Forum Topics Redbubble Ltd General Discussion
doktorspleen
2 weeks ago

@Noicewon great analysis on RBL! I really liked the valuation, especially the probability weightings for the IV. Great stuff!. Just had one comment:

Most of your numbers for the scenarios came from the CEO's projections, is it worth including "underperformance" figures in case covid was a true one-off for them? I feel like there may have been some numbers/scenarios that could be generated from Neke's thread on Twitter for a bear investment case?

 

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Noicewon11
2 weeks ago

Thanks for the feedback!

I 100% agree with your point. I did cover a "worst case scenario" as you would have seen in the analysis, allowing 5% for a chance that the stock halves from today, but to your point I didn't include analysis on the revenues not reaching the 1.25bn target.

So I guess in some sense it is covered (i.e if the target is not met, the stock may end up at $2 is ~500mill MC).

I will review my valuation & make update(s) accordingly.

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Chalky1610
3 weeks ago

Anyone who is not familiar with Andrew Page (Strawman) or who has never listened to strawman present, may well do themselves a significant favour and listen strawman speak in how to become a better investor.  I present to you the link is below. One thing that strawman does say reflects on the benefits of belonging to stock clubs such as strawman where ideas and discussions can be had to make us all better investors. One of those advantages is to challenge each other on the companies that we present whether that be bull or bear case. All professional investors have managed to become successful and regardless as to who they are all should be listen to with aim to learn. 

https://www.youtube.com/watch?v=RtWOJ7kkFTA

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Strawman
3 weeks ago

Thanks @Chalky1610

Amazing to think we had only passed 5,000 members back then. We're ~18,000 strong now, and the Strawman Index is still holding up really well!

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Samurai
3 weeks ago

Id say RBL is in the process of finding a bottom around the $3-4~ area, I've bought more shares at low $4~ range and I believe once a base is found the next long term move will be a parabolic one of that which many won't believe until after the fact.

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Chalky1610
4 weeks ago

Kochie asked his guests, Jun Bei Liu from Tribeca Investment Partners and Adam Dawes from Shaw and Partners, what they think of the update and RBL's investment potential. Jun Bei says she likes the company structurally for a long-term investment."Redbubble is global and 70% of its business comes from the US. There's a lot of room to grow and it makes the highest margins."I wouldn't be buying today as the share price is perhaps not going to rally but Redbubble is the one I would be looking to build my position in."Adam says there are a couple of factors that investors need to be careful of."It's going to uplift the marketing spend by 12-15% which will be an earnings drag."It's a hold for me - I want to see its half-year results. This is a growth business but the expectation of the business was a lot higher - hence we've seen this fall in the share price."

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Noddy74
3 weeks ago

I wouldn't put too much credence in Jun Bei and Adam's views, particularly at the smaller end of the market.  They were also asked about Shriro to which they said it's a mini Breville so why wouldn't you put you're money in that instead?  Well, for one thing it's not a mini Breville.  More importantly Breville is on a trailing PE of 74 - Shriro's is 5! 

Having said that I hold RBL and think the market reaction was way overs.  The CEO laid down some very clear KPIs for the next four years so I will continue to hold while they stay on track to meet these and the thesis continues to hold.

(Disc: Held - Shriro too]

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Noicewon11
3 weeks ago

@Noddy74.

 

Completely agree mate.

I've been listening to the 'experts' on 'The Call' for over a year now. Over that time period I've come to learn that some of these experts love recommendations or comments on stocks that they often know nothing about. (Which is not necessarily their fault as the stock picks are submitted by listeners).

I.e one guest came onto the show and exclaimed that SP3, a small company, should not be listed on the ASX for a bunch of reasons that made no sense. He openly admitted "I don't know much about this company" and then goes on to say it shouldnt be listed. Hmmmmmmmmmmm.

I do still listen to the show (depending on who's on the panel) because there are some incremental bits of information that I find useful to hear.

 

On the basis of @Chalky1610's recount of Adam Dawes' comment "It's going to uplift the marketing spend by 12-15%"; -

Well that's not even what was said by the RBL CEO in his letter to shareholders on Friday, so I'm not really bothered what his buy/hold/sell position is either.

