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Most liked posts in thread: duc's 'Margin of Safety' investment

  1. InsvestoBoy

    InsvestoBoy

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    What? No.

    The price does not reflect "beat up", the price reflects actual value destruction caused by the managers investing in overvalued assets and speculating badly in macro markets.

    If you look at the second last link I provided, you will see the dividend you keep harping on about is a serious concern and nowhere near as certain as you seem to be banking on.

    I can't believe all the hoopla you threw up in the other thread about business analysis compared with how you are talking about this stock.

    So far all I can see is you apparently are claiming a "margin of safety" here is:
    - investing in a fund managed (very poorly) by others,
    - that the price will fluctuate so you can profit off the fluctuations.

    I thought you were going to pick an actual business.

    Quite amusing.
     
  2. ducati916

    ducati916

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    Well the return on investment has been +/- 9% [dividends] and a little capital appreciation, nothing worth writing home about. The full year will see the 18% yield.

    On the chart, yes, flat and no trading opportunities. So far, very boring.

    At some point, something will change and sentiment will change with it. We just don't know whether it will be good or bad. The stock will then move. This will provide opportunity. So for the moment, I'll simply sit tight and harvest the dividends.

    jog on
    duc
     
    jjbinks, qldfrog, Skate and 1 other person like this.
  3. ducati916

    ducati916

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    I have highlighted your summary and issue.

    This thread, as you suspected, was a continuation of another thread. Hence my 'definition' of a margin of safety is somewhat truncated. Be that as it may, an ETF is still, as a standalone criteria, capable of meeting many of the requirements of a full definition of a margin of safety.

    This was the thread: https://www.aussiestockforums.com/threads/the-education-of-an-investor.34402/

    Other criteria would be that it offered 'value'. Without going into how one might calculate value, suffice to say, that you would need to look at the stocks that formed the ETF and gauge their individual values to come to any valuation (this particular ETF was constituted from MLP's, which had, as a sector taken a beating).

    So 'any' ETF would not (on that basis) fulfil the definition of the margin of safety. As a generalisation however, I like ETFs because you can hold a single security and have the diversification of more than one security (outside of the provider risk etc) which is part of the definition (or concept of) margin of safety.

    So in answer to your question: no an ETF is not the only thing required, but, it is (for me) a good starting point.

    jog on
    duc
     
  4. ducati916

    ducati916

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    Dividend paid = $134.56

    Buy 28 shares with dividend
    Buy 200 shares from cash

    Total = 228 at $4.77 = $1087.56

    New Total 1910 shares.

    jog on
    duc
     
    IFocus, Skate and explod like this.
  5. InsvestoBoy

    InsvestoBoy

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    Wow that is pretty hilarious you picked AMZA as "investment grade" with a "margin of safety".

    Did you actually do any due diligence on this ticker at all?

    Two seconds of googling shows this is not a normal ETF but rather a speculative vehicle for the fund managers who apparently suck at their job:
    - They employ a covered call strategy and have underperformed the benchmark when they should've outperformed. (As an aside, hilarious that you want to run options on a fund already running options).
    - They overweighted an extremely overvalued underlying holding, showing the fund managers can't even employ their own value investing hahah.
    - They speculate in energy markets vias USO and UNG ETFs and they suck at it. They were short USO as it moved higher, and as of Nov 3 they were holding a pretty large short in UNG right before UNG rose 46%.

    https://seekingalpha.com/article/4217857-problem-infracap-mlp-fund

    Apparently it even speculates in other macro markets and were short US Long Bonds via TLT ETF into the recent spike

    https://seekingalpha.com/article/4230192-amza-4-reasons-mlp-etf-strong-sell

    hahahahahaha, is this seriously your pick to demonstrate value investing in investment grade and margin of safety?

    Do you really actually believe the dividend is 0.11/month hahahahahaha
     
    kahuna1 and rnr like this.
  6. ducati916

    ducati916

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    To understand the full context you would need to have a look at the other thread, 'Education of an Investor'.

    In short, Value Collector made 10x his money in CZZ.

    I was not overly impressed with CZZ as an investment, I labelled it a speculation as I felt it lacked a margin of safety.

    This did not go down well.

    I was challenged to find an 'investment' with a 'margin of safety'. This was my choice. As you can see from the comments, this choice did not impress those people.

    This is for a 5yr holding period in which time I will try to match VC's ten bagger, with a stock [ETF] that is unlikely to go anywhere near $50, but never say never.

    I will [attempt] to do this through:

    (a) trading the position; and
    (b) dividends.

    So I would actually like this to retrace back lower, so that I could buy back and add to my position moving forward.

    jog on
    duc
     
    qldfrog and jjbinks like this.
  7. ducati916

    ducati916

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    Dividend paid $118.48

    Buy 20 shares at $6.01
    New total 1501 shares.

    jog on
    duc
     
    cynic and Skate like this.