Value Investing - Possibly set up a club

TheBikeGuy

Hi,

I've developed a huge interest in investing, particularly the value investing method of Warren Buffet. Just looking for other peoples opinions on value investing

I'd be interested in setting up a club if there is a bit of interest, be a great way to get involved with a small amount of money

Thanks

jank

Yes I would be interested in this.

Have you any stocks earmarked? Been looking at BNK, COP and AXP lately.

TheBikeGuy

Hi Jank,

We'll try get a few more people. I might set up a seperate thread on just setting up a investment club.

Volkswagen would be my favourite at the moment, a value investors dream.

Im a fan of COP I just added some today to my simulator account, I wouldnt be too keen on the other two as there P/E ratios are near the 20 mark, much to high for me.

I also like the look of CF and HCA

jank

You need to look at more than just P/E.
EPS for AXP has been steady for the last 10 years and growing, GFC cleaning aside. Forward P/E is 11.4 too.
BK has a book value ratio of .9, and average EPS growth over a number of years and a forward P/E of 10
Dont discount dividends as well, very important for the long term value investor.

VOW looks very cheap alright, good book value ratio, no div though and strangely morning star doesnt see it as a value stock, core instead. Car manufactuers are risky though, very tied into the state of the global economy a few great years might give way to a few terrible years. Might be better growth in the German Marque brands.

TheBikeGuy

I had done a quick check of AXP, didnt spot there forward P/E which does look good in fairness. There yoy quarterly revenue growth is just 2.3% though, while there yoy earnings growth has contracted by 46%.

Also there yearly revenue is less than $30 Billion yet there market value is more than double that.

Another major red flag for me is that AXP company insiders have sold 98% of there shares in the company within the last 6 months, scary stuff.

Contrast that with Volkswagen which has yoy quarterly revenue growth of 26.80% and earnings growth of 60.4%

Biggest factor for me is that earnings for volkswagen have increased roughly 1700% in the last 10 years. Yet there share price has increased by less than 500%.

And this is during one of the worst global recessions in a very long time.

Any views on BP?

arrowloopboy

If your looking at value investing,you could do alot worse than studying the works of Ben Graham,the daddy of value investing

Forgot to add.,Buffet was a pupil of his,and he didn't do so bad.

TheBikeGuy

arrowloopboy wrote: »

If your looking at value investing,you could do alot worse than studying the works of Ben Graham,the daddy of value investing

Forgot to add.,Buffet was a pupil of his,and he didn't do so bad.

Thanks arrowloopboy, I have my copy of the intelligent investor bought Just need to get stuck into it!

jank

Should be starting it this week as I have to finish random walk down wall street first.

jank

TheBikeGuy wrote: »

I had done a quick check of AXP, didnt spot there forward P/E which does look good in fairness. There yoy quarterly revenue growth is just 2.3% though, while there yoy earnings growth has contracted by 46%.

Also there yearly revenue is less than $30 Billion yet there market value is more than double that.

Another major red flag for me is that AXP company insiders have sold 98% of there shares in the company within the last 6 months, scary stuff.

Contrast that with Volkswagen which has yoy quarterly revenue growth of 26.80% and earnings growth of 60.4%

Biggest factor for me is that earnings for volkswagen have increased roughly 1700% in the last 10 years. Yet there share price has increased by less than 500%.

And this is during one of the worst global recessions in a very long time.

Any views on BP?

Didnt know about that 98% figure. Eye raising alright. Where did you get the figure for YOY growth contracted by 46%? Are we talking about the last 12 months?

Berkshire Hathaway owns about over 12% of the compnay, they bought into the stock alot back in the 90's. VOW certainly does seem to tick alot of boxes. Wonder why the market has such a negative outlook on them though. Is there a reason why they arent paying the div though? They did up until last year. Cash flow problems? Stock buyback?

No idea about BP but if you want to build a portfolio then either one of COP or BP (if its what you want as an investment) would do the trick. Having both increases your risk, unless you plan on having 50+ stocks in your portfolio.

jank

Another for people to chew over.
GSK & TMK

TheBikeGuy

jank wrote: »

Didnt know about that 98% figure. Eye raising alright. Where did you get the figure for YOY growth contracted by 46%? Are we talking about the last 12 months?

