The Intelligent Investor was Benjie Graham.
Peter Lynch is the Mad Butcher of Wall Street.
Best Wishes
Paper Tiger
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FPH down 2% today on ASX today
Hmmm
Good post mate. I struggle to see value even after the recent correction. PE of 30 given their long term track record of growth which is hardly stellar and foreseeable challenges ahead good value ?
Interesting that RYM arguably the preeminent blue chip growth story of the entire market trades at about a 5 PE discount (around 25 times underlying FY17 projected earnings).
Interesting oscillation between MA100 (upper boundary) and MA30 (lower boundary). Wondering how this is going to end - break out upwards or the gap between the MA's opening again??
Using the 100 day EMA and the 200 day EMA,I would say the chart does not look good,with the sp below both.!.
Share price $8.92
100 day EMA $8.96
200 day EMA $9.10.
courtesy of 4traders
Estimates in M NZD Fiscal Period March 2014 2015 2016 2017 2018 2019 Sales 623 672 815 902 1 022 1 148 Operating income(EBITDA) 173 202 246 277 325 377 Operating profit (EBIT) 143 170 211 239 282 328 Pre-Tax Profit (EBT) 137 159 201 236 278 319 Net income 97,1 113 143 168 198 230 P/E ratio - - - 30,6 25,9 22,3 EPS (cts NZD ) 17,4 19,9 25,0 29,5 34,7 40,4 Dividend per Share(cts NZD ) 12,4 13,8 16,7 19,8 24,2 29,2 Yield - - - 2,20% 2,69% 3,24% Reference price (cts NZD ) 900 900 900 Announcement Date 05/23/2014
10:49am05/29/2015
12:30am05/27/2016
12:10pm- - -
Thanks JT.
We can see the market is prepared to pay a PE of 30.6 for eps growth of 18%, ie eps rising from 25cents ps to 29.5cents ps.
We can then see the then projected eps growth is between 16% pa and 17.6% pa.
The market is more generous than me.
I also note the market is prepared to pay a forward PE of over 40 for POT.Interesting?
I remain content buying shares where the PE is lower than the growth rate.It really works.!!
Hello share traders! New to the forum, and a modest holder of FPH. Not a particular good day for FPH dropping from day high of 920, and closed at 897.
Hi 44wishlists ... welcome to the forum. How would you like us to abbreviate your name - 44?
You are right re FPH SP drop today, though - it is since October 2016 below the MA200 - i.e. it is technically in an unbroken downtrend and behaves accordingly.
Personally I think the SP will continue to be volatile as long as the big disruptor (Trump - controlling FPH's largest target market) hangs around. As well - while it is a good company, it still does not look cheap (using the Grahams formula to assess) ... and the market might use the current uncertainty to move overpriced stock prices towards some more sensible pricing.
DYOR and - no, not holding myself. Might move in if & when it looks cheap.
Thanks for the warm welcome BP! 44 sounds like a good title!
Absolutely, with its current SP, it maybe more appealing for investors who can tolerance higher risk.
$8.97 is a good long term investment, but it's too high to be trading super short term with, with a Trump tax potentially around the corner. A good bet if you have spare cash and are happy to put it in the bottom drawer if it goes south.
If Trump (AKA Quick Draw McGraw the shoot-from-the-hip make policies now, ask questions later cowboy president of the USA) opens his face hole and noise about import tax starts coming out before the results are published from FPH, then it'd have been a bad investment. However, I think the price could go up after the next FPH announcement, especially if some time passes after that and still no tax talk from Quick Draw.
Personally, I haven't concreted my plans on my personal house situation, so I don't have cash to gamble on this stuff. If I did, I'd take a parcel at that price.
I figure these are tracking upwards a bit as it seems people feel like Trump's ability to action tax change could be just hot AIR.
I listened to Mr Trump's first speech to Congress today. Although it was a claim speech, I decided to walked away with some profits from my current FPH holding, and stand on the sideline to monitor its movement.
