12 thoughts on “Stock Idea Series”

1. If you do decide to write them out, I’d be interested to read your thought process on these.

2. Loyal readers have read your industry rotation models and have also gone through your screening methods in the context of your ranking methodology and eight rules of investing. Since you are in the process of re-balancing, it would be interesting to tie that process to the individual stock analysis process, rather than using a random process to select a company to analyze. The re-balancing process would add the opportunity to compare analyzed companies. Regardless of the selection process you use, I will be interested in your approach to company analysis. Of particular interest would be candidates in the P & C or reinsurance industries (given your interests and background).

3. Loyal reader here. I would love to see your analysis of a company and stock made available on the blog. I believe having a sample of quality research from someone with experience would be quite valuable to the novice and expert alike.

4. Hi David, I love the idea but don’t have any specific tickers to suggest

   Assuming your goal is to educate us into being wiser investors, I’d suggest you use companies that have many peers (in other words, do one P&C that’s similar in structure to 40 other P&Cs), even if these particular companies are below the radar.

   A theme that could work would be How to Identify a good (or bad) Bank/P&C/retailer/etc, with analysis of one good and one bad example.

   Analysis of companies with completely unusual industries or structures won’t be nearly as applicable, though they’d certainly be interesting on occasion.

5. I would like to see, in some detail, how you approach a company you know nothing about. I do this all the time, and find it quite time-consuming. If a first pass on the annual report passes the smell test, I start on serious analysis by skimming the last 10 annual reports to understand merger/acquisition/disposition history, earnings, changes in strategy, state of pension plan, etc. I don’t care whether you select randomly or via your usual screen, but I would like to know what you do when starting from nothing.

6. Sounds like a good idea to me. But I find most everything you write interesting.

   Ms&Ad Insurance Group Holding could also be worth investigating. Stock price has dropped significantly recently.

7. David,
   I enjoy reading and learning from people who are experts in what they do so for you I think that is insurance – which is ripe for more understanding by me and many I’m sure. Also, if this process helps you show us how you learn then that can also be helpful because you seem to approach many situations with a desire to learn. I’d like to do that, too.

8. I’d love to see what you write about Canadaigua, as I’ve worked in the industry for 20 years (small, closely held northeastern thrifts). I don’t know this institution, but if it’s not unlike about 4000 other closely-held small banks, you should be able to get your arms around the financials fairly easily. Finding shares to buy at a reasonable price is another matter, however!

9. David,

   I would be very interested to see your analysis. Coming from one of the “silent” individuals on the blog, I hope this motivates you to do the analysis.

   Thank you for all the work you freely share. I really enjoy your blog.

   IMC

10. I also see the value in this by seeing your eval process in action. I am an applied mathematician and I understand the value of a random sample and I sometimes use random samples. From an educational view, getting to watch you work with these is very valuable. You have a market cap filter. In my case I add other filters (P/E, PEG, P/S, earnings growth, div %…) to my random selection process. I have found that filters are a good way to cut back on the junk. Since this is an education process, I want to see your selection process.

11. I’d love to read this series. Despite applying filters (as cold.as.ice mentions also), I find myself gravitating towards the larger companies that I’ve heard of and already know something about.

    My violin teacher once said to me, “You _can’t_ have your own style until you learn to copy someone else’s.”

12. David,

    Longtime reader of the blog (one of the best around in my view). Thanks for all your efforts, they are appreciated!

    I think this is a fantastic idea.

    Not sure whether you only invest in/consider US-listed stocks, but if not I would like to submit two for your consideration:

    1) Lancashire Holdings (LRE)
    2) SOCO International (SIA).

    LRE is a Bermuda-based P&C insurer, which I think you could probably analyse without too much difficulty ;-)…SIA on the other hand is an oil & gas explorer & producer. This isn’t an industry that I’ve seen you comment on but it has some similarity to insurance in that “normal” valuation metrics are usually inappropriate. If you just looked at earnings or cash flows in a given year – or often even over a period of many years – you would often end up with a misleading result. The value is in the assets, and often they can take quite some decoding (in fact they tend not to even be on the balance sheet in any meaningful way). I would be very interested in how you went about deconstructing and valuing the assets of such a company, which are after all subject to many a risk/uncertainty/assumption.

    Regards,
    Phil

Comments are closed.