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Geoff Gannon Message

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Geoff Gannonmessage

  • coryashpt 2014-09-30 12:34
    Hi Geoff,

    Just wondering if you still follow Carboceramics and if you have any comments regarding their recent challenges.
  • arunbharadwaj20 2014-08-26 18:19
    Hello Guru Focus

    I am a first year MBA student from Krannert school of Management.

    I have been running a website titled www.thepokaranmoneymanager.com for the past 1.5 years. After reading Roger Lowenstein`s biography of Mr Warren Buffet, I began looking for net-nets (stocks with working cap > market cap) in the Indian small and mid cap space. Stumbling upon Avanti Feeds, a prawn and fish feed manufacturer, my research showed me that a big multinational seafood exporter had taken a stake at a valuation lower than the company`s current market capitalization. I bought Avanti at Rs 35/share and subsequently Rs 100/share. A new hardier variety of shrimp was introduced in India, the seafood industry began to boom and the subsequent rally in Avanti Feeds script took it to Rs 600/share.Currently, Avanti trades at Rs 1200/share, a 34x increase from the time I bought the share.

    Next, I recommended Tata Steel and Tata Sponge Iron at Rs 350/share and Rs 300/share respectively. Both these companies are from the Tata Group, India`s most trusted conglomerate.
    Tata Steel, trading at a $ 5 bi market cap and enterprise value of $ 13 bn, was trading cheaply for a company that is the world`s 6th largest producer of steel. Tata Sponge, sitting on mountains of cash, was a true value pick.

    While Tata Steel has moved up by 1.6x, Tata Sponge has zoomed up by 4x since the time of my recommendation (one year back).

    NIIT Ltd, Dhanuka Agritech and Lloyd Electric were recommended as plays in the skill development, agriculture and HVAC (heating ventilation air conditioning) space. They have all gone up anywhere between 2x to 5x.

    The tremendous up move in my recommendations have been due to the excess liquidity floating around in global financial markets, the decisive mandate given to the new Indian government, India`s long term economic prospects and the late realization of Indian analysts to the potential of these stocks.

    My investment philosophy is better illustrated in my website


    I am currently on the lookout for value investing/investment management summer internships in the USA with a specific focus on India small and mid cap equities.

    Would you please be able to mention some value investing companies whom I could contact for the intern?

    Also, are there any good conferences that I can attend/events where I can network with people from this industry?

    Thank you
  • shesobudha 2013-10-18 13:48
    like to invest in my MooseMyLemon nonprofit at MooseMyLemon>com @Gmail. Port to port bringing art to group homes, by innovative and inventive way of expression,  Art is a form of  science, humanity growth & Green Peace.  Shesobuddha has donated art to inspire youth growth
  • rookinvest 2013-09-14 05:02
    Hi Geoff,

    Your article on when to sell was quite illustrative for a rookie like myself, but I am having a hard time finding data. Where can I get the company's 10-year average operating margin?

  • Smiley 2012-11-29 10:10
    Hi Geoff

    A while back I messaged you about a project I was working on to make access to company annual reports easy. The free basic version of this app is now available for the iPad here incase you would like to try it out:

    Kind regards
  • pvsk77 2012-11-19 05:50
    What did you think about buying 'Great companies' at a fair price Vs. buying 'Average companies' at a bargain price? I am like you and would never have bought IBM at the valuation Warren bought. What are the characteristics of a great companies and how can you tell using 'objectively?
  • Josh Zachariah 2012-11-08 09:37
    Hey Geoff haven't seen any articles from you lately, are you still doing any writing?
  • tim bug 2012-09-09 11:08
    Hi Geoff,

    I just finished reading Stephen Penman's book 'Accounting for Value'. I was wondering what you think of it? Thanks!
  • Shoup22 2012-08-02 00:57
    Geoff, thank you for your article on METLIFE. I have deferred annuities with METLIFE setup for my two children. I set these up with money from a life insurance policy that I received when my husband passed away. The annuities were setup in 2007. They do not start to pay out until the children turn 18, which will happen in 2018 and 2022, respectively.  The payouts continue on their 25, 30 and 35th birthdays in addition to monthly income from 18-35. Should I be concerned about the security of this money for my children?  I am asking for your opinion and any input you have regarding how I should proceed in this shaky economy. Many thanks.
  • shb600 2012-06-18 17:34
    What is your take on the $1o million arbitration award in Brazil against LAKE?
  • Gabriel Canelli 2012-06-15 12:39
    Hello Geoff, How I can analyze the financial health of banks?
  • Sylverlee 2012-06-05 19:28
    Geoff Gannon: Glad you found the audio.

    My delivery isn't the best. But the audio content is often better than a lot of the articles I've written. It's a pity a l
    That's pretty awesome man. Sounds like we've probably read many of the same books and share a semi-similar investment strategy. I completed the CFA program, but your audio recordings came off as way more applicable than most of the things I learned from the CFA. You also incorporated with very clever examples. Glad to have you on the forum.
  • Sylverlee 2012-05-31 19:18
    Hey Geoff, I recently started listening to some of the audio recordings you posted. You are really knowledgeable, what is your background?
  • dyap 2012-05-27 18:30
    Hi Geoff,

    How should I think of SHE?  For eg, RSH has consistently been making profits(eps) and fcf for years.  Yet, SHE has not been increasing likewise.  What does this mean?  Does it indicate management misallocating profits?

