S & U Share Discussion Threads

[alfwilson] 17/9/2004 11:29

DiogenesJ

You have made my day ... you quoted one of those occasions when I got it right!

By the way I did not take your advice with VCP ... I had held them in the past and did not buy into CR's story at that time (although I usually follow his advice).

By the way your comment on Freddie ... "he has much to be humble about" ... reminded me of Churchill's view of Atlee ... although Atlee unlike Freddie was in practice a humble man.

Alf

[mad4it] 17/9/2004 11:10

DJ/Ian

Excellent stuff. Just the kind of debate I was hoping to stimulate.

Apologies, I can't debate at the moment, but I'll come back after hours with my thoughts on your posts.

But I'll leave Ian with this thought:

If I'd made my original post in December of 2002, where it was even more relevant, what would your reply have been then ?

[jeffian] 17/9/2004 10:59

Don't be silly, DJ; Fred never fails!

8-)

Regards, Ian

[diogenesj] 17/9/2004 10:45

Well done, Ian: but the thread suggests that Fred himself is long gone, and made very little, if anything, from his clevercloggery.

[jeffian] 17/9/2004 10:36

Well, just to remind ourselves what has actually happened since Fred started this thread on 25 April 2001, here's the graph:

As you can see, it's been a bit of a roller-coaster and I assume mad4IT's allusion is that, if we were all as smart as Fred tells us he was (with hindsight!), we'd have bought at the trough and sold at the peak several times over. Accepting that I would have made more money if I'd had achieved this Olympian feat, can I put up a defense of the Warren Buffet-style buy-it-and-hold-it investment strategy?

There is a clear distinction in my mind between 'investing' and 'trading'. Whilst those with significant sums to manage may do both, it is unlikely IMHO that they will be pure 'traders' seeking to ride every wave. It just isn't feasible, nor is the market sufficiently liquid, to allow all shareholders to bale out when they think the market is going down and jump back in again at the bottom. So, if you have a reasonably significant sum, your aim is to park it somewhere that achieves better returns than cash deposits, gilts or bonds and you are prepared to wear short-term fluctuations as long as the long-term trend is upward. In the case of SUS, I bought at around the time this thread started for 395p and it's 560 now; I reckon that's just over 12% per annum compound growth and its net-of-tax divi yield on my cost is over 7%, so let's say that my return on this investment is running at comfortably over 20% per annum. Now, if I was a cleverclogs like Fred, I'd have doubled my money on two occasions in the same period, but the chances are that I'd have got my timing wrong and done nothing like that. So I'm quite happy to be the Tortoise and achieve more modest aims while the Hares scurry around for their trading gains (and losses?)!

Regards, Ian

[diogenesj] 17/9/2004 10:23

VN: I just went through most of it, with the thread on one screen and the chart on the other, and it does make entertaining reading, mainly because there is very little garbage in it and most people honestly said what they thought. Alf Wilson did well: he held to the top of the last rise, correctly concluded that it wasn't going any further at that time, and sold. Most of us made mistakes: to name but two, in my farewell message to him, I recommended Victoria (which has since halved). And look at my post on 4 August:

"RSI suggests we are due for a bounce (don't know how meaningful that is with such an illiquid stock, though)."

It was the perfect re-entry point (price then 450p, now 560p, +25%) - but I failed to re-enter and missed the chance to make 5 years' income from this stock in 6 weeks.

Personally I rather hope that Mad4IT is right and that we are not too old or set in our ways to learn something from these mistakes! :-)

[mad4it] 17/9/2004 00:08

I've made loads of mistakes, HUMUNGOUS mistakes, I still make mistakes, (otherwise I'd be the greatest investor the world has ever known.)

But there are different kinds of mistakes.

Here are a few of my axioms to sum up the nature of mistakes:

1) Humility is good, it encourages the intelligent investor to learn from their mistakes. Those who don't learn from their mistakes are doomed to repeat them.

A) Mistakes are inevitable, repeating most of them is not.
B) But a minority of mistakes will always be repeated, it's the nature of the market. Accept it.
C) A good investor will learn the difference between A & B.

More of 'mad's market axioms' are available on request. ;)

[diogenesj] 16/9/2004 23:17

Ah, relief! You were talking about Freddy. Can't speak for him (who can?), but in my own case I do have a lot to be humble about, not all of which I would admit to in this public forum. :-)

[mad4it] 16/9/2004 22:46

Apologies, the multiple posts are the result of an AFN glitch, at the exact moment I posted, hence the same post number and odd timings for all of them.

