Same old on here, price drops and all and sundry come out quacking, price goes up they all disappear, pinch of salt material.
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The problem with getting too big a position in something is its very easy to lose the ability to think objectively and start selective hearing. Its a well known thing. https://www.healthline.com/health/selective-hearing
Similar can be said about investments in Xero, FPH, All Ports of NZ, AIA, Mainfreight and the list goes on. All overvalued in my eye and many other I spoke with at AGMs for different companies in 2019. Still their share price went up and I missed out. I just feel this is cyclical and we will see a price hike in about November/December after we get an update, unless the update is terrible due to COVID, otherwise I see this share keep performing and heading to new heights.
You may have missed the point I was trying to make so let me illustrate.
Others are probably much better than me at this but I know for myself when I go over a 10% portfolio position in any one stock I find it increasingly hard to truly stay objective and I start to subconsciously filter out any negativity, (selective hearing...although I usually keep at least one ear and eye wide open to friends and contacts on here I respect for any balancing viewpoints), and only look for positive reinforcement. I know my limitations and work within them so don't generally go over a 10% position in any one stock. For me I think this makes good common sense and is also consistent with sound portfolio diversification and risk management principles.
Others might feel capable of staying truly objective in their thinking at above that level and even above 50% in one stock but I have my doubts about that.
" Xero, FPH, All Ports of NZ, AIA, Mainfreight "
just shows you that if the market thinks they are good companies they will be in demand.
At some stage i bought all of these at great prices and found reasons, good reasons to sell. After not losing any money and sometimes making.good...more good was to come.
Dont sell good assets until the storm comes over horizon ... a hard lesson to learn...
A high P/E is no reason to sell.
I get what you are saying Beagle......however your 10% strategy is more a strategy to get average returns than a strategy to get exceptional returns.
Say you held 10% of your portfolio in ATM back in 2012..... all good so far, but then ATM grew so fast that in subsequent years it rapidly became 70% of your portfolio (as it did in my case.)
If you had continually adjusted your portfolio each year to your 10% level I would argue that you will have foregone very serious money and exceptional returns in one of the best performing companies in the history of NZX..
Much better to let your successes run... and run..... than to blindly stick to an averaging rule that is inflexible (even if it is well intentioned.)
Lastly, objectivity is a skill that has nothing to do with diversification. To paraphrase the great Warren Buffett, "Diversification is overrated. Much better to keep all your eggs in fewer baskets, but watch those baskets carefully."
Objectivity is what keeps me invested in ATM despite a few market hiccups along the way.
Well of course I couldn't agree with your post more, diworsification has always cost me when I've gone down that track, very much horses for courses though.I think objectivity is enhanced when you stay staunch during tough times like the current period, I'm well used to being deeply in the red with this stock at various times since holding yet no other stock has given me the returns this one has. The worst thing anyone can do is get talked out of their holding by naysayers, both well meaning and the not so well meaning.
I totally agree. I feel A2 has currently become a shorter and trader stock https://www.shortman.com.au/stock?q=a2m and I feel in the longterm will continue to outperform expectation. The old P/E expectation may not be so relevant if interest rate term deposits are hitting near zero in the coming months/years.
PS well said left field you explained it how I was trying to explain it as A2 went from 8 percent of my portfolio to over 20 percent
Fair enough Gents and a good robust debate. At the end of the day everyone has to find their own pathway that works for them.
I posted today as a way of contributing and asking has the fast growth story run its course ? I think it is a question well worth putting out there because clearly the analysts are projecting out much slower growth rates going forward than what ATM has enjoyed in the past and ATM shareholders are shortly to again lose the wonderful and incredibly valuable expertise of Geoff Babbage. How the new guy will go is clearly a risk, just as it was when Herdlicka came on board.
For what its worth, my story is I have also done very well out of ATM..I rode it up for a few years and sold out most of my holding in March 2018 at just under $13. Before this I trimmed some along the way and I am sure others made a lot more from ATM than I did and good for them.
Since late March 2018 by my calculations ATM has increased in price by 39.5%.
In very late March 2018 the NZX All Gross Index was 9060 and is now 12,820 so is up 41.5% over that same timeframe.
I think ATM's slight underperformance of the NZX all gross index over that timeframe adds some validity to the merit of my question today pondering whether the good times have ended and I guess the question I am posing is really one that asks whether ATM is now a mature company with much more modest growth rates going forward ? Will we get market outperformance going ahead after slightly underperforming the market since March 2018 ? That's the $64,000 question, (so too speak), or for some people, quite considerably more ;)