Pretty strong breakout on big vol.Am liking the look of this.
Milford's portfolio manager, Mark Warminger has been convicted of violating securities law for trades in FPH on 27 May 2014.
As an investor in both FPH and a Milford KiwiSaver fund at the time I am horrified at the facts of the case.
Well done to the FMA and shame on Milford who I trusted to upheld higher ethics than this. Instead they have continually downplayed this issue and refused to state that this behavior is unacceptable or even fire the guy (he was placed on leave) despite paying a large settlement to the FMA.Quote:
Having told a broker on the day in question he was a seller at $4.35 a share, he then entered the market to buy small volumes at prices from $4.32 to $4.34.
“His subsequent DMA purchases resulted in an average profit per share of a modest fraction of one cent on the volume purchased for a total profit of $656. He would have lost money on the last purchase of 5,000 shares at $4.34 after brokerage was taken into account. By contrast, if his DMA activity led to the increased sale price of $4.35 it improved his crossing price by 3c resulting in a benefit of around $16,350.”
Read more: https://www.nbr.co.nz/article/warmin...inds-th-198012
I expect the fund managers of my super fund to spend their time researching shares and industries not monkeying about with share prices to artificially inflate a fund's price for a very short period of time for their own selfish gain. This has real costs for the fund's long term investors in trading fees and potentially increased performance fees. It also damages individual investors trust in the NZ markets which hurts everyone.
NBR and an older Stuff article, report on his motivation, Milford's profit target and Warminger's own bonus were at risk:
Quote:
It was clear from Milford’s employment records that Mr Warminger’s funds were underperforming their benchmark, said the judge.
“He undoubtedly would have felt pressure as a consequence.”
Read more: https://www.nbr.co.nz/article/warmin...inds-th-198012
Quote:
Furthermore, performance measures at the company were reviewed every six months, and Warminger's remuneration included a share of the company's total profit for the year.
"There will be evidence the bonus for Mr Warminger was very, very substantial indeed, by comparison to his base salary," Smith said.
http://www.stuff.co.nz/business/8464...-pressure--fma
JAA's post should be cross-posted to ATM as well. Surely will be some very upset shareholders who were caught up in Mr Manipulations shenanigans!
Could be more buy opportunities ahead as Trump focuses back on the tax again. Interesting his approach has changed. He's now ordering an investigation instead of making policy first.
A buy from The Bull.
"Reporting in May, Fisher & Paykel’s competitive advantage lies in the respiratory and acute care market where it enjoys a dominant market share. Its obstructive sleep apnoea device business has strong growth prospects, but FPH is a smaller player in this highly competitive market dominated by the likes of ResMed. Recurring revenue from high margin consumables accounts for 84 per cent of group revenue, which is a highly attractive aspect of this business."
... and here we go: Golden Cross time! Given that markets see Trump more and more as a dog who barks a lot but has no teeth to bite (obviously - I am talking here about his ability to get anything trade or tax related through the house, not about his nuclear stick - but this is another thread) ... might it be a good time to reinvest.
I bought some parcel when FPH came back across the MA100 - and so far it looks like the indicators stay friendly ;)
Trump has now slapped a 20% tariff on Canadian lumber, accusing the Canadian government of providing tax-payer subsidies to lumber producers, which make the prices it sells for "unfair to the USA."
Dairy appears to be next on the hit list.
I wonder how long it will be until he decides upon tariffs on Mexican produced goods. This issue could be exacerbated by the $163M WTO ruling in favour of Mexico on their dispute with exports of Tuna into the USA.
back to 10, yeah... is it something to do with Resmed's result? hope it can stay...
Canny indeed. S/P now $10.51 on increasing vol (getting toppy?), not far from an all time high($10.79) Why?
