Chris Lau - Seeking Alpha

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Thursday, December 30, 2010

Let me be honest: My Performance Review for 2010

There are two things to remember:
1. Know thyself
2. Nothing in excess

Gravitating around those two rules will reduce the chances of getting stuck in troubled places where it would be hard to get out.

1. Know thyself
In investing and finance, knowing thyself is a measurable, yet in news writing and reporting, few media writers would need to quantify their stock tips by reporting a "return-on-stock-tips" figure.

Ditto for Analysts.

Chart 1
Since writing for Seeking Alpha (www.seekingalpha.com), my reports (written in February 2009) yielded the following returns below. The phenomenal returns would look impressive, if not for the S&P returning almost 50% within the same period.


Companies Analyzed: BCE, Microsoft, Silver Wheaton, Valeant Pharmaceuticals (merged with Biovail in 2010):

Top: stock ticker
Right: Total return (%)

Chart 2
As for Seeking Alpha (www.seekingalpha.com) reports written from May 2009,  the following returns below are illustrated.This chart was generated in yahoo finance and represents reports for 9 companies: BCE, Activision, Gamestop, FedEx, First Solar, Ford, Family Dollar Stores, Strayer Education.
Top: stock ticker
Right: Total return (%)
Notes: Strayer Education and FedEx were argued for short plays. The rest were long plays. No report was written on Motorola in 2009.

Motorola was analyzed in 2010 and has reached its target price (with a 50% margin of safety level).

Published reports here.

Sunday, December 05, 2010

Warren Buffett's Biggest Mistake

Buffett's biggest mistake was investing in his own company. Specifically, Buffett spent 20 years in the textile business, instead of focusing on something more profitable like insurance (at the time).




Bottom Line:

If you're in a terrible business, get out of it. If you want to be a good manager, buy a good business, and everyone will think you're smart.
 and...
It's better to buy something that's good at a fair price, than to buy something cheap at a bargain price.

h/t Marketfolly (originally posted: 10/2010)