Join our investing community

Shares with sustainable market advantage

Discussion in 'Shares' started by Simon, 24th May, 2007.

  1. Simon

    Simon Well-Known Member

    Joined:
    17th Sep, 2005
    Posts:
    520
    Location:
    Newcastle
    Just reading through the New Buffetology Book atm.

    Current chapter talks about shares with a sustainable competitive advantage ie shares that have a monopoly in the marketplace or such brand awareness that noone can compete with them.

    ASX comes to mind immediately.

    Big four banks and WOW also are worth considering.

    Anyone have any to add to this list?

    Is just a mental exercise at this stage.

    Cheers,
     
  2. DaveA

    DaveA Well-Known Member

    Joined:
    19th Feb, 2007
    Posts:
    617
    Location:
    Sydney, NSW
    Coca-Cola Amital (CCA)
     
  3. Steve

    Steve Well-Known Member

    Joined:
    8th Dec, 2006
    Posts:
    97
    Location:
    Sydney, NSW
    Cab Charge
    Westfield
    Sigma
    Cochlear
    CSL
     
    Last edited by a moderator: 24th May, 2007
  4. Glebe

    Glebe Well-Known Member

    Joined:
    15th Aug, 2005
    Posts:
    932
    Location:
    Sydney, NSW
    Macquarie Airports trust (MAP).
     
  5. tropic

    tropic Well-Known Member

    Joined:
    13th Sep, 2006
    Posts:
    131
    Location:
    WA
    I think ASX fits the theory, it's a monopoly and a high entry level for competitor. Buffet also believe in buying stock at a good price.
     
  6. bundy1964

    bundy1964 Well-Known Member

    Joined:
    22nd Dec, 2006
    Posts:
    351
    Location:
    Adelaide, SA
    I would add

    CPU
    PPT
    RIO & BHP
    TOL
    CTX
    TLS
    AMP
    BLD
    JHX
    HIL

    I also like the combo of SUN, IAG and QBE.

    I am a bank, insurance and retail junkie though.

    Not making the cut are GUD, FGL and LNN.
     
  7. Insight

    Insight Brisbane Buyers Agent

    Joined:
    24th Sep, 2006
    Posts:
    229
    Location:
    Brisbane
  8. Simon

    Simon Well-Known Member

    Joined:
    17th Sep, 2005
    Posts:
    520
    Location:
    Newcastle
    I am actually going to see him speak at a presentation this week. I also offered to take them for a drink afterwards so hopefully I will be able to really learn from them.

    But Clime does sound like something worth following up.
     
  9. Rod_WA

    Rod_WA Well-Known Member

    Joined:
    18th May, 2007
    Posts:
    324
    Location:
    Inglewood, WA
    Regarding Clime -
    One of their main value choices is The Reject Shop.
    But I struggle to invest in a retail chain that I would never step into... but that's just me.
    Roger Montgomery seems to be the Everywhere Man at the moment - he even popped up on Four Corners tonight - I think he's a very good self-promoter. Maybe he wants to be the next Kerr Neilson?
     
  10. Steve

    Steve Well-Known Member

    Joined:
    8th Dec, 2006
    Posts:
    97
    Location:
    Sydney, NSW
    Normally I would agree with including MAP, however, concerns have started to surface regarding Macquarie and its off-shoots.

    See PM - Investor questions Mac Bank strategy

    Is Macquarie's strategy of buying assets and throwing them into a fund sustainable? Maybe, maybe not...

    Steve
     
  11. Simon

    Simon Well-Known Member

    Joined:
    17th Sep, 2005
    Posts:
    520
    Location:
    Newcastle
    Unfortunately I couldn't make it due to an unexpected family emergency.

    Did anyone from here attend and can provide a few points from Mr Montgomery?
     
  12. Rod_WA

    Rod_WA Well-Known Member

    Joined:
    18th May, 2007
    Posts:
    324
    Location:
    Inglewood, WA
    I went to the 'Value Investing' talk in Perth a few weeks back. The Clime message is a mix of "We have a better valuation model that leads us to find exceptional value in the share market" (ASX-listed only), and "We have a lovely tool called StockVal that helps us do it, and you can use it too (fine print: for $1500 a year...)"

    Like I said above, Roger M seems to be a very shrewd marketer - he has a persuasive style that demands you listen. Now StockVal is undoubtedly a very powerful tool that allows company performance to be scrutinised, but looking for value going forward, StockVal is only as good as the forecast performance entered.

    Now I won't claim that my forecasting is better than anyone else's. Can Clime?
    (Of course, RM has significantly more experience in this than me, and furthermore Clime have a team of people doing the analysis; but isn't that what all fund managers do?)

    But! The Clime 'Performance' portfolio has shown some very nice recent returns (although it took a bit of time to get started... 0% June '04 - June '05, but 70% April '05 to April '07). So they're doing something right.

    By the way, Clime Capital ASX code is CAM. Some attractive recent dividends (incl specials, these will need to be looked into further).
     
  13. Rod_WA

    Rod_WA Well-Known Member

    Joined:
    18th May, 2007
    Posts:
    324
    Location:
    Inglewood, WA
    I should add:

    One thing that RM said was that the market is the guy sitting next to you... meaning that there is no significant effect of market advantage. Unlike the horse races, I suppose...

    That is, you have as much chance at finding value as the next guy, and that the ASX is just a meeting house for investors and punters alike. I guess the message is to ignore momentum and search for value, and exploit the momentum and buy when it pushes price below value, and sell when the fundamentals break down (RM is an advocate of buy and hold, but an unemotional seller if the incremental ROE starts going south or management get carried away with themselves).
     
  14. Glebe

    Glebe Well-Known Member

    Joined:
    15th Aug, 2005
    Posts:
    932
    Location:
    Sydney, NSW
    Isn't CAM trading at a PE of 9-10 or so, whereas Platinum is in the high 20's? I find that interesting...