Not sure
Fall in $NZ ,Average of 1% higher than F&P assumed
Larger Flu season in USA
Improving political funding environs in USA (but still risks)
Rolling out new masks and flow generators etc
USA final litigation determination in USA jan 2018
Worst case scenario a ban on 2 masks which make up 10-15% rev in USA
4Traders av t/p $10.31
A broker where i got some of this info T/P $10.18 with meaningful tail risks remain
Resmed saw great amounts of growth in the market they share with FPH - many are expecting organic growth to bolster some good results for FPH as it did for RMD [ Resmed market share remained the same ]
With the FY results in sight, I would say there are some mighty high expectations.
Yes RMD PE 29( i hold too) very similar chart and near a high. Prob tracking the S&P Healthcare 500 index like FPH PE 37 (ASB site) (PE 34 brokers est ).
Was that you BP selling out today?. :scared:
What do you mean - hardly any depth so far?
But no, don't see any reason to sell FPH at the moment. Do you?
Well its getting fairly pricey don't you think?Im mean more than norm.
Meanwhile a new mask released for babies down to 500 gm in weight!
FPH Releases New Infant Cannula
Pricey? Yes. More than norm? Not so sure. If you compare them with the likes of SUM and MET, than yes, they look fundamentally quite pricey. On the other hand ... SUM and MET are cyclical, FPH is not. If you compare them with quasi-bonds like AIA, than they look given their growth still quite reasonable priced.
I guess FPH is one of these companies which always looked dear ... and I am still annoyed that I didn't buy them at $4 (not that long ago), because i felt they are a great company, but just a bit too dear.
I think they have the potential to just keep growing for many years to come (just look for how long they are already above the MA 100) - and might sell in another 3 years for $20. Who knows? Don't think that normal market cycles are likely to effect them too much, the recent dip is in my view just a combination of the IP litigation (and their still might be some residual risk) and the Trump factor.
Obviously - nobody knows whats around the next corner, but at this stage I see them as long term holding in my portfolio. Great company worth its premium.
I almost typed up a very similar reply earlier ... but I actually managed to get the bulk of my FPH at around the $4 mark :) I too will be holding and won't consider selling until $15-$20 ...
The growth: A new manufacturing facility in Mexico, earthworks started on a new building in Auckland, a huge untapped market ... I think the future is definitely bright despite some on-going "headwinds" ...
Cheers guys. Ive been holding since $3.02 and sold a few too. RMD bought @ $6.65 average. Always priced for perfection and as long as they continue with the growth expected of them both will do well , There are a few opportunities to trade them too.The brokers consensus pricing below current s/p is int. Watching more these days rather than taking them for granted.And simply and sadly as the % of overweight people increase the more masks ,flow generators , consumables etc are sold.
Hahaa a vicious /virtuous circle, Monopoly Consumption Game . Add MEB to assess any depression, AIR to fly them there,OCA to look after them SEQ to manage their wealth,HBL to bank it, TNR to buy them a car, and ZEL to fuel it and AWF to find that job.
BP are you topping up or is this your first entry or are you just in for a trade based on the charting?
....Boom....
Withdrawal of US ITC Complaint Against FPH Great; was watching the chart as FPH was going steadily down as RMD was going up. Reversal today welcome.
asx open should fuel the sp raising further...
One big take away from the announcement today... ResMed are *STILL* w4nkers
ResMed also indicated in today’s filing that it intends to file an additional ITC complaint.
The withdrawal of the complaint with the US ITC does not impact the patent litigation proceedings involving Fisher & Paykel Healthcare and ResMed in the US District Court, Germany, the UK and New Zealand.
ResMed obviously believe they still have legitimate grounds to challenge FPH, given the patent litigation is still proceeding. That's still a valid concern for shareholders.
Anyone on here good at understanding Patent law? Would Res Med's withdrawal of this suit mean that they could not refile using the same evidence or brief? Is FPH out of the woods yet?
