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yuvaltaylor
When Everything That Counts Can't Be Counted

Terrific column by Josh Brown here:

https://thereformedbroker.com/2019/06/13/when...t-counts-cant-be-counted/

It makes me wonder whether 2019 is the new 1999. I'd welcome your thoughts.

Yuval Taylor
Product Manager, Portfolio123
invest(igations)
Any opinions or recommendations in this message are not opinions or recommendations of Portfolio123 Securities LLC.

Jun 15, 2019 7:55:28 AM       
Edit 1 times, last edit by yuvaltaylor at Jun 15, 2019 8:13:49 AM
geov
Re: When Everything That Counts Can't Be Counted

Yes, interesting, but not convincing.

From July-2009 to now (same period as used in the article) Capital Strength stocks can perform significantly better than Growth, thanks to P123 ranking ability. My attached model of Value stocks shows Total Return = 784% versus 334% for Growth.

Attachment Capital Strength portfolio.png (157747 bytes) (Download count: 76)


Jun 15, 2019 11:46:45 AM       
geov
Re: When Everything That Counts Can't Be Counted

Running a combo of soon to be opened DM Specific Bond Recognition Strategy (IEF-SSO) and the Capital Strength model, Total Return doubles to 1,550%, for an annualized return of 30% plus. So who cares about "Growth"?

Attachment Combo DM and Capital Strength portfolio.png (153801 bytes) (Download count: 73)


Jun 15, 2019 11:59:32 AM       
regallow
Re: When Everything That Counts Can't Be Counted

Yes, for me the importance of intangible assets has always been frustrating to analyze and it was a large factor in the "irrational exuberance" period around 1999 and 2000. My frustration lies in my inability to separate good estimated and managed intangible asset values from overblown hyped ones intended to attract investors rather than business. I may be wrong, but it would seem easier to manipulate intangible assets, goodwill, and their write-downs to manipulate reported earnings than it is to manipulate tangible assets. So I don't directly favor one type over the other any more, and in the process have missed investing in many great stories (but I have also missed investing in many complete failures, also).

Interesting models, Georg!

Bob

"Logic is a systematic method of coming to the wrong conclusion with confidence." - Unknown

Jun 15, 2019 12:59:00 PM       
nisser
Re: When Everything That Counts Can't Be Counted

I think you'd have to define value in a different way. I'm sure your definition of value in your model is wildly different than the article's discussion of book value.

uber, lyft, airbnb, pot stocks, tesla, beyond absurd, etc...they will all eventually fall back to earth once the novelty wears off and people realize that at the end of the day you need to make money at some point

Jun 15, 2019 1:32:43 PM       
yuvaltaylor
Re: When Everything That Counts Can't Be Counted

I think you'd have to define value in a different way. I'm sure your definition of value in your model is wildly different than the article's discussion of book value.

uber, lyft, airbnb, pot stocks, tesla, beyond absurd, etc...they will all eventually fall back to earth once the novelty wears off and people realize that at the end of the day you need to make money at some point


Excellent points. Also worth reading is Howard Marks's latest missive, available here: https://www.oaktreecapital.com/docs/default-s...is-time-its-different.pdf

Yuval Taylor
Product Manager, Portfolio123
invest(igations)
Any opinions or recommendations in this message are not opinions or recommendations of Portfolio123 Securities LLC.

Jun 15, 2019 11:34:00 PM       
geov
Re: When Everything That Counts Can't Be Counted

There is something fundamentally wrong which needs to be addressed. There is no real "Value Creation" in Uber, AirBnB etc. They cannot suck all that money out of the system and those that do the work get rewarded less and less.

Just imagine if Tim Berners-Lee (the Internet founder) decided to licence each IP address, license each website, have a monopolistic central email system charging 0.001c per email; etc etc --- unthinkable. But Google, Facebook, Uber, AirBNB, Amazon, Microsoft are all examples of companies striving for monopolistic internet applications, and the venture capitalist support/supported them, in complete contrast to the spirit of the inventor who gave it away for free.

Jun 16, 2019 7:41:53 AM