You can ignore authors, whether they are producing too much noise or being needlessly provocative, by clicking the yellow unhappy when reading their post.
- Manlobbi
Halls of Shrewd'm / US Policy❤
No. of Recommendations: 12
Mood music'unoriginal thinking aloud.
Looking like Berkshire will find large acquisitions easier to make, as this higher rate environment pushes the tide out.
Opportunities are already starting to emerge and the pendulum may have only just begun to swing towards the fear setting.
Take Legal & General in the U.K. GBP £12.6 billion market cap; 6.5 PE; dividend yield 9.27%. I had a look at their annual report. Beyond my ability to understand but Berkshire would easily understand it. No idea if it's a good buy. Just providing an example, of the things around the world, that Berkshire will be watching closely.
Another business, Lego, would be a great buy for Berkshire. The FT did a fantastic article on it last week. Family owned. Maybe some day it will need a home. Who knows. Berkshire would be the perfect place. Adding to its toy segment! We live in hope.
Anyway, one of the positives of the current dampening of animal spirits: Berkshire may get a lot bigger, sooner. Interesting times may be upon on soon. We will see. The sell offs in the last few years have been either short lived, or mild. I'm not wishing for it, but Berkshire is built for moments of real fear. It's been a long time since people got really scared and did indiscriminate selling.
Note to self. As Buffett has said in the past: you won't like when we allocate the excess capital. Stay strong.
Let me know your thoughts on Legal & General and Lego.
No. of Recommendations: 23
I don't have any specific comments about Legal & General, or Lego.
But if you want a UK investing idea, look at the Financial Times tongue-in-cheek "XFT" index.
They take the FTSE firms, and find the 9 which have been mentioned least in the prior five years.
Currently they are
Sage
Spirax-Sarco
Croda
Halma
Rentokil Initial
Experian
Relx
Compass
Bunzl
This idea was first proposed in 2017.
https://www.ft.com/content/413f60b4-1b89-11e7-a266..."Lex has hypothesised that it would be better to invest in companies the very mention of which can leave news editors dozing peacefully in their swivel chairs. We therefore split the current constituents of the FTSE 100 index into two groups: those mentioned least and most in the Financial Times over five years. Bingo! The XFT Index, as we call it, outperformed the Newsworthy 50 by 33 per cent...
there is a cohort of XFT companies whose steady growth, scaleable business models and low profiles should still repay study. Providing you can stay awake long enough to read their numbers."A brief follow up in June 2019
https://www.ft.com/content/fef086f4-8c45-11e9-a24d..."Health and safety procedures can bore the most diligent employee, however useful they may be. Halma, maker of health and safety instruments, has a similarly tricky time drawing attention to itself.
Halma is one of the latest additions to the group of lesser-known FTSE stocks that offer superior returns while putting financial journalists and analysts to sleep. The XFT Index, as Lex calls this contra-indicator of financial newsmakers, has outperformed the broader index by 22 per cent over the past three years, including dividend returns. "And another this August
https://www.ft.com/content/addffd2a-fef8-46f3-bec4..."Since 2017, Lex has been keeping an eye on nine of the largest and least newsworthy UK-listed companies. These are the top constituents of what we dubbed the 'XFT index' of business rarely featured in the media. They have beaten returns on the FTSE 350 by almost 40 per cent over five years.
The companies have common traits. They are stable, defensive long-term compounders that operate on a global stage. They avoid profit warnings, megadeals or boardroom bust-ups. One such is FTSE 100 distributor Bunzl, which lifted its earnings guidance on Tuesday, extending 30 consecutive years of annual dividend growth."It was mentioned in today's Lex column, speculating that the recent M&A activity at Rentokil might bump them out of the snore-fest list.
The obvious question raised is whether the same might work within other markets, for example the S&P 500 or 1500.
Jim
No. of Recommendations: 2
Problem is, if it catches on, everyone will start mentioning those that haven't been mentioned much
No. of Recommendations: 0
"Lex has hypothesised that it would be better to invest in companies the very mention of which can leave news editors dozing peacefully in their swivel chairs."
Jim, a similar thought popped into my mind recently - could there be an advantage investing in stocks of larger companies that, for whatever reason, have no/little analyst coverage.
The thought being, those less under the microscope and less widely tracked/studied may be largely ignored and could represent some hidden gems.
It's been many years, but I feel like I vaguely recall either ValueLine or SIPRO fields that track number of analysts covering.
Has anyone done backtesting on stocks having zero analyst coverage as the universe?
No. of Recommendations: 1
"I don't have any specific comments about Legal & General, or Lego.
But if you want a UK investing idea, look at the Financial Times tongue-in-cheek "XFT" index.
They take the FTSE firms, and find the 9 which have been mentioned least in the prior five years.
Currently they are
Sage
Spirax-Sarco
Croda
Halma
Rentokil Initial
Experian
Relx
Compass
Bunzl"
This is interesting because several of these are holdings in Nick Train's funds and/or are recommendations of services like the Motley Fool. I would never have pegged these as being the least mentioned over the last 5 years.
No. of Recommendations: 0
"Jim, a similar thought popped into my mind recently - could there be an advantage investing in stocks of larger companies that, for whatever reason, have no/little analyst coverage.
The thought being, those less under the microscope and less widely tracked/studied may be largely ignored and could represent some hidden gems.
It's been many years, but I feel like I vaguely recall either ValueLine or SIPRO fields that track number of analysts covering.
Has anyone done backtesting on stocks having zero analyst coverage as the universe?"
I get the free emails from Eddy Elfenbein of CWS (Crossing Wall Street) who often mentions the performances of successful companies with little to no analyst following in the states.
No. of Recommendations: 1
Sage is a business I have long admired but never bought, due to valuation. Was just looking over their annual report, following your mention. I have always wondered about their presence outside of the U.K. seems they are very much a global player. I know they dominate small and medium business in U.K. and there is incredible customer trust that the products work. I need to understand their competitive positions in other major markets. I assume they have a lot of strong competition in the US for example.
Great business with still so much opportunity to digitise and automate SMEs. Particularly now with AI, which will really reduce the need for bookkeeping hours. Big network effects is another competitive advantage.
Maybe I will look at it more closely and who knows the price could come down if markets wobble'