[QUOTE=RupertBear;666458]Been a bit of a roller coaster ride today! Up then down then up again....;)
Sure was ,bounced as high as $10.49 finished @ $10.18. I didn't have enough conviction (or nimbleness) but was thinking it may have been good to sell into this as i have a sneaky feeling that the downwards direction may resume, i don't know why and hope I'm wrong.
FPH is not out of the woods, the litigation could be endless...
FPH never should have swung at the big boys, RMD could play this game for years to come... I am far from an expert on patent law, however patent trolling is as easy as A.B.C in the U.S.A
FPH is a solid business with a bright future ahead... use the short term uncertainty to your advantage.
Is that what you are doing hardt; topping up.
Sorry, missed that (happens when you are holidaying on a tropical island ... just too many distractions through heat, beer, swimming pool and good food;);
FPH was for ages on my watchlist. Always looked like a good company but always too dear. I first bought in when the SP flirted with the MA200 - but set a stop which got me out again with a minor loss. Bought back when the uptrend started again (passing the MA100). I do see them as long term hold (well, this is the intention), but this does not mean that I will ignore the SP movements and the economic and political environment.
Might buy some more if it moves below $10 (but stays above or around MA100).
Sounds like a tonic :cool:BP, thanks. Meanwhile yes you're right hardt re RMD playing the game(because there you can).
Yes, I went for years thinking that about FPH but took the plunge during a couple of their down spells last year - and now well in the black. One of NZ's few genuine growth companies IMO and worth adding to when opportunities arise.Quote:
Always looked like a good company but always too dear.
:)
Solid result - NPAT increased by 18%.
https://www.nzx.com/companies/FPH/announcements/301467
I hold.
margin is very good... just the the lawyers are very costly..
Interesting reading the bit about the patent claims and counter claims. Does seem to me that ResMed are trying it on and not really getting anywhere.
Yes - steady as she goes. Good improvement, though annual revenue grew slightly less than analyst predictions. Earnings growth as expected, but just imagine they could have booked the $20 m they spent on lawyers as profit as well - this would have been a rocket!
Positive outlook, though somewhat reduced compared to analyst predictions. Allowance for this years lawyers bills?
Increasing dividend, bringing the annual dividend up to 19.25 cents. Well, this is obviously not a dividend stock (with less than 2% dividend return), but still nice.
Discl: hold and hope for less litigious times to come ...
Macquaries liked the result.
http://www.nzherald.co.nz/business/n...ectid=11861446
Looks like an all time high(my chart only goes 10 years) on big vol; and the $NZ been trending up too!.RMD not quite there but close.
Well, yes - the trajectory looks quite steep. If you look at it from a short term / trading perspective - you might not be the only one thinking about locking in some gains. If you look at it however from an investment perspective ... long term I think they are only at the start of an exciting growth phase.
However - 40% of your portfolio is a lot (not everybody is a couta ;), certainly more than I would feel comfortable with holding in just one stock; Couldn't blame you to use the current run to take some money of the table.
Discl: holding (and looking for an opportunity to buy some more);
Hmm yes I sold a few recently to lock in some profits and it has just kept going up and up :mellow:. Apart from owning Wynyard my biggest portfolio mistake has been reducing my FPH holdings thinking I will buy in later at a lower price but it rarely goes down far. I am now a long term holder until a black swan swims past. Good luck with your decision :)
Ditto a while back ,regretfully now. A $6 bill mkt cap truly Global company in many international Funds and Index's portfolios. P E in the 40's. I don't know how to "value" it myself, re if its overvalued run to hard etc.
Actually - if you put their long term growth (around 10%) and their projected earnings (37 cts) into the Graham formula, than a number roughly 7.5% below the current market value pops out. But hey, this was the same situation when I first considered buying them (3 years ago or around $4 per share). At that stage I didn't buy because they looked too dear to me - and this turned out to be a quite expensive "not buying decision" ;).
They are clearly not cheap if you look at the fundamentals, but it might take a long time until they are "cheap", and if this really happens, we might not want them anymore.
