Comments on: Profiting from Fear http://www.fwallstreet.com/article/191-profiting-from-fear Value Investing Blog Thu, 09 Sep 2010 02:28:59 -0500 http://wordpress.org/?v=2.9.2 hourly 1 By: Joe Ponzio http://www.fwallstreet.com/article/191-profiting-from-fear#comment-3251 Joe Ponzio Fri, 23 Apr 2010 06:16:58 +0000 http://www.fwallstreet.com/article/191-profiting-from-fear#comment-3251 I haven't purchased or sold a single share of it. The economy and businesses have improved dramatically since last year, and I have no reason to believe that VOL hasn't improved along with them. In addition, I have friends that run similar companies (privately) and know that their private companies have improved much over the past year; so, I have no reason to believe VOL hasn't improved or at least held steady. Their financials have not been filed as they reclassify a small amount of revenue from a number of years ago. They can't possibly issue truly audited, reliable financial statements until that issue is resolved. I don't know that it's possible to value VOL to buy (or add to) it today; however, I believe that it's okay to hold it if you bought it at a discount and have a reason to suspect that the business has improved. I haven’t purchased or sold a single share of it. The economy and businesses have improved dramatically since last year, and I have no reason to believe that VOL hasn’t improved along with them. In addition, I have friends that run similar companies (privately) and know that their private companies have improved much over the past year; so, I have no reason to believe VOL hasn’t improved or at least held steady.

Their financials have not been filed as they reclassify a small amount of revenue from a number of years ago. They can’t possibly issue truly audited, reliable financial statements until that issue is resolved.

I don’t know that it’s possible to value VOL to buy (or add to) it today; however, I believe that it’s okay to hold it if you bought it at a discount and have a reason to suspect that the business has improved.

]]> By: Larry Chow http://www.fwallstreet.com/article/191-profiting-from-fear#comment-3222 Larry Chow Mon, 05 Apr 2010 09:02:55 +0000 http://www.fwallstreet.com/article/191-profiting-from-fear#comment-3222 Joe, How do you feel about this investment given that the company has not released any financials for almost a year now? Is it possible to value VOL currently based on a quarterly report from last May? Joe,

How do you feel about this investment given that the company has not released any financials for almost a year now? Is it possible to value VOL currently based on a quarterly report from last May?

]]> By: AWF http://www.fwallstreet.com/article/191-profiting-from-fear#comment-3140 AWF Tue, 05 Jan 2010 10:45:53 +0000 http://www.fwallstreet.com/article/191-profiting-from-fear#comment-3140 As a MarketMinder.com contributor, I often hear this viewpoint. Recently, we published our take on this: <a href="http://www.marketminder.com/a/fisher-investments-fisher-investments-looks-ahead/1b82d65f-99cd-451b-8e3e-ada35b64e14a.aspx" title="http://www.marketminder.com/a/fisher-investments-fisher-investments-looks-ahead/1b82d65f-99cd-451b-8e3e-ada35b64e14a.aspx" target="blank" rel="nofollow">http://www.marketminder.c...</a> As a MarketMinder.com contributor, I often hear this viewpoint. Recently, we published our take on this: http://www.marketminder.c...

]]> By: SHM http://www.fwallstreet.com/article/191-profiting-from-fear#comment-3138 SHM Mon, 04 Jan 2010 21:11:17 +0000 http://www.fwallstreet.com/article/191-profiting-from-fear#comment-3138 Hi, I am confused with the numbers that have been used in your analysis. Looking at the latest 10-Q which is dated on April of 2009, the Current Asset of that period is about 628.2 Million Dollars. The only number close to your 633.8 million current asset is from the 10-Q dated in January of 2009 which was about 633.5 million. Is there a reason for using this number and/or has there been something that I am not taking into account? Also, regarding the total liabilities, it is shown in the April 2009 10-Q to be that of 428.6 million. Why have you used 411.2 million in your calculation rather than the total liability in the 10-Q? Thank you very much and I hope to learn something new soon. -SHM Hi, I am confused with the numbers that have been used in your analysis. Looking at the latest 10-Q which is dated on April of 2009, the Current Asset of that period is about 628.2 Million Dollars. The only number close to your 633.8 million current asset is from the 10-Q dated in January of 2009 which was about 633.5 million. Is there a reason for using this number and/or has there been something that I am not taking into account?

Also, regarding the total liabilities, it is shown in the April 2009 10-Q to be that of 428.6 million. Why have you used 411.2 million in your calculation rather than the total liability in the 10-Q?

Thank you very much and I hope to learn something new soon.

-SHM

]]> By: Adam Davis http://www.fwallstreet.com/article/191-profiting-from-fear#comment-3129 Adam Davis Wed, 30 Dec 2009 03:14:50 +0000 http://www.fwallstreet.com/article/191-profiting-from-fear#comment-3129 Interesting look at the net-nets in energy with cash spillovers - sort of like what Wayne Gretzky said when "he skated to where the puck was going to be instead of where it was." That could be a good way to look for some net-nets as the panic seems to have left the market for now. I grabbed two net-nets of note in 09: VXGN and MATH. Got about as much of a puff as I could out of them and then threw the soggy butts away. Interesting look at the net-nets in energy with cash spillovers – sort of like what Wayne Gretzky said when “he skated to where the puck was going to be instead of where it was.”

