{"id":4882,"date":"2023-09-13T11:17:01","date_gmt":"2023-09-13T00:47:01","guid":{"rendered":"https:\/\/strawman.com\/blog\/?p=4882"},"modified":"2023-09-13T11:17:02","modified_gmt":"2023-09-13T00:47:02","slug":"hairy-businesses","status":"publish","type":"post","link":"https:\/\/strawman.com\/blog\/hairy-businesses\/","title":{"rendered":"Hairy Businesses"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Every business, no matter how wonderful, has a few hairs on it. And if you don&#8217;t think that&#8217;s true, it&#8217;s only because you haven&#8217;t looked hard enough.<\/p>\n\n\n\n<p>But some hairs are, well,&nbsp;<em>hairier<\/em>&nbsp;than others.&nbsp;<\/p>\n\n\n\n<p>It&#8217;s not ideal to see the CEO of one of your favourite companies sell shares right before an opportunistic capital raise, but that may be more palatable than selling $17 million worth of shares during an ACCC investigation. (No names mentioned, of course&#8230;)<\/p>\n\n\n\n<p>As an investor, you certainly need to draw the line somewhere. But if you hold companies and their executives to too high a standard you&#8217;ll never invest in anything. It&#8217;s about ensuring any negatives are not too egregious, and more than offset by the positives.<\/p>\n\n\n\n<p>At the same time, companies that are squeaky clean, with loads of positives can still end up being ordinary investments. The reason being is that the market is often (but not always) aware of all the good stuff,&nbsp;and has&nbsp;priced it in.<\/p>\n\n\n\n<p>As Charlie Munger says,&nbsp;<em>no matter how wonderful [a business] is, it&#8217;s not worth an infinite price<\/em>.<\/p>\n\n\n\n<p>Ironically, sometimes companies with lots of hairs can &#8212; occasionally &#8212; be exceptional investments. Just as the market can unreasonably bid up great businesses, it can also unfairly discount the less appealing ones.&nbsp;<\/p>\n\n\n\n<p><strong>Telstra&nbsp;<\/strong>(ASX:TLS), whose earnings have been steadily on the wane for years, has provided a 40% return for investors over the last 3 years &#8212;&nbsp;<em>before<\/em>&nbsp;dividends.&nbsp;<strong>Myer<\/strong>&nbsp;(ASX:MYR), which is a shadow of its former self, has seen it&#8217;s shares nearly triple in the same period.<\/p>\n\n\n\n<p>Many would argue that companies like&nbsp;<strong>CSL<\/strong>&nbsp;(ASX:CSL),&nbsp;<strong>Objective Corp<\/strong>&nbsp;(ASX:OCL) &amp;&nbsp;<strong>Xero<\/strong>&nbsp;(ASX:XRO) are far superior organisations, but all of these have seriously underperformed Telstra and Myers since 2020.<\/p>\n\n\n\n<p>The point is, perfect can be the enemy of the good. And even the good can be bad if the price isn&#8217;t right.<\/p>\n\n\n\n<p>Investing is hard. <\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<p class=\"has-text-color has-background has-normal-font-size has-very-dark-gray-color has-very-light-gray-background-color\"><em>Strawman is Australia\u2019s premier online investment club. <br>Members share research &amp; recommendations on ASX-listed stocks by managing Virtual Portfolios and building Company Reports. By ranking content according to performance and community endorsement, Strawman provides accountable and peer-reviewed investment insights. <\/em> <\/p>\n\n\n\n<div class=\"wp-block-button aligncenter\"><a class=\"wp-block-button__link has-text-color has-very-light-gray-color has-background has-tertiary-background-color\" href=\"https:\/\/strawman.com\/member\/landing\/signup\"> Create your FREE Strawman account<\/a><\/div>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p class=\"has-text-color has-cyan-bluish-gray-color\"><em><strong>Disclaimer\u2013<\/strong> Strawman is not a broker and you cannot purchase shares through the platform. All trades on Strawman use play money and are intended only as a tool to gain experience and have fun. No content on Strawman should be considered an inducement to to buy or sell real world financial securities, and you should seek professional advice before making any investment decisions<\/em>.<\/p>\n\n\n\n<p class=\"has-text-color has-text-align-center has-cyan-bluish-gray-color\">\u00a9 2023 Strawman Pty Ltd. All rights reserved.<\/p>\n\n\n\n<p class=\"has-text-align-center\">| <a href=\"https:\/\/strawman.com\/member\/landing\/privacy\">Privacy Policy<\/a>&nbsp;|&nbsp;<a href=\"https:\/\/strawman.com\/member\/landing\/terms\">Terms of Service<\/a> | <\/p>\n\n\n\n<p class=\"has-text-color has-text-align-center has-cyan-bluish-gray-color\">ACN: 610 908 211 <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Every business, no matter how wonderful, has a few hairs on it. And if you don&#8217;t think that&#8217;s true, it&#8217;s only because you haven&#8217;t looked hard enough. But some hairs are, well,&nbsp;hairier&nbsp;than others.&nbsp; It&#8217;s not ideal to see the CEO of one of your favourite companies sell shares right before an opportunistic capital raise, but that may be more palatable [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":4884,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4882","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Hairy Businesses - Strawman Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/strawman.com\/blog\/hairy-businesses\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Hairy Businesses - Strawman Blog\" \/>\n<meta property=\"og:description\" content=\"Every business, no matter how wonderful, has a few hairs on it. 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