In my view is the current price just reflecting the premium you have to pay for a top quality company with consistent growth and (in practical terms) unlimited growth potential ... however, this does not mean that the SP could not retract if the IP dispute turns sour or if Trump does again something particularly stupid ... it happened before.
I remember not buying when it was $3.60 and wishing I had.. only to repeat again at $4 and $4.50.. and so on and so forth. I think I finally gave up looking backwards and got on around $8. Waiting for a good dip doesn't seem to happen very often with FPH.
It never hurts to lighten up when you find yourself overweight. I was in that situation with FPH in Oct 2013 so sold 30% which helped me to sleep better at night. For a while anyway. That was at $3.50. I still have the others, have been overweight again for a long time, but they are locked away in the safe and I've thrown away the key.
I looked at these and calculated that based on the expectations, it would take a number of years before they returned dividends in line with what I wanted. I then worked out that I'd be better buying other stock, however I did buy in; upon factoring in that they will always be a premium, they are worth owning.
Therefore, I believe that as they approach a significant market segment, and the possibility for growth decreases, the premium will decrease and as the yield grows, there will be less value in holding for a long term holder. This, to me means that eventually you have to profit take with a stock like this. This, of course is many, many, many years away.
I'll be buying on the dips and holding long term, after advice from the secretary that risks are mitigated. I won't be buying willy-nilly just to get in - that's the way to have your money do nothing for a year.
Hammer formation today. Could be an indicator for the SP bouncing back at the MA 30.
FISHER & PAYKEL HEALTHCARE FY13A FY14A FY15A FY16A FY17A FY18F FY19F FY20F OPERATING REVENUES GENERATED - NZDm 507.3 568.6 644.0 818.5 869.5 1010.0 1175.0 1300.0 Cost of goods sold as a proportion of product trading revenues 58.00% 54.90% 50.70% 44.90% 44.90% 46.00% 46.00% 46.00% Corporate costs as a percentage of trading revenues 24.70% 24.90% 23.18% 25.30% 24.10% 25.00% 25.00% 25.00% OPERATING EBITDA GENERATED - NZDm 87.7 114.8 168.4 244.3 269.9 315.0 370.0 430.0 ADJUSTED NPAT 24.3 37.6 82.0 143.4 160.1 195.0 240.0 275.0 ADJUSTED EARNINGS PER SHARE 4.28cps 6.62cps 14.45cps 25.27cps 28.22cps 34.37cps 42.29cps 48.46cps
Moderate forecast in my opinion and if the market continues with its appreciation towards FPH I could see the below playing out... Can't forecast sentiment.
FPH.NZX - 2016/2021 FY17F FY18F FY19F FY20F ADJUSTED EARNINGS PER SHARE 28.22cps 34.37cps 42.29cps 48.46cps SP AT 52WK FORWARD EARNINGS MEAN OF 35 $12.02 $14.80 $16.96 $18.60
Just playing around here.
me an is mean.
....................................2016.......... ....2017........2018.........2019........2020
EPS www.4tradwes.com.. .25................29.5..........33.3..........39. 2........46.6
eps.growth................................18%..... ......12.8%.........17.7%.......11.7%...........me an/average.15.5%
EPS......Hardt.................25.27.............2 8.22.........34.37.........42.29......48.46
eps.growt.................................11.67%.. ......21.17%.........23%........14.5%...........me an/average.17.5%
Question.What is a fair PE for a company growing between 15.5% and 17,5%.?
The current PE is 37.5.
I would say a lot less then 35. Especially with the looming legal issues.
Agree.
I think we must also remember the current PE is 37.5, which is really thirty seven and a half YEARS current year's earnings.ie nearly 40 years?
Hardt's mean eps growth is 17.5% ,so FPH is trading at present time over twice eps growth.
W69 is correct that FPH has always traded on a PE between 30 and 35.
I would think 50% higher than Hardt's mean 17.5 % eps growth, which would be a PE of 26.25.may be fair or very fair value.