That could be a good way to look for some net-nets as the panic seems to have left the market for now.

I grabbed two net-nets of note in 09: VXGN and MATH. Got about as much of a puff as I could out of them and then threw the soggy butts away.

]]> By: Joe Ponzio http://www.fwallstreet.com/article/191-profiting-from-fear#comment-3115 Joe Ponzio Sat, 19 Dec 2009 06:00:11 +0000 http://www.fwallstreet.com/article/191-profiting-from-fear#comment-3115 We own a few. Volt, and then two in the energy sector (BBEP and PETD) which were more "future net-nets" – companies that were trading for slightly less than book value, but that would likely experience a surge in cash flows and asset values when natural gas rebounded from its panic lows. We own a few. Volt, and then two in the energy sector (BBEP and PETD) which were more “future net-nets” – companies that were trading for slightly less than book value, but that would likely experience a surge in cash flows and asset values when natural gas rebounded from its panic lows.

]]> By: Joe Ponzio http://www.fwallstreet.com/article/191-profiting-from-fear#comment-3114 Joe Ponzio Sat, 19 Dec 2009 05:58:27 +0000 http://www.fwallstreet.com/article/191-profiting-from-fear#comment-3114 SHRP and VOL were two very different opportunities. (For the record, we never bought SHRP – I simply said it might be worth exploring.) VOL has (in my opinion) much better asset quality, is not burning through cash like SHRP was, and is not as sensitive to a weary consumer as SHRP was. That said, if an investment goes south, you simply get back on your horse. Over the long-term, this stuff works. SHRP and VOL were two very different opportunities. (For the record, we never bought SHRP – I simply said it might be worth exploring.)

VOL has (in my opinion) much better asset quality, is not burning through cash like SHRP was, and is not as sensitive to a weary consumer as SHRP was.

That said, if an investment goes south, you simply get back on your horse. Over the long-term, this stuff works.

]]> By: Joe Ponzio http://www.fwallstreet.com/article/191-profiting-from-fear#comment-3113 Joe Ponzio Sat, 19 Dec 2009 05:54:54 +0000 http://www.fwallstreet.com/article/191-profiting-from-fear#comment-3113 I think an investor can have both in his/her portfolio. Keep in mind that I think most people should not own stocks. Those that do should primarily own wonderful businesses at good prices. If, however, your job is to find undervalued businesses, you can incorporate some cigar butts as well. Buffett has said that, if he were running $1 million, he'd be doing things drastically differently. With his/their portfolio, they have no choice – buy quality and hang on. I think an investor can have both in his/her portfolio. Keep in mind that I think most people should not own stocks. Those that do should primarily own wonderful businesses at good prices. If, however, your job is to find undervalued businesses, you can incorporate some cigar butts as well.

Buffett has said that, if he were running $1 million, he’d be doing things drastically differently. With his/their portfolio, they have no choice – buy quality and hang on.

]]> By: Joe Ponzio http://www.fwallstreet.com/article/191-profiting-from-fear#comment-3112 Joe Ponzio Sat, 19 Dec 2009 05:50:07 +0000 http://www.fwallstreet.com/article/191-profiting-from-fear#comment-3112 Yes. Owner earnings tell the story of cash burn from operations. Yes. Owner earnings tell the story of cash burn from operations.

]]> By: Joe Ponzio http://www.fwallstreet.com/article/191-profiting-from-fear#comment-3111 Joe Ponzio Sat, 19 Dec 2009 05:48:38 +0000 http://www.fwallstreet.com/article/191-profiting-from-fear#comment-3111 I've thought about starting a mutual fund, but the problem is the constant inflows and outflows of capital from non-long-term investors, which can hurt the performance of our long-term investors. At <a href="http://www.ponziocapital.com/" title="Ponzio Capital">Ponzio Capital</a>, clients can (and do) invest along side me through separate accounts. The only reason we have a $20,000 minimum is because I assume all of the trading and custody costs, which costs me about $120 per year. Even though our fees are some of the lowest in the business (0.25% per quarter, $75 min.) on non-performance-only accounts, that minimum fee would be too high to overcome on a $5,000 or $10,000 account (6% or 3% per year, respectively). I’ve thought about starting a mutual fund, but the problem is the constant inflows and outflows of capital from non-long-term investors, which can hurt the performance of our long-term investors.

At Ponzio Capital, clients can (and do) invest along side me through separate accounts. The only reason we have a $20,000 minimum is because I assume all of the trading and custody costs, which costs me about $120 per year.

Even though our fees are some of the lowest in the business (0.25% per quarter, $75 min.) on non-performance-only accounts, that minimum fee would be too high to overcome on a $5,000 or $10,000 account (6% or 3% per year, respectively).

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