Forum Archive Index - October 2000

["Brian Brakenridge" <brianbrak@xtra.co.nz>]

Couple of issues:

 

Management: Some people have suggested TRH as a stock for consideration. I don't believe it fits enough criteria and in particular where management is concerned. I have a very uncomfortable feeling about the way they have denied what is undeniably the terrible damage the fast ferries are doing to the Marlborough Sounds. The evidence is there for all to plainly see and you don't have to be a raving tree hugger to be saddened by what's happening. It seems the denial will be persistant until someone is killed and even then.....?.

 

Portfolio name: As Phil commented, I suggested we drop the name Buffett from the title, by no means because I wanted to distance myself from him, to the contrary. However I feel we should make it quite clear that we are following principles used religiously by a number of extremely successful investors who have very similar principles to Buffett and in some cases indeed mentored and motivated the man.

 

I suggested the word "Focused" because it is the common theme of many of these guys. The arguement is that the more stocks you own the more avaerage you become, the more difficult it is to beat the index, the more difficult it is to manage and keep track of you portfolio and most important, the more difficult it is to make informed and well researched investment decisions.

 

If you have a strictly focused or concentrated portfolio you are forced to research your stocks very thoroughly before making an investment decision and the only time you pay any attention to "Mr Market" is when you have identified and want to invest in a partnership in a company and then, "the price you pay will dictate the return you get".

 

I have openly admitted that I am a relative newbie to this game but before I committed any real money to equity investing I made a conscious decision to study the various ways of investing and decided that this one suited me best because in many ways it is the most simple, stress free and arguably the most successful. I think it is these three factors we are collectively putting to the test with the Focused Portfolio (or whatever name is chosen).

 

Someone recently suggested that this style is for the chicken s..ts. I disagree because the real fun comes when you see the market sell down a particular stock you like or when there is a general "grizzly" period which lets you in boots and all.

 

 

 

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