No. of Recommendations: 17
Most days are spent doing two to four hours reading and looking up stuff including perusing stuff via my Value Line subscription and using the market data section of the Financial Times. Seeking Alpha subscription also provides interesting companies to look leading to doing the normal analysis of balance sheets and income statements over, say, a five year time frame. You should know we (my bride and I) sometimes go two or more years between investment purchases. It is a sitting on hands every day kind of thing for this coffee can investor.
It seems every time when looking through Value Line's weekly review report of small to medium sized companies, I leave with the assessment that most companies suck. They sell more stock as the years go by to raise funds. They are going nowhere in growing revenues. They are going nowhere in improving margins. Basically, to my eye they look like terrible investments.
While these types of companies are not my cup of tea, I do ponder the micro and macro aspects leading to why the vast predominance of public companies suck at being potential good long term investments. Could it be:
1) The world is so darn competitive, thus precluding most companies from making better margins?
2) Correlated with 1), few blue sky opportunities are available?
3) Private equity, big companies and venture firms bought all the small companies with good moats?
4) It has always been this way?
This rant is over. I'm back to my long running philosophy of knowing the only time this small fry investor has a leg up on Wall Street's fast buck shops, indexing aspects, large institutional investors and, of course, company insiders is when an industry segment is swooning or the more rare event when the entire market is going to pieces. The proverbial blood in the streets scenario when redemptions are happening and there is more money leaving the market than is coming into the market. When that next happens is anyone's guess. This is why we read, evaluate and sit on our hands. It is actually a quite enjoyable process.
All the best to my fellow small fry investors. If you have a similar story or maybe a completely different take, please speak up.
Uwharrie
