Gone to the Dogs

Great article Adrian. Entertaining and to the poin...

2012-01-27T08:00:25.191+02:00

Great article Adrian. Entertaining and to the point with a dash of realism about SA that doesn't give in to the normal pessimism. I like it.

Maybe with a little electricity thrown in with the...

2012-01-25T16:00:22.609+02:00

Maybe with a little electricity thrown in with the education. I hate reading about smelters not being built because of the electricity shortage.

Adrian, Bill Gates agrees with you. See the talk t...

2012-01-19T12:54:33.830+02:00

Adrian, Bill Gates agrees with you. See the talk that he did for TED, How state budgets is breaking US schools.

Link to the TED website with the talk: http://www.ted.com/talks/bill_gates_how_state_budgets_are_breaking_us_schools.html

Main point is that budget is used for other purposes rather than education, i.e. the future.

I agree with Andre, but it seems that SA business ...

2011-11-29T11:43:24.032+02:00

I agree with Andre, but it seems that SA business is doing better in the other slow growth countries than it is in Angola.

What a remarkable story, thanks Adrian. If there ...

2011-11-28T19:12:26.273+02:00

What a remarkable story, thanks Adrian.

If there is one thing I take from this, then it is that we dare not venture into the future without taking the hands of our Southern African neighbors. With Angola and Mozambique experiencing a renaissance and with the rich resource discoveries in Mozambique and Namibia, there is no reason why the Southern African region should not aspire to surpass the heights of the European Union.

I reckon it is South Africa's duty to engage with these neighboring economies. We have a lot to offer in terms of expertise. More important though, is that we will be able to realize one of the New Growth Path's ambitions: creating jobs through regional trade. The primary and secondary industries should be able to extract great value from closer relationships with our neighbors as would our services sector.

Here's hoping for some decisive action from our government. Silence those who would sour our relationships with our neighbors and extend a hand of friendship to Angola, Namibia, Botswana and Mozambique.

2011-10-23T07:42:53.764+02:00

This comment has been removed by a blog administrator.

..my point is, clearly some fund managers are bett...

2011-10-14T15:22:36.382+02:00

..my point is, clearly some fund managers are better than others.

I've never been a firm believer in a given set...

2011-10-14T09:35:55.240+02:00

I've never been a firm believer in a given set of rules for anything. Though the "7 sins of fund management" seem to present a good guideline, I'm not sure about rule 4. I mean isn't that what every active manager is here for? C.S Lewis once wrote a lousy book with an incredible preface that said in it, "Even on a biological level life is not like a river but a tree. It does not move towards unity but away from it and the creatures grow further apart as they increase in perfection. Good as it ripens, becomes continually more different not only from evil [bad] but from other good." I feel that is why Buffet can sit in his office and decide to pump $50 billion into Goldman Sachs without sending in a team for due diligence.

Hi Adrian, Looking for your email address, but ca...

2011-07-19T14:45:05.295+02:00

Hi Adrian,

Looking for your email address, but can't find it. I'm hoping to discuss Economics training for Paton with you. Kindly give me a call on 11-3255400.

Regards,

Isabel Jimenez

Adrian, Thank you for your response. As an undergr...

2011-07-12T17:42:07.392+02:00

Adrian,
Thank you for your response. As an undergraduate I feel deeply let down by what a university degree has to offer me.I have found this blog to be one of the few true guideposts out there. Along with the recommended readings you've offered,it has helped me start to build a firm foundation for what I truly believe will be a successful career as an intelligent investor.
Thank you.

Ryan

Hi Julian Thanks for your comment and the invitat...

2011-07-10T14:53:15.975+02:00

Hi Julian

Thanks for your comment and the invitation. I will be in Boston at the time of your seminar and so unfortunately cannot attend.

For this type of invitation please correspond privately via adrian@cannonassets.co.za.

Adrian

Hi Adrian...thank you for sharing your ideas on th...

2011-07-10T10:12:00.523+02:00

Hi Adrian...thank you for sharing your ideas on this blog. Like you, I'm interested in both value investing and libertarianism. I thought you might enjoy this post that involves both:

http://athousandnations.com/2011/06/23/exit-and-voice-in-the-intelligent-investor/

The subject of the blog itself is very interesting.

By the way, would you be interested in attending the 25th South African Libertarian Seminar this year? It's provisionally planned for 14-16 October in Cape Town.

I absolutely adore reading your blog posts, the va...

2011-07-08T05:39:23.698+02:00

I absolutely adore reading your blog posts, the variety of writing is smashing.This blog as usual was educational, I have had to bookmark your site and subscribe to your feed in ifeed. Your theme looks lovely.Thanks for sharing.

Regards

Stock Tips

I absolutely adore reading your blog posts, the va...

