Have you looked at whats happening in australia, everything goes down in those fires, the electricity network, the internet, everything. The electric cables are strung across massive distances on poles, therefore very vulnerable to fires. You need to put yourself in that situation where you need to get out fast. The only thing that does that is petroleumWith home charging, you wake up every day with a full "tank" of electricity.
I definitely see myself as investing, not gambling. I believe that sound investment principles will eventually win the day. Past returns on my portfolio support that contention, but I recognise that the portfolio’s concentrated nature means that I could get a good result, even over a long period, purely by chance.I don't mean to be harsh , but you put yourself out there posting in the newspaper the diary of a private investor and a people may follow thinking they are investing when in fact they are no better off that going to a roulette wheel .
I definitely see myself as investing, not gambling. I believe that sound investment principles will eventually win the day. Past returns on my portfolio support that contention, but I recognise that the portfolio’s concentrated nature means that I could get a good result, even over a long period, purely by chance.
I believe however that the main reason for the good returns is a preparedness to back my judgement to the hilt whenever I’m convinced that a share is seriously mispriced. For example, I increased my exposure to Phoenix Group Holdings around this time last year, despite it already accounting for more than 30% of my total portfolio. See the final paragraph of Diary Update 10 of 7 January 2019.
The return on Phoenix Group between then and year end was 48%, made up of 31% (price), 8% (dividend), 6% (currency). Earning 48% on more than 30% of the portfolio helped deliver a full-year return of 27% on the total portfolio – despite the disaster with Tesla.
I’m in trouble when I’m pitted against gamblers rather than investors. That has been my experience with Tesla over the last few months. I believe that Tesla is a gamble, pure and simple, that the price is crazy but that it will all come good in the end (from my perspective). I could be wrong. I’ve been wrong in the past. (See the diary updates on my disasters with WPP, Samsonite, AMP.) Unlike professional fund managers, I’m more than ready to admit to mistakes. They are great learning experiences. If Tesla proves to be another learning experience, the lesson I will take from it is to know when I’m in a casino and to make my exit with the least possible pain.
I don't know why you (and some others on this forum) have such an obsession with "matching the market returns". For me, investing is something completely different. It's being part-owner of a small number of businesses and staying with them for the long haul. I share the joy of their successes and the pain of their failures. If that's not investing, I don't know what is.I am happier with my return matching the market returns as a whole
Tesla just topped $500
I don't know why you (and some others on this forum) have such an obsession with "matching the market returns". For me, investing is something completely different. It's being part-owner of a small number of businesses and staying with them for the long haul. I share the joy of their successes and the pain of their failures. If that's not investing, I don't know what is.
I keep a weather eye on the published market values of the companies in which I've invested. If the market thinks they're worth more than the value I place on the businesses, I might sell down a portion of my holding. Similarly, if I think the market is valuing them at less than I think they're worth, I might add to my holding.
It so happens that, over the long-term, this approach has delivered superior returns but, as I've said many times on this forum, that's not the purpose. Personally, I think the good returns relative to the market are mainly because my approach keeps costs to a minimum, so all other things being equal (true if the market is efficient, which I think is your contention), I'm likely to do better than if I had put my money (I hesitate to use the word "invested") in a collective vehicle where there's a wide range of charges, some of them transparent, but lots hidden. Being familiar with the companies in which I've invested, having been with some of them for more than 10 years, also helps returns, because I have a good idea when they're being overvalued and when they're being undervalued by the market.
shorting is gambling pure and simple you have no clue what way Telsa will move short term and it's akin to going to the roulette table ,
Hi Fella
Gambling is doing something with an expected negative return.
Investing is doing something with an expected positive return.
Buying a portfolio of shares for the longer term is investing.
Playing roulette is gambling.
The vast majority of shorting is gambling.
But by shorting Tesla, Colm was not gambling. He started out with a positive EV. He was not doing it for the short term. Tesla was clearly overpriced. Unfortunately for Colm, it is even more overpriced now. The fact that an investment turns sour does not mean that it was not an investment.
His exposure is part of a balanced portfolio. Some of his investments will pay off. Some will go bad. But they are all investments.
The fact that a roulette player wins, does not mean that it was investing.
Brendan
It's not a big step from there to selling a stock I think is grossly overvalued, but which I don't already own. I agree that the dynamics are very different (the nature of those differences is a big learning experience for me at the moment), but the fundamentals are much the same. It reminds me of when I was in primary school. First we were told "2, take away 2 leaves zero. Zero, take away 2 can't be done". In a higher class we were told that you could actually take 2 away from zero, result minus 2.I keep a weather eye on the published market values of the companies in which I've invested. If the market thinks they're worth more than the value I place on the businesses, I might sell down a portion of my holding. Similarly, if I think the market is valuing them at less than I think they're worth, I might add to my holding.
First we were told "2, take away 2 leaves zero. Zero, take away 2 can't be done".
Fella
I presume you don't have any objections to what I wrote earlier today:
It's not a big step from there to selling a stock I think is grossly overvalued, but which I don't already own. I agree that the dynamics are very different (the nature of those differences is a big learning experience for me at the moment), but the fundamentals are much the same. It reminds me of when I was in primary school. First we were told "2, take away 2 leaves zero. Zero, take away 2 can't be done". In a higher class we were told that you could actually take 2 away from zero, result minus 2.
Hi Fella
Gambling is doing something with an expected negative return.
Investing is doing something with an expected positive return.
Buying a portfolio of shares for the longer term is investing.
Playing roulette is gambling.
The vast majority of shorting is gambling.
But by shorting Tesla, Colm was not gambling. He started out with a positive EV. He was not doing it for the short term. Tesla was clearly overpriced. Unfortunately for Colm, it is even more overpriced now. The fact that an investment turns sour does not mean that it was not an investment.
His exposure is part of a balanced portfolio. Some of his investments will pay off. Some will go bad. But they are all investments.
The fact that a roulette player wins, does not mean that it was investing.
Brendan
Can I just ask what is your supporting material for it being overpriced?
I hope you wouldn't short 20 shares
Come on Andrew, you're an intelligent guy.Brendan in a separate thread you stated that a well diversified equity portfolio has less risk than holding cash and over the long run it will return value. Yet here you are saying Tesla is going to decrease?
Hi Andrew
All the bulls are talking about the wonderful technology, but they never convert that into earnings forecasts.
The bears crunch the numbers. Or, in fact, it is the other way around. Anyone who crunches the numbers becomes a bear. At the end of the day, a company must be valued based on its profits and cash-flow. It's possible, maybe even likely, that Tesla will become consistently profitable at some stage in the future. But it will not justify a valuation in excess of Ford and General Motors combined.
Brendan
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