Welcome to GuruFocus Investment Space.

Please Join Us to share your investment ideas with more than 100,000 GuruFocus users.

Join      Log in

batbeer2 Feed

batbeer2's Space » Latest Feeds



  • batbeer2 commented on The Science of Hitting's article 11-16 13:17
    Shortcomings in My Investment Process
    Earlier this year, when Mr. Market wasn’t too impressed by the collection of companies within my investment portfolio, I wrote an article about the...
    View all 2 comments
    batbeer2 11-16 13:16
    • Hi SoH.

      Thanks for another article worth reading. You say:

      >> "...... mixed with a fair bit of patience, I believe I can find opportunities where better-than-average returns (based on what the market has historically produced) can be expected with a high degree of confidence over time."

      I would argue the goal is not to achieve better than average returns but satisfactory returns. I suspect a lot of investors with above average returns may not find them satisfactory. Others may find their returns satisfactory regardless of whether someone else is getting richer faster.

      It boils down to the question what your sanity is worth. You can become very rich not trying to beat the market or you can become Ackman.

      As to the subject of your post:

      If your proces is what you need to do stay rational, then that is the best proces for you. Some hunt with shot and buy a basket of stocks at a deep discount to tangible book while others feel a need to do a lot of research; trying to behave like the outright owner of a business. They hunt with a rifle.

      Either way, if it helps you buy more shares when they're cheap, it is a good proces.

      In short, it is not about a proces that may or may not generate higher returns. It is about what a given investor needs to do to behave rationally.

      Just some thoughts.
  • batbeer2 commented on Ken McGaha's article 11-16 09:04
    Failing to Buy Cal-Maine Foods Now Could Leave You With Egg on Your Face Later
    I am always willing to buy value wherever I find it. However, anyone who has spent significant amounts of time following my research will be quite...
    View all 3 comments
    batbeer2 11-16 09:04
    • Hi Ken,

      Thanks for you response.

      It seems Cal-Maine has done a lot of things right in recent years. It's just that I don't fully understand what exactly they have been doing right and whether it is sustainable.

      You say:

      >> If I have 10 times more sales than my competitor, I don't have 10 CEO's or 10 times as many peopel in the purchasing or accounting departments.

      Yes, there are economics of scale in any business but if this business were about labour costs, we would all be eating Chinese (or Vietnamese) table eggs. Another way to think of this is to realise that a merger of the two largest table egg producers in Oregon is probably not going to bother a producer in Florida.

      For the sake of this argument, let's say 5% of the cost of an egg is personell (that would be your 10 CEOs). Now let's say the transportation is 20% of cost. In such a scenario, location trumps size. I would sure like to see a breakdown of the cost of a table egg at the grocery.

      Given that a hen eats 200g of feed for each 50g egg produced, I'd say it's best to locate your egg farm at the nearest grain store within eight hours drive of the grocery you plan to sell to. BTW, hens with more room to move eat more and produce less.

      As far as negotiating power.... I'm not fully convinced Cal-Maine can charge more becasue they are bigger. The smaller egg farms are privately owned so it is difficult to quantify this effect if any. Perhaps the guy selling Chevrolets is not charging enough. You see, GM produces more vehicles than almost anyone else and they have a hugely fragmented customer base. Cal-Maine does not.


  • batbeer2 commented on Duane Ellsworth's article 11-15 04:20
    The Hypocrisy of Berkshire Hathaway
    Berkshire Hathaway's (BRK.B) long-time vice chairman, Charlie Munger (Trades, Portfolio), has no qualms bashing the "unethical" practices of Valeant...
    View all 11 comments
    batbeer2 11-15 04:20
    • "..... enormous damage to society" by displacing the "water that children and adults consume with sugar water."

      ROFL that's an argument only a fool who spends too much time on Wallstreet could make.

      As a matter of fact (and I do mean fact) in most places it is safer to drink Coca-Cola than (tap) water. Coca Cola will provide a safe non-alcoholic drink where government or anyone else is unable to provide plain drinking water safely. Coca Cola is the largest (and non-regulated) utility on our planet.


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)