Berkshire Hathaway owns about over 12% of the compnay, they bought into the stock alot back in the 90's. VOW certainly does seem to tick alot of boxes. Wonder why the market has such a negative outlook on them though. Is there a reason why they arent paying the div though? They did up until last year. Cash flow problems? Stock buyback?

No idea about BP but if you want to build a portfolio then either one of COP or BP (if its what you want as an investment) would do the trick. Having both increases your risk, unless you plan on having 50+ stocks in your portfolio.

I use yahoo finance for most of my quick initial research, I got the 46% slower growth from here http://uk.finance.yahoo.com/q/ks?s=AXP


Good call on having one of COP or BP, think i'd go for COP. BP's management are woeful.

As for the Volkswagen dividend I would assume it was stopped as they completed there take over of Porsche around the time they stopped the dividend and a huge chunk of cash went there. I wouldnt be surprised if they reintroduced one within a year or two.

Porsche have also had two record years in a row, couple that with Audi and all the other companies Volkswagen own and I can see earnings continue to grow very strongly.


Im at a loss as to why the market undervalues it so much, although car manufactures in general are normally valued very lowly, rarely going over a P/E of 10/1

TheBikeGuy

jank wrote: »

Another for people to chew over.
GSK & TMK

Had a quick look a TMK, looks good I might look into it a bit more.

I've looked over GSK before I was never to keen on it, that dividend is very attractive though!

willietherock

I'm from Cork (Boy), non financial background with huge interest in investing. Is their any clubs, groups local that meet regularily and discuss investing?

TheBikeGuy

willietherock wrote: »

I'm from Cork (Boy), non financial background with huge interest in investing. Is their any clubs, groups local that meet regularily and discuss investing?

I've no idea to be honest, I'm based around Dublin Im hoping to start one up around here.

Best bet for you is to google investment clubs in Cork. Im sure there is a decent number around

TheBikeGuy

Just found a list of existing clubs

http://www.ticn.com/TICN/about/club_list.asp

leandrolorenzi

Hi willietherock, I am in Cork too, with interest on sharing competencies and knowledge. I am more interested in forex than in stocks anyway I am based in BishopTown we can set up something, like a club <snip - dont post person info, use PM>

P4PAUL

Hey The bikeguy. i Haven't got any experience investing but have been steadily becoming more interested in the markets/ investments etc. also based in dublin . would have an interest in club allright. Think its a great idea for people with an interest without to much risk.

TheBikeGuy

Hi P4Paul,

Great stuff, I've actually just started a new thread 10 minutes ago on this and askaboutmoney.com. Hopefully we'll get some more interest, If we got 10 people we could make it feasible.

Its a great way to get involved. I was planning on maybe once a month meetings in the city centre and maybe each person adding 50 euro a month for investments.

What do you think? Nothings set in stone so we can decide whatever form we want

P4PAUL

+1 agreed. once we get a few more numbers i would def say its a runner. im sure theres other people with an interest but lack experienxce also that would be interested.

TheBikeGuy

Brilliant, agreed I think theres a lot of people out there who'd like to get involved with small money, the fees make it impossible for someone to start small by themselves.

Check this link out http://www.camocon.ie/pdf/invclubs.pdf

josealdo

i'm in waterford and would like to join club .

instead of reinventing the wheel , i think its a very good idea to copy warren buffett .

TheBikeGuy

figs666 wrote: »

i'm in waterford and would like to join club .

instead of reinventing the wheel , i think its a very good idea to copy warren buffett .

Hi Figs,

We're trying to get a club going in Dublin, If you could be up once a month for the meetings you could join?

liamjames1

TheBikeGuy wrote: »

Brilliant, agreed I think theres a lot of people out there who'd like to get involved with small money, the fees make it impossible for someone to start small by themselves.

Check this link out http://www.camocon.ie/pdf/invclubs.pdf

Im in Dublin and defo interested in getting involved

Sonnenblumen

I'd be interested too and Dublin based.

TheBikeGuy

Hi LiamJames and Sonnenblumen,

Excellent, we're starting to take shape, once we get a few more we can get the ball rolling.

What do you guys think of the meeting up once a month and the 50 euro per month per member?