    Thanks in advance.
  • jrossi 2012-05-19 10:00
    2.50 EBITDA per share, multiplied by 15= 37.5 max.  I don't pay for growth prospects.
  • varietymotors 2012-05-17 13:32
    Hi Geoff,
    I would pay $76 per share for the mystery stock.
  • Enjoylife 2012-05-14 06:25

    DNB is a great buy in my opinion.  I have been considering it myself since it dropped to the mid-60 dollar range last week.  I have one concern about it and this holds true for a few other stocks that have this same characteristic.  Several very successful companies have been buying back stock at a rapid pace and this has caused share holders equity to go negative. Direct TV, Autozone and Dunn and Bradstreet are examples.  All have great track records for business and stock price growth long term so this appears to be a strategic decision to fiance through debt rather than equity.  My question is at what point can an investor judge that this practice is no longer creating value but adding risk to the investment.  There can obviously be too much leverage.  However when money is cheap to borrow and ROIC is high this seems like a great way to create value for shareholders, to just borrow at 3% and buy stock with an ROIC over 20% but how much is to much?

    Thank you.

    Jeff Campbell
  • AlbertaSunwapta 2012-04-26 10:37
    Hi Geoff,

    I'd love to see you address the educational issue again.  (See Do I need an MBA to be an investment professional.)

    If you look at Marketocracy you'll see many successes that lack formal qualifications.

    Myself, I worked with a number of former engineers that became CFAs.  In my mind, they left a higher calling just to play the money game.  Such wasted talent.  

    Moreover, like many accountants - and CFAs - one's skills with numbers, formulas etc. doesn't mean one will have any real passion, or success, whatsoever for investing.  They want to succeed at their job but "the job" and investment success don't always correlate.  Just take a look at AIMR and their treatment of CFAs.  Post 1999 how many CFAs were taken to task by AIMR for the advice they gave and investors they misled?  Then again, post 2008 how many CFAs were taken to task for their flogging of doomed derivatives, etc. and global financial havoc they wreaked?  

    So there is some sort of division in personalities out there.  As Buffett says, temperament matters hugely.  It seems to me that there are accountants that just love the processing of transactions, taking a micro view and not a macro view of their business.  i.e. not looking at businesses holistically with an owner's mind.  Many many CFAs too.  I imagine most Las Vegas gamblers are like this to - they love the game more than winning or figuring out how to win (which might entail leaving the game).

    I don't know what to call it but many people, trained or untrained investors, accountants, CFAs etc are like card players, gamblers etc. in that they just love the doing, they love the activity but have little real regard for actually winning.

    I once took an evening investment course and the teacher said stay away from tax preparers like H&R Bock for they work on tight margins.  They train their staff not to look at certain things, not to question certain things - as any extra work kills their margins.  This is so profound and I was reminded of this in looking at CFA course materials and in 2009 some derivative course material.  In that last course, I found mention of Buffett's criticism of derivatives AND OF his later buying of derivatives (seemingly to point out some sort of hypocrisy on Buffett's part).  Clearly they totally missed his WMD /daisy chain effect message.   Again, you don't want your students thinking too deeply.

    As Buffett has said how a generation of MBAs trained to believe in the efficient market hypothesis have greatly helped his cause.  (I don't have the exact quote.)

    Anyway I hope my little rant will inspire you to write more on education and investing.
  • mariusm 2012-04-25 03:33
    Hi Geoff, can you recommend an online broker for European stocks?
  • cor7997 2012-04-22 03:49
    Hi Geoff,
    about E&P companies and about natural gas.
    From their numbers (history of positive fcf, 0 debt, ...),
    from various sources (see for example this end '08 letter sec.gov/Archives/edgar/data/1071993/000141223408000059/sc13dfilingmcf.htm from Mark Sellers or this completegrowth.com/cvi/forum/viewforum.php?f=122)
    from their site (contango.com/investor/events/20120417/Contango_IPAA2012.pdf)
    it seems MCF is a very good operator in a commodity industry.
    Their philosophy is well described here (E&P 101 - The Short Course - 31/01/2001 - contango.com/investor/events/E_P_101_The%20Short%20Course.ppt) and this is how Ariel define them
    "CONTANGO OIL & GAS CO. (MCF). Headquartered in Houston, Texas, Contango Oil & Gas was founded by Kenneth Peak (current Chairman and CEO) in 1999. Contango is an independent natural gas and oil company, primarily focused on natural gas. The company’s business is to explore, develop, produce and acquire natural gas and oil properties primarily offshore in the Gulf of Mexico. The company believes the only competitive advantage in the natural gas and oil business is to be among the lowest cost producers. Thus, the company has extremely lean operations with only 8 employees and is very focused on keeping its all-in costs to find, develop and produce a Mcf at one of the lowest levels in the industry".
    So, my question is: how much a BUY in this company is a bet on nat gas or on its cheapness (if it is cheap!)?
    I know it's a very difficult industry, out of most of our circle of competence, but with these depressed prices either on E&P and on natural gas I felt obliged to learn something about this industry.
    Thank you,
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