 

 

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elpaso96
3 weeks ago

This will put me in hot water but stockbrokers like Adam Dawes are tools, they all know it. They know nothing about why a business is successful. Their definition of sucess is stock price going up... They are jack of all trades, they know a lot of information about any stock you ask, but if you ask this question point blank with a gun against their head "what are your 3 best picks for the next 5 years and you can't make changes during the next 5 years". You will see them panic. They essentially can't formulate a thesis if their life depended on it. Stockbrokers do not have to get the thesis right, all they need to do is win clients, put trades for them and retain them by looking at their risk profile. 

Jun Bei atleast makes an effort with her stock research and understand some of the fundamentals but she too either gets carried away with the story or believe she understand more than everyone else. She goes on about backing market leaders but for some reason back second tier players because of valuation? She is not consistent and to be frank unreliable. She is the last person to admit she gets the thesis wrong as she gives off the impression that she is right all the time. She is not right all the time otherwise why hasn't Tribecca Alpha plus fund generate over 20% p.a. Tribecca Alpha plus fund since inception (2006) delivered 9.47%. Therefore, there must have been mistakes made but she would not admit it otherwise it would damage the reputation. Maybe the excuses for under double digit performance would be higher AUM and the fund is still above the ASX/S&P200 benchmark. 

Best piece of advice is that these "experts" messed up big time during the covid crash. They did not predict it becoming a pandemic. The only one that predicted the Wuhan situation turning into a pandemic was Claude Walker :D You could see the interview between Matt Joass, Claude and Andrew Page (Strawman). Thanks to Youtube, everything is in record. Andrew was going on Pushpay and it did well after the crash. You did not see JunBei and Adam Dawes at Ausbiz for a while. They were MIA. They are not "experts" because actual experts have an in depth understanding of how the business generate revenues, cashflows, market segment, management and competitors.

If I were to classify experts from the call it would be only these guys plus our very own Strawman (Andrew Page)

  • Howard Coleman from Team Invest for stocks in his circle of competance (Flight Centre, CreditCorp, A2M, Nick Scali, JB Hifi, Wesfarmers, Accent Group).
  • Claude Walker, bit of a wild man but has a good understanding on tech valuations and small caps - he did pick Promedicus.
  • Rudy only for Large Caps like CSL or Macquarie Group (I won't ask him a single question on small caps as to him it is uninvestible. He gave IDP the tick of approval over Janison because they are larger and without understanding how Janison makes money :D).
  • Owen (please subscribe to Rask if you are time poor with investment research. Owen is an independant analyst who can pick winners and is putting the hard yards to find wealth winners for you).
  • Matt Joass (if you have quite a lot of money and need a really good fund manager to grow it, I would not hesitate to put on Maven Funds. Same mantra as Owen but with a defined process on catching monsters. He wrote a great blog on it).       

Most guests in the call focus on the share price which is useless as the share price should not form your thesis. The funniest moment was one time Francesco from Ord Minett was going on about why a particular stock was really bad, but an analyst from Ord Minnett had a buy rating :D So he literally had to backtrack everything he said otherwise he is telling the public that he does not trust Ord Minnett's analysis. That's why lately you see him check in his computer for an Ord Minnett analyst covering the stock before he gives his opinion. 

 

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Bear77
3 weeks ago

Good post elpaso96.  I would add Gaurav Sodhi to that list under "for stocks in his circle of competence".  When he HAS looked at a company properly, he often has some very useful things to add about that company, like IFT and GLB - both companies I bought after doing research after listening to Gaurav talk about them on "The Call".  I still hold IFT and I'm well up on them, having bought them before the Aware Super takeover bid (that didn't go through) caused them to be positively rerated by the market in December.  I've taken profits on GLB, and no longer hold them.  A little too hot for me up at over $5.50/share, which is where I sold.  However, like many other analysts (he's not from a broking firm, but from a subscription mob, Intelligent Investor), Gaurav can be very dismissive or critical of companies which he does NOT know well, which is a pity.  I prefer them to just say "Pass" when they don't know much about the company, and sometimes they do, but not often enough.

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Pattyboy
3 weeks ago

I agree @Elpaso,

I only listen to the call when a select few of the "experts" are on. 