Also if your able to spread the word out amongst friends, family, colleagues etc please do. The more people we get the better it will be. Although 20 is the maximum I think

RATM

Do we know how this would actually work? Like how are investment decisions arrived at? Just wondering about the mechanics of it. I'm Dublin based and interested too

TheBikeGuy

RATM wrote: »

Do we know how this would actually work? Like how are investment decisions arrived at? Just wondering about the mechanics of it. I'm Dublin based and interested too

Hi RATM,

The Irish Stock Exchange have a brochure which details the layout of investment clubs, I think the fairest thing to do would be to use this format as it was created independently.

Basically all decisions are decided by a majority vote from all members of the club. That covers everything to investment decisions, to monthly contributions, to new members etc etc

Have a look at there brochure its pretty detailed.

http://www.camocon.ie/pdf/invclubs.pdf

Sonnenblumen

TheBikeGuy wrote: »

Hi RATM,

The Irish Stock Exchange have a brochure which details the layout of investment clubs, I think the fairest thing to do would be to use this format as it was created independently.

Basically all decisions are decided by a majority vote from all members of the club. That covers everything to investment decisions, to monthly contributions, to new members etc etc

Have a look at there brochure its pretty detailed.

http://www.camocon.ie/pdf/invclubs.pdf

Sorry but I would be much more interested in joining a club in which members meet informally to exchange/discuss 'shares'. I am not interested to commit to making regular monthly financial contributions into a group share purchase fund or purchasing any shares decided on a majority vote basis. There are many practical issues with the operation of 'group schemes' potentially making the whole process difficult and/or unmanageable. I would prefer instead to join a club, pay a sub, exchange opinions but retain an independent approach to deciding when, how much and which shares I may wish to purchase.

TheBikeGuy

Sonnenblumen wrote: »

Sorry but I would be much more interested in joining a club in which members meet informally to exchange/discuss 'shares'. I am not interested to commit to making regular monthly financial contributions into a group share purchase fund or purchasing any shares decided on a majority vote basis. There are many practical issues with the operation of 'group schemes' potentially making the whole process difficult and/or unmanageable. I would prefer instead to join a club, pay a sub, exchange opinions but retain an independent approach to deciding when, how much and which shares I may wish to purchase.

Ok thanks for the interest anyway, good luck

TheBikeGuy

We're still looking for more numbers, anyone interest please get in touch asap

The Dublin Whale

Sonnenblumen wrote: »

Sorry but I would be much more interested in joining a club in which members meet informally to exchange/discuss 'shares'. I am not interested to commit to making regular monthly financial contributions into a group share purchase fund or purchasing any shares decided on a majority vote basis. There are many practical issues with the operation of 'group schemes' potentially making the whole process difficult and/or unmanageable. I would prefer instead to join a club, pay a sub, exchange opinions but retain an independent approach to deciding when, how much and which shares I may wish to purchase.

why would you want to pay a sub for an informal meeting group? who would get the sub and what would be the purpose of it? I'll meet you to exchange opinions if you want to pay me?

TheBikeGuy

The Dublin Whale wrote: »

why would you want to pay a sub for an informal meeting group? who would get the sub and what would be the purpose of it? I'll meet you to exchange opinions if you want to pay me?

Can we keep this on topic please, trying to set up a club here. Private message him if you want to talk to him

CathalConroy

TheBikeGuy wrote: »

We're still looking for more numbers, anyone interest please get in touch asap

Would be interested if there's still places

JOB93

I might also be interested depending on when/where the meetings would be. I know I don't post a lot in investment threads but I'm a second year finance and economics student so this would be right up my street I also work part-time so I could probably make €50 a month.

Also you could have more than 20 members if you registered as a limited company but then you have more tax issues, forms to complete and its just messier in general. I think 20 would be more than big enough for an investing club.

TheBikeGuy

JOB93 wrote: »

I might also be interested depending on when/where the meetings would be. I know I don't post a lot in investment threads but I'm a second year finance and economics student so this would be right up my street I also work part-time so I could probably make €50 a month.

Also you could have more than 20 members if you registered as a limited company but then you have more tax issues, forms to complete and its just messier in general. I think 20 would be more than big enough for an investing club.

Hi Job, Your spot on about having to form a limited company if we've more than 20 people, thats why if we keep it under 20 we can operate as a partnership, much more simpler.

We'd love to have you on board, the plan is to operate in the dublin area, most likely in the city centre to start off but we may move to somewhere different in Dublin that is better located for everyone once we're up and running.

