The Last Straw

Are The Bulls Back?

You don’t need us to tell you that it’s been a tough run for small caps over the past year or so. And the harsh truth is that much of the pain was well deserved. Things always look clearer with the benefit of hindsight, but there was never any good justification for a bunch of sub-scale, cash-burning, undifferentiated wannabees to […]

Strawman Custom Index Builder

We’re excited to reveal a new custom index builder for Strawman — one that will allow you to construct a performance index that is based on a specific subset of members. The default Strawman Index will, of course, remain unchanged. But the settings are somewhat arbitrary, and may not align with your preferences. To build your own index, navigate to the […]

The Power of Incentives

Charlie Munger once said “show me the incentive, and I’ll show you the outcome“.  A great example comes from 1860s, when the British contracted ship captains to transport convicts to our sunny shores. Back then, the survival rate of those poor souls was a miserable 40%. Human rights weren’t exactly a high priority, but most still felt that allowing 6 […]

Lessons from a 10-bagger

In June of 2015, shares in Objective Corp (ASX:OCL) — a much under-recognised compounding machine that provides software to government and enterprise customers — hit $2 per share. It was a record high following a staggering rally from just 20c a few years earlier.  This ‘ten-bagger’ was certainly assisted by improving revenue and gross profits, both of which had grown 25% over the […]

No one wins all the time

Between 2019 and 2020 Warren Buffett’s Berkshire Hathaway (NYSE:BRK) underperformed the S&P500 by 37%. It was one of the poorer periods of relative performance for the Oracle of Omaha, who was “burdened” with loads of cash and missed out on a lot of the boom in technology stocks. As you can see, Buffett regularly lags the broader index. And sometimes […]

Process Pays

“To invest successfully does not require a stratospheric IQ, unusual business insights, or inside information,” said Buffett in a foreword to Benjamin Graham’s The Intelligent Investor. “What’s needed is a sound intellectual framework for making decisions and the ability to keep emotions from corroding the framework.” According to uncle Warren, factors like habits, character and temperament are what matter most. “What […]

The Start Of Value

The concept of ‘value’ is core to investing. At one level, it’s a relatively straightforward idea, and one we intuitively understand. As investors, we are, essentially, trying to buy assets for less than what they are “really” worth. For us, the value is captured when the wider market recognises and corrects the mispricing. But there’s also value in something that is (somehow) perfectly […]

Valuation for beginners

Valuation is — or at least should be — at the core of any investment decision. Without a general idea of what a stock is ‘really’ worth, how can you know if the market is offering you good value? Defining the true, or intrinsic, value of a business is easy; it’s the discounted value of the cash that can be taken […]

Property Shenanigans

We’ve been a bit distracted at Strawman HQ this week due to an office relocation. More accurately, I got evicted and have been moving house. So apologies for the radio silence on Strawman. Having now relocated 7 times in nearly 11 years I’m pretty much a black belt in the art of the move. And believe you me, it really […]

What to look for this reporting season

Reporting season is always a great opportunity to help separate the signal (business fundamentals) from the noise (share prices). As companies start to drop their half-year results, it’s worth framing up what it is you’re looking for. How you do that will depend on the particular investment strategy you employ but, if you have a longer-term focus, here are a […]