I agree with your list for the most part, but I would also add that I personally think that Mathan and Gaurav are worth listening to. Very random, but Gaurav has such a chill sounding voice lol, I wouldn't even care if he didn't talk about stocks.

As you mentioned, I think some of the others just have a cursory glance on the company's Wikipedia page and know far less than they should. You can tell when this happens when Gary Glover is on - He'll just start talking about technical analysis and then compare to all the broker valuations...I just cannot see the value in it myself. 

I also don't agree with many of the team invest guys like Mark Moreland... He instantly will talk poorly about a particular stock if it's too expensive on traditional metrics like P/E and P/S as an example. I think these metrics are important, but you're going to throw away so many good investment ideas with that mindset in my opinion.

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Bear77
3 weeks ago

Yes Pattyboy, Mathan is cool too, particularly when he is on with Gaurav, but being a data guy, he's usually looking at the big picture, or trends, rather than at the nuts and bolts of individual companies.  That said, his list of "avoids" is often worth listening to.  And Mathan does occasionally shed some light on a company when he has done some work on it.  However, when the two of them are on, I find Gaurav provides about 80% of the value.

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elpaso96
3 weeks ago

@Bear 

Mathan claims to have insights with his analyticals like buy/sell when the broker changes rating. Soo far, it has been a lagging indicator and really not useful as the market predicts the outcome faster and more accurate than the indicator. Are there any other claims he is making, I really want to test his analytics because it is suppose to be ground breaking. Hard data is refuting the claim.  

To me the best thing Mathan can ever say about a company is the history when he was covering it. Those stories affect your perspective on whether management is stable, know what they are doing etc... His analytics, let's do more investigating to see whether his claims hold up in practice. I am very skeptical.  

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Noddy74
3 weeks ago

100% agree with you elpaso.  I was thinking The Call almost needs it's own straw but you've nailed it.  I even agree with you in regards to Howard Coleman - completely patronising and intolerant of other views but the Team Invest method does produce outpermormers in the longterm.  Their filters would preclude me investing in the same companies as they do but that doesn't mean I can't learn from him.  I would add to the mix Saurav Godhi and Mathan Somasundaram.  Saurav should be lesson for Francesco (who I respect but for his dogged towing the Ord Minett line).  Saurav will get on and say 'I haven't convinced Intelligent Investor of this but for me its a buy because...'.  Mathan is just a great analyst who distils the macro environment into micro stock picking.

I agree with you in regards to Claude and Rudi, there's this Andrew Page bloke who gets on once in a while - jury still out (joking).  I don't mind Henry Jenkins or Andrew Wielandt either.  After that it starts to get a bit a bit skinny...

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Bear77
3 weeks ago

Agree with most of what you say there @elpaso96 about Mathan, hence I said that when he and Gaurav are on together, 80% of the value comes from Gaurav.  What are your views on Gaurav Sodhi?

I particularly agree with you regarding the history of individual companies and their management being more interesting and relevant than his macro data analytics.  Mathan often reminds us of the poor history of some management teams that always manage to find more skeletons in closets, or have things go wrong on a regular basis (like QBE in prior years, and AMP, since, forever).  He has in the past also often pointed out that certain company CEOs/MDs make it a habit to continually underpromise and overdeliver.  I personally think that the market catches on to that eventually and then expects more than what management have promised, and then if they don't deliver substantially higher results than their guidance suggested then the company often gets sold down.  Examples of that include MQG, ARB, TNE, CSL and in the past also FLT, MND, NST and some others that have fallen from grace more lately.  Underpromsing and overdelivering is, in my opinion, the right thing to do, much better than doing the opposite anyway, however it doesn't always work forever.  Sometimes, it builds up an expectation that is beyond what is realistically deliverable.  As we saw with RBL's most recent quarterly results where the market was looking for far more than what they got, and appear to have made very little allowance for the seasonality of RBL's earnings in prior years.

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elpaso96
3 weeks ago

Actually forgot to include Michael Wayne - Medallion Financial. I really respect his in depth understanding of the businesses he follows as well businesses he does not follow. If you listen to him, he really understand how the business makes money and what the market is valuing. He has a lot of humility on things he does not know - that's why I respect Portfolio Managers like him.  

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Bear77
3 weeks ago

What about Gaurav @elpaso96?

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