What locations suit you best?

arrowloopboy

JOB93 wrote: »

I might also be interested depending on when/where the meetings would be. I know I don't post a lot in investment threads but I'm a second year finance and economics student so this would be right up my street I also work part-time so I could probably make €50 a month.

Also you could have more than 20 members if you registered as a limited company but then you have more tax issues, forms to complete and its just messier in general. I think 20 would be more than big enough for an investing club.

You should operate the fund via spread betting ,and Fcuk the taxman,and before anyone says it,i know its meant to be based on value investing,but define value,to me,its taking any trade at any time that has a higher probability than not of winning.

colm_c

This is something I'd be interested in, I've got no investment experience but it's something I'm interested in learning about.

I work in Dublin city centre so anywhere in that area is good for me.

TheBikeGuy

colm_c wrote: »

This is something I'd be interested in, I've got no investment experience but it's something I'm interested in learning about.

I work in Dublin city centre so anywhere in that area is good for me.

Great stuff, we've a good bit of interest now. I'll send you a pm

CathalConroy

arrowloopboy wrote: »

You should operate the fund via spread betting ,and Fcuk the taxman,and before anyone says it,i know its meant to be based on value investing,but define value,to me,its taking any trade at any time that has a higher probability than not of winning.

Spread betting uses leverage so would leave us open to large losses and as most value investments have a time horizon of about 3 years we would have to continuously post margin calls and pay overnight charges. I don't think we should worry too much about tax as even if we can match the pro's we won't be looking at more than 15-20% annualised returns.

arrowloopboy

CathalConroy wrote: »

Spread betting uses leverage so would leave us open to large losses and as most value investments have a time horizon of about 3 years we would have to continuously post margin calls and pay overnight charges. I don't think we should worry too much about tax as even if we can match the pro's we won't be looking at more than 15-20% annualised returns.

Your right,if ye are looking at an average position been over 3yrs, s/betting wont work(thats a long time to keep 20 members all on the same sheet/continent).
Nightly rollover charges only apply to DFBs (daily funded bets).
I only trade main FTSE so uiseing S/Ls mean no nasty margin calls.
Spread Bets can be bought/sold on a 3mt/6mt/9mt/ or an annual ,you just pay more spread the further out the closing date is,3/6mts make up 90% of my trades.
Most people associate s/betting with daily funded forex trading,but if utilised correctly,it can be a very effective way of trading medium term with zilch for the tax man,which suites me:D.
This type of investing won't suite me,but might i suggest ye set aside your first 3 or 4 meetings to develope a system that gives ye a set of criteria for opening/a stop loss/and a profit takeing regieme,this should be very easy to understand,with very little riggle room.
If ye do your homework 15/20% should be simples.

woozyeyes

I'm interested too. Can you PM details. I dont have enough posts to PM you.

TheBikeGuy

Our first get together is coming up soon. Anyone new interested in taking part needs to get in touch ASAP, Thanks

Dina1

Hi, I worked in Finance (mainly giving seminars and create awareness for beginners) and I trying to get back on track and increase my groups. I can give you a few pointers if a want.
Its better to know all type kind of investments, ages before you even consider to do so.

QWERTY234

Hi guys, I would be very keen in joining this group. I have no investment experience but is an area I have a keen interest in.

jank

Going to add VIAB, WFC and DIS to the list as well. Two media companies in there, to me DIS is the better one but buffet has bought alot of VIAB recently.

capefear

Hi guys. I have no experience but would be intereted in joining and learning a few bits.
So if its not to late can I be included.

TheBikeGuy

capefear wrote: »

Hi guys. I have no experience but would be intereted in joining and learning a few bits.
So if its not to late can I be included.

Hi Capefear, I'll send you a pm now

PingO_O

Hi guys, just thought I'd share a website that I've found really helpful as I'm new to the ideas of value investing and I've learned a lot from watching the videos on there.

www.buffettsbooks.com

caseyphl

Hi I'd be interested too, little experience but its an area I would like to get more involved in.
I work in North Dublin.

TheBikeGuy

Our next meeting is on the 11th of March if anyone else is interested in joining please get in touch asap

daithi7

great irish value investing website for ye guys gillenmarkets.com

Also a site called value investing institute which isn't bad either.