Litigation.Forest mentioned looming legal issues.These are very real and are going to be considerable.Have analysts accounted fully for them?
"An estimate of the financial effect cannot be made".
This in relation to litigation.
The financial effect is a total unknown it seems.
The litigation can be potentially profitable for them if they get payed for infringements or it could be very costly if they have to pay.
Something in between is more likely of course but the fact that the company state that it is not possible to make an estimate is a worry.
What we do know that just over $20mil was spent on litigation last FY and this FY FPH expect the same.
But the real cost might not be the $20mil a year spend on litigation or the possible payout, but the distraction those court cases create for management and directors.
So far FPH seem to be able to handle the distraction of litigation alright but will this continue?
Hypothetically speaking, let's say they lose the formidable rubber strap patent - which is used to fasten the sleep apnoea mask onto patients big ol' mugs... would this bring any operation of theirs to a grinding halt?
A hell of a lot has to go wrong before arriving at the worst case scenario... probability is subjective of course.
All of the broker reports I can see are mindful of the litigation, but have stated that the case itself will have barely any material impact on the underlying operations moving forward...
The litigation is worth a closer look, but the quants are supportive of a strong long term investment even when accounting for a year or two of larger one off costs...
hardt at the last ASM it was mentioned that it is typical of a litigation of this nature to take 10 years to get resolved.
This together with the unknown outcome and longterm distraction and high PE could make FPH a less than ideal investment.
Another way one can look at the litigation is that supplying medical equipment in the US is competing with the big boys and litigation is just a normal part of doing business.
Uncertainty is not enough reason for me to doubt the return on this kind of growth profile.
Sure the sentiment could take a blow, but the material impact would likely be minimal... as we saw the market back in Dec.
The previous lot of litigation thrown out by RMD was kaka, I can always re-evaluate when RMD file their next one.
I have been moderately generous with the litigation costs in the following years...
FISHER & PAYKEL HEALTHCARE FY17A FY18F FY19F FY20F CAGR OPERATING REVENUES GENERATED - NZDm 869.5 1010.0 1175.0 1300.0 14.35% LITIGATION COSTS - NZDm 20.0 25.0 30.0 35.0 * Litigation costs as a percentage of trading revenues 2.30% 2.48% 2.55% 2.69% * OPERATING EBITDA GENERATED - NZDm 269.9 310.0 370.0 430.0 16.79% ADJUSTED NPAT 160.1 195.0 240.0 275.0 19.76% ADJUSTED EARNINGS PER SHARE 28.22cps 34.37cps 42.29cps 48.46cps *
The stock has performed well enough so far, watching closely as it runs along.
Litigation going OK.SP up 37% for the yr
http://www.nzherald.co.nz/business/n...ectid=11910204
Am I having a brain freeze, or does this make absolutely no sense:
"
In May, the medical devices maker said it expected operating revenue to be about $1 billion and net profit in a range of $180 million-to-$190m, based on the New Zealand dollar trading at 69 US cents. However, while trading has been in-line with expectations for the first five months of the financial year, the kiwi has been firmer than forecast.
Assuming an exchange rate of approximately 72.5 US cents for the remainder of the year, F&P Healthcare expects operating revenue to approach $1b and net profit to be "in the range" of approximately $180m to $190m dollars, chief executive Lewis Gradon said in speech notes published ahead of the annual general meeting.
"
U've got it figured WSL.Obviously ? NP better than expected?.Some of ER will be hedged.
I think he wants to say that previously they expected revenue of more than $1b (remember, they normally exceed expectations) and now they only expect to come close to $1b. 4-traders turned their May forecast into $1016m ... and are probably now going back to something like $960m ... $980m (just my uninformed guess).
I think other companies wouldn't have bothered with a downgrade ... but FPH prefers to exceed expectations - i.e. their revenue still might come out at or above the 9 Naughties ...
