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Old 08-23-2016, 08:45 AM   #21
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I would argue a couple of points.

Your goal is too generic, I hope you better define it.
How much money will it take to FIRE?
25-33x annual expenses, whatever they may be in 10-20 years. I cannot answer that question, since I do not know anything about future inflation, among other things. Which career will the kids choose? Will I have to support them through college? Will my parents need help in their old age? Etc., etc. For the time being, I'll focus on those things I can control: Earning, spending, saving, investing. And enjoying life.

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With such an important goal, why separate any money from that goal?
It's gonna be AT LEAST a 20-year journey to FI, probably a lot longer. I think I deserve some fun along the way. It's my money, I earned it myself, and I'll spend/save/invest it as I see fit.

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If this investment were part of your real money, is it the best way to get obtain your goal?
Again, you are repeating my own question: Under the circumstances, is this an attractive stock or not? I believe that, in order to find out the answer, one needs to analyze the financial statements of the company rather than just say "I wouldn't buy it, the stock price used to be higher" or "I wouldn't touch it, they cut the dividend".

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Is choosing a "cheap" stock a good idea, and if so, how?
I believe it is, yes. At the same time, I'm fully aware that this is a belief, not a scientific fact which I could mathematically prove. How you choose them? I believe that the stock markets do not always price equities correctly in the short run. IMO, the pendulum swings between irrational exuberance and unwarranted pessimism. This sometimes allows you to pick up a bargain. Identifying bargains requires comparing (a) price and (b) value.

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I think most posters here agree that DL is a cheap stock. I think they disagree with its chances of adequate returns.
That statement doesn't make sense to me. The word "cheap", to me, implies a low price relative to the underlying value. If the stock will not produce adequate returns, it is not cheap, but priced correctly. It might even be expensive!

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FWIW, I prefer to focus on companies that can experience exponential growth in new markets.
OK, so you are also a stock picker, but you believe in growth- over value stocks. Fair enough. How do you identify those companies who 'can experience exponential growth in new markets'? Also, are you familiar with the research on the performance of growth- vs. value investing?

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If the market cap is 1.6B euros, THAT IS THE SHAREHOLDER EQUITY. No more analysis required.
I respectfully disagree. That is the market price. 'Shareholders equity' is a defined term and means something else, namely the difference between total assets and total liabilities (Shareholders Equity).
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Old 08-23-2016, 09:08 AM   #22
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Cheap was your word as to what you look for in a stock. What future does this company have? What earnings growth?

I do not value what you refer to as shareholder equity. As an investor I can't pull any money out of the company saying it is my share of equity. My equity in a company is what the stock trades at. If you are able to ID situations that price goes up based on mispricing, so be it, good work.

If you really want to know what I do, send me a Private message please. I am not interested in publicity.

What you seem to be asking for overall is for someone to do some footwork investigating this company in depth and then to argue on the basis of their footwork. I have no interest in that exercise.

Why did you buy the company when it was 45% higher? Was there a value argument to make then? What was the shareholder equity then? What time frame did you give for the investment to work out? Did you really have a plan when you bought it?

How long have you used this play fun money concept? How has it performed relative to the overall market?
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Old 08-23-2016, 11:16 AM   #23
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What else could you do with this money instead? For instance, suppose for some reason you were prohibited from ever buying this stock. What would you do with the money?
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Old 08-23-2016, 01:45 PM   #24
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OK, but in order to evaluate that, wouldn't it make more sense to look at how much profit they (will) make and how big the share of the dividend is?

If I understand this correctly, the consensus estimate for net profits is around 1.00€/share, and the planned dividend is 0.28€/share.

Don't get me wrong, I do not want to hype the stock, and I'm fully aware that it's highly speculative. I'm just genuinely curious about the valuation.
What you're asking me to do is not something that I am comfortable as an individual investor in doing, and that is investing based on earnings projections. Looking into and attempting to project the future is the very definition of "speculation". Past is not determinant of future performance, but it's often a pretty good indicator. As a value investor, which I fully understand you may not be, this issue doesn't pass the sniff test of even a cursory evaluation and I would personally stay away.

You may do as you wish and trust your own instincts and evaluation. That's the name of the game.
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Old 08-23-2016, 01:56 PM   #25
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I missed the nugget where you already have a position in this stock. My advice to you would then be two-fold:

1) Re-evaluate the assumptions/conditions under which you bought the stock in the first place. If they still hold, then buying more indeed makes sense. If they don't, then you need to convince yourself that the new set of circumstances warrants purchase as a separate purchase, not based on old information.

