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Online Share Trading

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Ten bagger search

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knopkop
Contributor
This topic has had a good bashing around and some useful thoughts. Maybe louisg is on to something which could well be 'placed on the scale'.I wld value some comments on what could be a practical situation ie Village. Wld seem totally undervalued, one for bottom draw. And Ole' in 5,7,10 years you got yourself a tenbagger. Against that we think of something like Capitec or EOH. Both have already done extremely well. As a consequence now a major portion of your portfolio, but both still exciting prospects. However, while consolidating, and before their next growth phase you have capital tied up. So do you sell which in 5,7,10 years maybe a tenbagger and all that without all the worries of some of the unknowns already mentioned
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SimonPB
Valued Contributor
thorts .. typically a quick(ish) ten bagger is very risky when you buy, it has to be otherwise you wouldn't get ten bags .. risk = return ..
spotting them near impossible, I have had a few over the last 2 decades, but I never looked for them, rather a stock I bought ten bagged on me ..
an lastly, time frame, if it takes 10 years, well not so exciting .. my first sol purchase was around R34, so it's a ten bagger, but over 18 years and I have repeatedly bought over the last 18 years, so average not ten bagger
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SimonPB
Valued Contributor
this is not going to find you ten baggers
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Harathke
Regular Contributor
How about just buying what is a quality company at a cheap price and only selling once it becomes an expensive price, a bad company or both? Just a thought..
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SimonPB
Valued Contributor
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Rams
Super Contributor
like mechanical trading...mechanical investing...Benjamin Garaham used TIME(2 years) to exit....purely mechanical. But Buffet looked at PRICE and did not have an exit ...so compound cost and tax savings with the earnings...
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THRESHOLD
Super Contributor
Bet your whole portfolio on a Nigerian company... hmmm.
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THRESHOLD
Super Contributor
OK lets deal with this properly. Buy companies with a track record. With limited shares in issue; and a proven disinclination to issue more shares. Buy under-valued assets ie. book a chunk of the ten-bagger upfront. Buy companies where the directors/director-owners (pref) have a large (and vested) interest. Buy neglected companies. Seek out models which are not hugely capital hungry; which are easily scalable & repeatable (eg retail branches or bulk chemical producers or financial services companies.) Seek out companies that display limited overhead expansion to turnover growth (ie strong internal leverage) LOW LABOUR count to Rand of turnover generated IS very important. Find companies that supply commodities that are fairly resistant to recession and can easily be adjusted for inflation. Follow the clever money. BUY coompanies where the directors have shown a steady and long-standing tendency to accumulate their own stock. NEVER BE AFRAID OF ILLIQUID COMPANIES.
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kwagga
Super Contributor
This is a mouth full. You obviously don't want to leave any stone unturned in your search. Just one question - Have you found any pennies that actually adhere to all your requirements? It's an awfully long list you dotted down here.
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THRESHOLD
Super Contributor
Well - there's more - but that becomes subjective eg. spotting trends, predicting takeover targets and consolidation trends etc. No company has all of the above and some of the criteria are industry specific (eg. bulk commodities.) You need to choose a sector to operate in as well. In short - yes - I have had companies that have gone through the roof. There are also comapnies out there that I would buy because they strongly display certain attributes in spades. Some of attributes listed - I would treat as gospel eg. they need to take their own shares seriously - I have no interest in companies that arbitrarily spew out shares (gratuitous stock entitlements.)
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Rams
Super Contributor
so where do you see all this information,and do you have software to look at these variables. Do you have the TIME?
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THRESHOLD
Super Contributor
It's always about TIME. TIME is all I have to offer. We are mortal after all. I do this for a living; and I employ someone to assist.
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Rams
Super Contributor
do you visit the companies offices and premises...do you interview the manager or his secretary...
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THRESHOLD
Super Contributor
Yes and yes but depending on the scale of the investment.
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THRESHOLD
Super Contributor
BUT remember with microcaps (being what they are) - the owners often either deliberately downplay the company's prospects in order to shake out minorities or talk up the company to cover it's deficiencies. So interviews are often not worth a damn. Viewing the operation and the assets - on the other hand - that always makes sense.
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Rams
Super Contributor
but all this info can be gleaned from the company's financials? in other words from the PRICE...even with long term investments?
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THRESHOLD
Super Contributor
First of all - make up your mind - gleened form the financials OR from the price (of the share?) They are 2 different things. The price action tells you nothing with microcaps. They move too slowly and according to their own internal beat. The price is also easily and, often, extensively manipulated. The financials?? I told you the information I take from the financials. You cannot see an operation on the financials - nor the state of the assets. In fact - you would be surprised how much can be engineered out of the financials when the directors put their minds to it (4 years in auditing taught me this if nothing else.) So - in short - No! You are wrong.
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THRESHOLD
Super Contributor
At the end of the day, the level of assurance you require depends on the scale of the investment (and the portfolio-relative scale.) I try to take 05-1% of a microcap's share capital. Just a figure. BUT this means that when I get one right... So, I like to know that the assets on the balance sheet really do exist.
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THRESHOLD
Super Contributor
At the end of the day, the level of assurance you require depends on the scale of the investment (and the portfolio-relative scale.) I try to take 05-1% of a microcap's share capital. Just a figure. BUT this means that when I get one right... So, I like to know that the assets on the balance sheet actually do exist.
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Rams
Super Contributor
yes they are two different things(financials and price) thats why you need them both(P/E). And the price always tell the truth...facebook, did the investors look at the financials, and when price went done, were people in the least bit concerned about the financials?
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