StockFetcher Forums · General Discussion · YET ANOTHER ASOKO CONTRARIAN VALUE SELECTION..<< >>Post Follow-up
184 posts
msg #48375
Ignore as214
12/3/2006 11:01:26 PM

I bring you CAS or ZEUS.. I have my eye on both, and will be buying a significant stake in the one of them this week which provides me with a nicer entry. They are both part of the Metal Distributors Industry. As per my selection criteria, I focus on the industry that cumulatively as a whole has a combination of 1. THe lowest PE and 2. The lowest Price to Sales multiple. Number 1 assures the industry is Cheap.. Number 2 assures the industry has bottomed. This has worked even in recessions, if a Depression comes all bets are off. Within this industry CAS and ZEUS are a toss up for best valuations, thus I will let the market serve me this week and Ill take what it gives me. God I love this stuff!

79 posts
msg #48384
Ignore limestar
12/4/2006 11:57:07 AM

I've traded cas from under 10 to about 18, its a great value play and still is cheap. Timing wise, ZEUS looks better. Value wise, CAS is a little better.

184 posts
msg #48397
Ignore as214
12/5/2006 1:54:21 PM

Just bought 300K worth of ZEUS today at 24.65-24.70! Look at the one year chart and look at what DMA 28,-14 was doing..SLOPING UPWARDS with plenty of seperation between equity price and DMA. RSI2 was close to bottomed.. And most important VALUE VALUE VALUE, with ZEUS being part of Metals Distributors industry (LOW combination PE and PS multiples as a collective whole)..

10 posts
msg #48453
Ignore pocrane
12/7/2006 11:49:02 PM

as214: how do you decide when to take a profit or a small loss?

184 posts
msg #48457
Ignore as214
12/8/2006 9:19:18 AM


First things first my mindset is when I purchase a piece of a company I plan on holding it for one year minimum. Not just for tax advantage because I will sell less than a year if I have to, but also because this mindframe helps me stay away from the short term shennanigans and focus on the BIG PRIZE. I will sell a company when 1. It reaches its intrinsic value 2. Significant insider selling has occured by more than one insider with a special emphasis on what the Chief Financial Officer of the company is doing.

6,370 posts
msg #48473
Ignore TheRumpledOne
12/8/2006 2:36:08 PM

The Magic Of Compounding

Imagine you are offered a job for a month by a wealthy but eccentric uncle.

He offers you the choice of taking $1 million on the first day, to cover the
month's work, or taking payment on the last day of the month based on an
extremely modest payment of 1c on the first day, doubling every day.

At first glance, the former option sounds better than the first. Who wants
to put in a full day's work for a measly 1c, then do the same job the
following day for 2c, and so on, especially when the other option is a
million dollars in cash right now?

However, this scenario is designed to demonstrate the power of compounding.
If you start with 1c and double it every day of a 30-day month, you would
end up with a staggering $5.4m.

US investment advisor Richard Stoyeck points out the reason almost everyone
would jump at the $1m upfront offer is because the way the human mind works.
"You might say that we are hardwired to think in this linear fashion. The
software in our brains compels us to think about progressions as being
simple arithmetic ones," he says.

One person who thinks exponentially is investment guru Warren Buffett. He
drives a VW beetle when he can afford a Maserati. When asked why, he points
out that $1 investment now at a 10 percent annual return over 25 years will turn into $10 or more.

Therefore, whenever he buys something, he counts not its face value, but the lost opportunity. In the case of his car, the $100,000 extra he would need to pay for a fancy car will cost $1m in lost wealth over 25 years.

Such an approach is quite an eye opener if you think about day-to-day
living. That $3 coffee is actually costing you $30, that $7 magazine is
actually costing $70 and so on.

The lesson is it doesn't matter how small you start, you will make money by
letting compounding work for you either through accumulating income or
reducing costs.

Compounding can also have a dramatic effect on debts and this is something
many people overlook.

Most people tend to treat small numbers as unimportant. Investors' bias
toward big numbers may cause them to focus on investments, particularly
managed funds, that generated the highest returns during the past year while
ignoring the management fees being charged by those funds.

These same people will also ignore what may seem to be minor differences in
small numbers, such as expense ratios focusing on the net return rather than
the gross return less fees.

Expense ratios of mutual funds range from less than 0.5% for low cost index
funds to more than 2%.

Let's assume an investor makes a $10,000 initial investment and makes 10%
return a year. A fund with a 1.25 percent expense ratio would consume $895 (or
5.6 percent) of all the profits made over five years. Over 40 years, the costs
devour 36.7 percent of the wealth created (Stated differently, only 63.3 percent of the gross return remains.)

The expense drag is far less with an index fund. And while active funds can
often beat index funds over short periods, over long periods it is more
difficult to compensate for the huge cost drag. Of course, the lowest cost
method of investing is direct investment in shares, in a properly
diversified portfolio.

If you need an advisor to help you make investment decisions, look for those
with the low fixed fees or, even better, fees based on results.

David McEwen is managing director of Investment Research Group.

622 posts
msg #48478
Ignore luc1grunt
12/8/2006 5:49:10 PM


My brother is a fundamental, long-term investor and Buffett worshipper. He lives down the road from him (Buffett) and sees him around town as well as Berk's annual meeting.

Bro is good at finding the holds and maintaining focus, but has a hard time with entry.

I like the gains I get with long-term holds, but you can take a beating as well.... and some over the years have been painful.

Bro can't stand intraday volatility and thinks day/swing traders are nuts.

Happy medium has been achieved. We both work to expoloit each others talents and abilities. He finds the value gems, I help determine entry based on technicals. Saves a few bucks and adds up. Especially a buck one way or another on 500 shares.

As214....don't be discouraged by the posts (or lack of)......your knowledge is shared and gleaned by those watching.

As always, thanks to all who contribute.

10 posts
msg #48708
Ignore pocrane
12/18/2006 10:16:37 PM


One last question: how do you determine a company's intrinsic value?

184 posts
msg #48709
Ignore as214
12/18/2006 10:45:55 PM


I'm sorry I should have included this info above but basically the quickest and cheapest(BOTH FREE) ways to get intrinsic value 1.

Type in the symbol you're interested in getting a valuation on

2. Also free used to monitor insider activity. Even has search function to help find large insider activity. Institutional buying and selling is so overated it's not even funny. Insider buying is what really matters. In fact, in Ben Grahams book the intelligent investor he talks about this..about buying companies that have significant insider purchasing but not too much institutional sponsorship at the point of purchase. That whole institutional buy/sell thing was brought to the forefront by Investors Business Daily. The man who runs IBD ran a hedge-fund based on IBD Canslim principles and it was out of business in less than three years. Focus on what the insiders are doing.. More specifically what they're purchasing. Pay special attention to Chief Financial Officers they know the company's fiscal situation ..even much better than CEO and anyone on the Board of Directors will.

10 posts
msg #48710
Ignore pocrane
12/19/2006 8:54:16 AM

Thanks again!

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