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91
Thoughts and Ideas / Buffett's first TV interview.
« Last post by galumay on August 05, 2018, 08:45:23 AM »
92
Shares / CCP
« Last post by galumay on August 01, 2018, 08:03:20 PM »
click here to view older commentary

EOFY 2018 AR - CCP travelling very nicely,

17% increase in Net Profit

30% growth in ANZ consumer lending business NPAT;

Inaugural full year profit from the US debt buying operation;

Continued NPAT and collections growth from the ANZ debt buying operation.

My range of IV increased to $22-24

H1 19 - Great result, solid growth in all metrics.
93
Shares / AHZ
« Last post by galumay on August 01, 2018, 07:47:43 PM »
AHZ Amedeus is held both in our personal portfolio and the SMSF, its been a high conviction investment for me, I have continued to add to our positions as the lumpy path of the company continues, sadly the current CEO Wayne Paterson has just about destroyed the business with ridiculously high executive salaries and poor control of costs, poor capital management bordering on fraudulent and ridiculously ambitious forecasts for earnings and growth that have been completely missed.

The business in now in a postion where it will be lucky to survive to the end of the calendar year, if revenue growth manages to stay at its current rate (unlikely), revenue will be about $10m next quarter, operating cashflow predicted to be about -$12.5m so a further burn of at least $2.5m cash. I will be surprised if there is much more than $1-1.5m left. They do have recourse to $5m undrawn borrowings, but once they have to dip into the debt further while cash flow negative its just putting of bankruptcy. There is no hope of a capital raising, after the disastrous one ealier this year, which was possibly fraudulent and may well lead to a class action by shareholders, no one is going to put their hands in their pockets again.

The only hope for the business IMO is for the ridiculous executive salaries to be slashed, given the poor job to date they should be doing it for free until the business recovers, all other costs will have to be tightly controlled and just pray that revenue can continue to grow, preferably at better than 30%, and maybe, just maybe AHZ will be able to claw its way back to survive. Although a bad outcome for shareholders the other quite possible outcome is the business is sold to a more professional and larger bio tech business to bring the products to market.

7/8/18 thoughts for today, I have been reflecting on where I went wrong with $AHZ & @CEOPaterson. Looking back I should have sold out in June when the lack of management integrity became obvious, a hastily arranged CR rushed out just before failure of contract review & negotiations was announced. That should have been the red flag, anytime you become see evidence of management's values not being aligned with shareholder interests, sell! I let my emotional convictions about the product rule over the intellectually obvious.

For posterity here are my ealier notes from the older thread,

Share - AHZ

Rationale for buying - initial 2 positions pure speccy, small position size ($2k) reflects the fact they are not paying a divvy and may collapse if results arent as good as hoped. Huge upside if their products take off in europe.

EXIT STRATEGY -

Change in view of future prospects

if money can get a better return elsewhere with better growth              potential.


NOTE - Made my first stupid and rash decision, looking for opportunity after the market downturn in reaction to US lockdown I jumped in and put $10K into them, my thought was to look for a short term trade to try ROE’s strategy. This was poorly thoughtout, while the price had dropped, it was still higher than either of my earlier positions, i didnt calculate what price i would need to make a suitable profit, its crazy to use this strategy on a speccy, massive risk, too bigger a position. Must sell as soon as i can cover entry.

mentally i think i just was desperate and impatient to try a new thing - the trading idea ROE had explained for me, in the end i was so impatient i just jumped on the first possible way to apply it with no proper consideration. PATIENCE.

Lesson - main mistake was FOMO (fear of missing out)

TYPE - Spec

HY 2015 update - all good, moving towards being a profitable company, next result should tell the story, bought for SMSF

FY16 update On track for profit in 2018. awaiting vaccine trial results Q4

End 2016 update as above.

H1 2017 UPDATE - the good news keeps coming, revenues growing, losses shrinking, still on target for profit and hopefully take off!
94
General Discussion / Re: Decision Journal
« Last post by galumay on July 28, 2018, 03:37:03 PM »
once again considering any future investments, thoughts about buying another property again, if we bought a house in Wuyal and used all our offset plus a bit say $450k, then we rent to gov for $1000pw, pays off in under 10 years. If we had to move out of here, we cant move into IP because we wold lose tax benefit of offseting interest costs, if we lease to gov for 10 years we cant move into wuyal rd.
95
Shares / Re: Companies I didnt buy
« Last post by galumay on June 28, 2018, 04:30:44 PM »
Had a look at a few businesses that came to my attention this week, firstly PSQ, a dental provider roll up that announced a downwards revision on their earnings for the FY, price fell 11% to $1.56 which seemed a huge over reaction. My full analysis suggested though that it was still well outside my range of IV which was only around 50c.

3/19 $1.16 good call to give it a miss.

Second one is PME a medical imaging business, this is an amazing busienss with a moat and great management holding very tightly, announcement of new contracts pushed them up 12% to $8.00 today, but as good as they look thats miles past my IV of under $2!

3/19 $14.80 obviously missed out there, would have been a great buy at $8 in hindsight!

Third was ONT which i looked at as a competitior to PSQ, its also a good business and fills the criteria i look for in most of its metrics, but again its priced for perfection, trading at $6.40 with my range of IV around $5

3/19 $6.15 so looks like i was right again.

So 3 to watch in a market fall!
96
General Discussion / Re: Decision Journal
« Last post by galumay on June 24, 2018, 01:15:54 PM »
I was considering selling AAPL, they have hit $190 and we have made nearly 100% return on them. I considered some articles suggesting AAPL had an IV of around $150 and that got me thinking that they were starting to run a fair way ahead of fair value. On reflection I realised I havent actually run a valuation on APPL so it seems a bit rash just to use someone elses valuation.
97
Shares / Re: RISK
« Last post by galumay on June 20, 2018, 07:16:11 AM »
"Risk is the likelihood of permanent capital loss. Opportunity risk is the likelihood of missing out on potential gains. Put together you'll see that risk is the possibility of things not going the way you want. " Howard Marks
98
General Discussion / Re: Things People Say...
« Last post by galumay on June 20, 2018, 07:15:16 AM »
"Risk is the likelihood of permanent capital loss. Opportunity risk is the likelihood of missing out on potential gains. Put together you'll see that risk is the possibility of things not going the way you want. " Howard Marks
99
General Discussion / Re: Things People Say...
« Last post by galumay on June 13, 2018, 07:33:11 PM »
“Nothing in life is as important as you think it is while you are thinking about it.” Daniel Kahneman
100
General Discussion / Re: Decision Journal
« Last post by galumay on June 11, 2018, 04:42:15 PM »
Its time again to reinvest some dividends, we have about $5k in cash and first of all, it will go into adding to an existing position - in the past I was always keen to find a new position to put money into, I am now trying to consolidate and concentrate the portfolios so I try very hard to resist any temeptation to add new positions!

I think ADA is the most obvious home for some extra capital, it continues to be an undervalued compared to my range of IV, and I have high conviction that the business will grow. They have recently confirmed guidance for EBT to increase about 35% for the FY.

The competing homes for the capital were other businesses we hold that are apparently undervalued, such as SDI and SRV, but I have less conviction about their recovery and they are already larger postitions. The other idea would be to add to profitable postions where we saw potential for further growth despite solid gains, so KME, GCS, and SXE. It will be interesting to revist in the future and see which strategy would have been better, as smaller positions SXE and KME would have made the most sense, I probably would have opted for KME given it has had less SP growth to date.

Bought $5k ADA at $1.85
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