2) Don't throw good money after bad. That is, don't buy more of a dog just because it's a cheaper dog.


I bought AAPL a while ago at a split adjusted price of $450/share. It subsequently dropped to $350 and I bought even more at $375 because it was a great company and it was a good value at the time. The $375 purchase has out-paced the SP500 substantially. The $450 purchase has not. So price matters, but it's not the only thing that matters as you know!
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Old 08-24-2016, 01:39 AM   #26
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What you seem to be asking for overall is for someone to do some footwork investigating this company in depth and then to argue on the basis of their footwork.
You don't say. What tipped you off -the title of the thread ("Help me evaluate this investment")? The sentence "If anybody enjoys this kind of exercise, I would be glad if you shared some insights"? The fact that I linked financial statements?

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[...] I have no interest in that exercise. [...]
Wait a second, let me get that straight. So what you are saying is, you come here with a list of questions the size of the SAT test, and after I dutifully work through all of them in great detail, you tell me that you never had any intention to provide some useful input of your own? That's incredibly rude.

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My equity in a company is what the stock trades at.
You have every right to dream up your own reality, but I'm not going to argue with somebody who does not understand the difference between market cap and book value. Good day.
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Old 08-24-2016, 01:59 AM   #27
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What you're asking me to do is not something that I am comfortable as an individual investor in doing, and that is investing based on earnings projections.
Thanks for your two posts nash. I'm still trying to wrap my head around the above sentence. What else than a projection of the future would you base an investment decision on? The past is already priced in, isn't it?

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Looking into and attempting to project the future is the very definition of "speculation".
I probably shouldn't even argue that point, because I fully agree that DL is currently a speculative buy. Still, I think this is too narrow. Wikipedia defines speculation as "the purchase of a good with the hope that it will become more valuable at a future date". And according to Ben Graham in The Intelligent Investor, "some speculation is necessary and unavoidable, for in many common-stock situations, there are substantial possibilities of both profit and loss, and the risks therein must be assumed by someone."

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As a value investor, which I fully understand you may not be, this issue doesn't pass the sniff test of even a cursory evaluation and I would personally stay away.
What measures, in your opinion, should a value investor look at, and what are the criteria to judge them? Is it P/E<x , P/B<y and so on, or something entirely different?
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Old 08-24-2016, 02:52 AM   #28
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You don't say. What tipped you off -the title of the thread ("Help me evaluate this investment")? The sentence "If anybody enjoys this kind of exercise, I would be glad if you shared some insights"? The fact that I linked financial statements?
Wait a second, let me get that straight. So what you are saying is, you come here with a list of questions the size of the SAT test, and after I dutifully work through all of them in great detail, you tell me that you never had any intention to provide some useful input of your own? That's incredibly rude.
You have every right to dream up your own reality, but I'm not going to argue with somebody who does not understand the difference between market cap and book value. Good day.
He he he...gotta say RISP your responses made me laugh!
I mean I know nothing about what you are asking, which is why I haven't commented or contributed......
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Old 08-24-2016, 03:13 AM   #29
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Doing what you want is unreasonable.

A simple analogy or comparison. I am out shopping at a mass retailer and a total stranger asks for help car shopping, lists a few simple things about the car they like. Am I going to go to the car lot to look at the car, drive the car, read the literature, thoughtfully consider the appropriateness of the car for myself or for them? No.

Now if this stranger and I are in the checkout line, perhaps we might casually converse about such a thing. But if the stranger that has asked for help has a counter argument for every point raised and is upset I won't go kick the tires on their car consideration, I might stop engaging in conversation and perhaps even switch lines.
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Old 08-24-2016, 05:05 AM   #30
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He he he...gotta say RISP your responses made me laugh!
Thanks, then not all was in vain.
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Old 08-24-2016, 05:26 AM   #31
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Doing what you want is unreasonable.

A simple analogy or comparison. I am out shopping at a mass retailer and a total stranger asks for help car shopping, lists a few simple things about the car they like. Am I going to go to the car lot to look at the car, drive the car, read the literature, thoughtfully consider the appropriateness of the car for myself or for them? No.

Now if this stranger and I are in the checkout line, perhaps we might casually converse about such a thing. But if the stranger that has asked for help has a counter argument for every point raised and is upset I won't go kick the tires on their car consideration, I might stop engaging in conversation and perhaps even switch lines.
Trust me, I'm much more amused than upset.

