin at NASA, has has ample experience working with H2 engines.
I would expect demand to pick up considerably as new chip manufacturing facilities come online.
Oops, indeed, i discounted from the wrong end.
Chatmandu is right.
Showing the previous step: 100 /(1.0-0.6) = x
Where 0.6 is the percentage expressed as ddecimal, in our case the 60%
Either way, whatever valuation method one uses, one still attempts to calculate the incalculable, namely the future.
They remain whatever they are. Estimates. For SLP these are so large, that the expected upside handsomely outweighs the downside.
One just doesn't know when this will happen. The guesswork always makes for interesting games...
Re share buyback programme.... from the horse's mouth:
"Through the buybacks over the last six years we have been able not only to prevent the dilution from options vesting, but we have been able to grant around 12 million shares to senior employees and we have cancelled approximately 11 million shares. The Treasury holding now covers all historical awards and enables the Company to create the newly-launched Employee Dividend Entitlement Scheme for all junior and mid-level employees. "
Not much has changed apart from price.
Is the business intact? yes
Is the board competent? yes
Is Rh supply in deficit? yes
Is the valuation favourable? yes
Have the earnings improved over last year? yes
Will the price hit xxx in xxx time? I have no idea, but the likelyhood is that the returns will be market beating over time.
Also, bear in mind that there is quite a bit of nervousness around many of government schemes stopping or scaling back their support for COVID impact. This can have negative impact on consumer confidence in the short term.
A global chip shortage is also a consideration. Again, a short-term impact but it led manufacturers to scale back production significantly. It won't have much of a long term impact though because
1 - chip production will catch up
2 - EV's are not a universal solution yet. The quoted ranges are for average speeds of 45 mph -- which makes it impractical for long distance travel or transport. Many will have to opt for hybrid at best.
When prices drop, fear often sets in when one has no thesis or done valuations of their own. It's worth to remember Ben Grahams words: "...in the short run, the market is like a voting machine--tallying up which firms are popular and unpopular. But in the long run, the market is like a weighing machine--assessing the substance of a company."
Patience is a virtue of every successful investor.
Hi Quiggers52
Yes. We should cheer if the market is irrational enough and offer us 100p for the price of 1p. I doubt we will be so lucky though.
However, this is only possible when the business is intact, has good future prospects and not an exhorbitanty high valuation.
SLP ticks all these boxes. In fact, it's difficult to see it going lower, but we've all been there over the years.
You can really only do this with top quality companies. And SLP is in that bag.
So yes, 1p for the share? Anyone care to sell it to me pls?
I'd be delighted.
Chatmandu
I am not sure the market knows something we didn't. Be we now know that there is quite a bit of something that you don't know.
Almost makes me sound like the infamous Donald Rumsfeld in one of his hilarious speeches....
As always, an excellent, clear and candid report.
Interesting to note that they already achieved their annual target of 70,000 oz PGM , or do I remember incorrectly?
Our bonuses are due soon. Rather happy about the drop.