[mad4it] 16/9/2004 22:44

LOL!

Your posts do make me smile, DJ ;)

...they also display two of the characteristics necessary, IMHO, to be a good investor: Humility combined with investing knowledge.

I describe it thus:

mad's market axiom, No 3: Have an opinion, but don't be opinionated.

Now, which one of those two essential characteristics does freddy lack ? ;)

[diogenesj] 16/9/2004 21:56

Hope you're not talking about me, M. That stuff is, er, valid only on the day on which it is written, and meant to be consigned subsequently to the oblivion it deserves. :-)

However, my investment practice is certainly flawed. Sold most of my SUS shares near the previous peak, sold the rest as the inexorable fall continued, and failed to buy back, as I meant to, when it turned round. I'm pretty good on the theory though: buy shares that go up, and if they don't go up, don't buy them.

When I said above that Freddy had made a sensible post, I did not mean that he was talking sense, merely that he was not spouting his usual half-crazed rubbish.

[mad4it] 16/9/2004 19:01

This thread should be compulsory reading for all investors. I've just read all 263 posts and it was fascinating to see the flawed investing theory and practice of many of it's participants.

Of course, there are plenty of threads that display flawed investment theory and practice, but they don't tend to have the quality of investor that this one does and they tend to be dog poo tech threads.

It really is worth reading every post from the start. I recommend it's read in conjunction with some SUS charts and TA.

Of course, I'm mostly talking about freddy, but not exclusively.

There is much to be learnt here about the pitfalls of investing and it amply demonstrates why I'd contentuously describe Warren Buffet as the worst thing that ever happened to the majority of current investors! No! really! The emperor has no clothes, IMHO.

I could write an essay about flawed investment theory and practice from this one thread alone. All the more fascinating because it's far less obvious than analysing the investment behaviour of the poor, deluded souls who inhabit the dog poo tech type threads I mentioned earlier.

( Freddy, you really could learn much about your flawed investing strategy by reading your own posts on here. I'm not just saying that to wind you up either....but, nevertheless, it is a pleasing by-product! ;)

[verynervy] 16/9/2004 17:31

I bought soon after the positive trading statement and it has motored ever since!!

[jeffian] 16/9/2004 14:57

Good interims out today. Anybody still into these?

RNS Number:9982C
S & U PLC
16 September 2004


S&U PLC

Providers of Consumer Credit and Motor Finance

INTERIM RESULTS FOR THE HALF YEAR TO 31st JULY 2004


HALF-YEAR PROFITS #4.9m (#4.2m) UP 16.8% ON BUSINESS
TRANSACTED UP 10% TO #45.6m (#41.5m)

EARNINGS PER SHARE 28.7p (24.5p) - INTERIM DIVIDEND 9.0p (8.0p)

HOME COLLECTED BUSINESS "PERFORMED WELL"

ADVANTAGE FINANCE OUTSTANDINGLY SUCCESSFUL
"TRADING AHEAD OF BUDGET"

THE BUSINESS AS A WHOLE "GROWTH PROSPECTS FOR
FUTURE YEARS"

Nice to see that MD Coombs Junior has inherited his Dad's combative prose style; have a look at this little snippet about the OFT call for tighter restraints on the 'Home Collected' credit business!

"However, it is regrettable that this legitimate Government agenda could be in
some danger of hijack by a small number of activists, purporting to represent
consumer interests, but who are as ideologically antipathetic to the industry as they are apparently ignorant of the wishes of the customers we have served for over 50 years."

Grrrrrrrrrr! Go for it, boy!
8-)
Regards, Ian

[verynervy] 23/8/2004 13:07

Another share tipped over the weekend due to its very lowly rating and value!!

[diogenesj] 04/8/2004 16:05

Credit where credit is due: a sensible post from Freddy. I will therefore refrain from calling him a toad on this occasion.

[ydderf] 04/8/2004 15:40

you pay a high price for illiquidity at present, how can the shares be worth the market price when the market size is only 1-2.5k, what price would you get if you were a forced seller of, say 25,000 or even 50,000? That's why they still ain't cheap enough yet - the risk discount is too small

[diogenesj] 04/8/2004 13:21

RSI suggests we are due for a bounce (don't know how meaningful that is with such an illiquid stock, though).