I didn't ask you specifically; I posted a polite request in an online discussion forum literally called "Stock Picking and Market Strategy". To stay in your analogy, I held up a sign asking for help near the check-out cashier. At a podium discussion about cars, not a mass retailer, by the way.
Now, telling the stranger with the sign "no thanks" is perfectly fine.
Walking by them ignoring them is perfectly fine (about 99.96% of the members on this board choose that option by just not posting in this thread).
Engaging the stranger in a conversation, asking them a ton of questions, and then AFTER THEY JUMP THROUGH ALL YOUR HOOPS telling them "f*ck you and your stupid sign, I never wanted to help you in the first place" is, in my humble opinion, inappropriate.

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I might stop engaging in conversation and perhaps even switch lines.
I would be really grateful if you could just do that.
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Old 08-24-2016, 05:31 AM   #32
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What else could you do with this money instead? For instance, suppose for some reason you were prohibited from ever buying this stock. What would you do with the money?
Just noticed that I have not replied to your post yet, sorry. It's in the fun money account, so I'd say hookers and blow.

No seriously, I would of course look for some other stock to buy. But if we go down that slippery slope, we need to analyze and compare SEVERAL investments. Given the results so far, what's the chance of that ever happening?
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Old 08-25-2016, 10:14 PM   #33
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I don't investing in anything under $5 a share and this is only trading about 800 shares a day . So if I was to buy it I'd be the only one buying. Do you know why it can't cost $5?
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Old 08-26-2016, 05:27 PM   #34
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Making this as clear as possible. I just got caught by a thinly traded exchange traded fund which delisted 2 days ago and I was trying to figure out why it didn't sell since it met my limit order. I discovered it Dlisted when I was attempting to reenter that sell limit order. In addition to not trading anything that trades under $5 a share I am now instituting a personal policy where I will not trade anything that is as thinly traded as this stock or the one of mine traded thst thinly after I stopped watching it and Dlisted. I advise you to do similar. Although the $400 that you would stick into this is basically the cost of a large dinner out.
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Old 08-27-2016, 10:27 PM   #35
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Thanks for your two posts nash. I'm still trying to wrap my head around the above sentence. What else than a projection of the future would you base an investment decision on? The past is already priced in, isn't it?





I probably shouldn't even argue that point, because I fully agree that DL is currently a speculative buy. Still, I think this is too narrow. Wikipedia defines speculation as "the purchase of a good with the hope that it will become more valuable at a future date". And according to Ben Graham in The Intelligent Investor, "some speculation is necessary and unavoidable, for in many common-stock situations, there are substantial possibilities of both profit and loss, and the risks therein must be assumed by someone."





What measures, in your opinion, should a value investor look at, and what are the criteria to judge them? Is it P/E<x , P/B<y and so on, or something entirely different?
Sure, PE is a metric to look at to help determine value. I typically stay away from smaller stocks in the individual realm. Things I look at are very Grahamian: market cap, dividend payment, debt to assets, etc. Key also is: Do I understand enough about how these guys make their money? Does their risk statement make sense and do I understand the factors affecting their business?

In the case of the company you asked for analysis, I've provided one simple go-no-go: the recent stop and start of the dividend, and particularly starting at a rate which seems unwarranted and unsustainable to me on first glance.

Others: Market cap is too small. Earnings record - yes, I'd rather look at that than analyst projections, not understanding the business... There may be others, I didn't dig terribly deep into it after a cursory look.

Hope that helps explain.
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Old 08-27-2016, 10:29 PM   #36
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I should say, PE based on historical earnings, not earnings projections, is valid IMO.
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Old 10-05-2016, 01:36 AM   #37
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Time for a quick update! Delta Lloyd climbed steadily to around 4.10€ over the last weeks, also paying a 0.10€ interim dividend in September, which I took in stocks rather than cash. This morning, Dutch insurer NN Group announced a plan to take over Delta Lloyd, offering 5.30€ per share.

The stock is currently trading at 5.34€, an increase of ~58% since I started this thread (including dividends). I'm feeling pretty smart right now.
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Old 10-05-2016, 10:54 AM   #38
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I'm glad it is working out for you!
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Old 02-07-2017, 02:45 AM   #39
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Update: NN Group have increased their takeover offer to 5.40€ per share, which I accepted today.
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