2011-07-08T05:19:12.820+02:00

Ryan, Thanks for your comment. I think your comm...

2011-07-04T17:39:28.789+02:00

Ryan,

Thanks for your comment. I think your comment about "every CEO believing his/her company is undervalued" is a fair one - it is seldom the case that you hear management imploring you to sell as an investor. This is an important point, as our objective in qualitative assessment is getting to better understand aspects that infer quality and depth, for which there are many objective tools (as opposed to emotional hooks). Asking management if they think the future looks good or if the stock is "cheap" is begging to become a vicitim of the Stockholm Syndrome.

Adrian

What I found particularly interesting was Adrian&#...

2011-07-04T11:10:39.207+02:00

What I found particularly interesting was Adrian's comment about over the years shifting to more qualitative methods. Does this mean engaging and speaking more with management to obtain a clearer view of the future prospects of the company? But would this not open up to bias in favor of the the business? Because surely almost every CEO must believe his/her company is currently undervalued and has greater potential than is currently captured in the market.

Awesome discussion around value investing. I look ...

2011-06-29T13:55:20.609+02:00

Awesome discussion around value investing. I look forward to doing the elective with you next year, were we can dig deep into this very interesting topic.

thanks for this presentation. all the best from an...

2011-06-26T15:16:50.537+02:00

thanks for this presentation. all the best from an investment analyst from romania.

In his weekly column, Investor's Notebook, Ste...

2011-06-23T09:40:32.469+02:00

In his weekly column, Investor's Notebook, Stephen Cranston of the Financial Mail refers to the above article "Temporary Insanity".

The full article, titled "Cassandras of the market" is available on the Financial Mail website via www.fm.co.za/Article.aspx?id=145980.

In the column Stephen writes:
"Adrian Saville of Cannon Asset Managers has put out a report to say how the social networking IPO bubble will end in tears. As Yogi Berra, the famous New York Yankees manager, would have put it, this is like déj€ vu all over again. Those heady days in 2000 of Pets.com and Boo.com seem to be back. Just looking at May, LinkedIn shares rocketed from US$45 to $122 on the first day before settling at $80. The Russian Web search company Yandex listed on Nasdaq and rose from $25 to $38 on the first day. Groupon is expected to get a market value of $20bn when it lists in a few weeks. It is a site which gives members special discount vouchers — a new- era Green Shield stamps operation. And even though it lost $450m last year, it could trade on a price to revenue multiple of 30.

Saville says that companies made up almost entirely of intangible assets can be subject to huge writedowns. We only ever hear about the winners. In March 2008 AOL bought a social networking site called Bebo for $850m. If AOL had bought Facebook for that price even the most grumpy tech bears would have had to admit it was a good deal. But Bebo was no Facebook and it was sold two years later to a private equity firm for a nominal $10m. To prove he is not a complete technophobe, Saville has worked up some enthusiasm for Intel, which has a profit margin of 35%, a return on equity of 27% and $12bn in cash. Yet it is considered a boring share on a modest 10 p:e ratio."

Benford is one that you dont want to compromise as...

2011-03-05T18:46:02.168+02:00

Benford is one that you dont want to compromise as it is such a relaible indicator of accounting irregularity, manipulation or error. Where this occirs what often follows is "permanent destruction of capital" from which there is no recovery.

That is quite interesting. Obviously though, when ...

2011-03-05T16:24:52.577+02:00

That is quite interesting. Obviously though, when considering to buy into a company there are numerous tools one uses in arriving to that decision and this being just one of them. I understand that often indicators an investor uses are not always in harmony and then most times it boils down to a more subjective conviction. Of the indicators that you use in your valuation, would you regard this one as one you would not compromise on? Or have there been instances when Benford's Law raised an alarm but the other indicators looked solid and you went on ahead and it turned out profitable?
Ryan

Ryan, thanks for the comments. Since we impleme...

2011-03-04T23:03:31.505+02:00

Ryan, thanks for the comments.

Since we implemented the tool a number of years ago, there have been a few intances where the tool has raised a flag over a comany that otherwise might have been considered investible. We have had one case where a company that we were invested in was subsequently screened out. The most recently flagged company, a small telecommunications business in South Africa, has since been revealed to be acutely financially stressed.

I'm blown away! I'm interested to know tho...

2011-03-04T14:32:50.937+02:00

I'm blown away! I'm interested to know though, has there ever been a scenario where Cannon was considering buying a company, and actually put this method to practice and ultimately led to you changing your decision or atleast raised alarms that led to further investigation and ultimately caused you to change your decision?
Ryan

Nice analysis, just easy for anyone to understand

2010-09-21T12:28:40.140+02:00

Nice analysis, just easy for anyone to understand

good post

2010-07-08T21:16:57.354+02:00

good post