My interpretation is:
Despite a stronger NZD we still expect NPAT to come in between $180-$190m. A lower NZD would have resulted in a better than previously forecast number.
Or am I wrong?
That's my take on it as well McD
Someone likes their ventilators
Life not love??
Some serious OE fund money with a lot of lust then?
Or funds with a short term view being replaced by funds with a longer term view?
Drivers of future PE
Interest rates staying lower for longer
Litigation outcomes. Resmed not refiled & outcome shortly
Exchange rates
Company performance & expansion
Resmed growth 4 %,market growth 8-10%
Labour affect on R & D policies & exchange rates
What have I missed?
Correct - FPH looks dear, but it always did. In my books it is in with a forward PE of 34, a backward PE of 70 (shocking) and a CAGR (slightly below) 10. Even if I apply the original Graham formula, this stock looks dear.
Just compared them to one of the truly international health care stocks: Fresenius (German healthcare giant specialising in dialysis equipment and everything related and 25 times larger than FPH) sells currently for a forward PE of 19, a backward PE of 29 and they have a CAGR above 10. Maybe I should shift some more money to Germany ... ;);
On the other hand - nobody makes money by telling the markets that they are stupid. Do hold some FPH (as well as some FRE (DE) and keep monitoring the uptrend ...
Thanks for your post BP.
Over the years we all develope our own style of investing.
I have known people who have done very well investing in only booze shares,others only property shares,while others just like shares that are doing well such as FPH,POT,MFT and AIA,without looking at underlying business ratios.Others rely on charts.So no real "silver bullet" to investing.
I try to have a disciplined approach to my major holdings.
1] Must be a growth sector with strong tail winds,such as retirement,health,tourism ,finance.
2] Must have management who talk simply,and do as they say.
3] Must have a strong balance sheet with very positve cash flow.Business must be profitable.
4] Must be paying a dividend,and have the capacity to pay increasing dividends.
5] EPS growth should be about the same or higher than the company's PE ratio.
......[ a ] Should the growth rate be a lot higher than the PE buy more.
......[ b ] Should the growth rate be a lot lower than the PE take care.
......[ c ] Should the PE ratio be twice the growth rate take extreme care.
......[ d ] Should the PE ratio be over twice the growth rate.sell.
This disciplined approach has both made me a lot of money,and saved me losing money.
I will stick with it.
Percy, these are good principles, and actually my strategy is not that different. I just noticed at a recent review of my investment results that I could have done much better by allowing the gains to run instead of selling an upwards trending stock based on fundamental views. FPH is one of these stocks I kept as a result of this review despite it now looking a bit too dear - and so far I can't complain about the outcome.
I see as well the risks in this case as limited - my buy in price is below what I would consider as fair value.
Anyway - you are right, there are many ways to skin a cat ... and I don't think there is a best investment approach either. There are just some approaches which are good enough - and many which are not. I think so far we both seem to be well positioned - despite the odd drawback ;)
Yes it is always very difficult selling a stock that is in a strong uptrend.And yes the uptrend keeps going up.In FTH's case I sold when they were over $10 before they dropped to nearly $8,then rising up to over $12.So I have missed 20% growth with them,but have more than made that up with the funds elsewhere.
If you recycle funds into a stock where the eps growth rate is higher than its PE ratio, your portfolio should keep out performing.
Thanks for your post Percy and for "sharing" your investing style (business plan) with other posters and readers on Sharetrader.
I'm reading Van Tharp's book Super Trader at the moment and he says that to be successful you need a business plan with objectives and methodology for your trading/investing.
- What is your mission statement? What's the real motivation behind your trading?
- What are your goals and objectives?
- What are your trading and market beliefs. You cannot trade the market. You can only trade your beliefs about the market. As a result, it's a good idea to identify those beliefs.
The business plan has to suit your personality eg short term trader, long term investor, and level of risk. In other words explore and discover what works for you. And we are all different so there is no one right way to invest or trade.
161 US patents,357 US patents pending