I have been thinking about taking a position in Smart Parking for the last couple of months. I think among private investors looking to beat the market via small cap stocks it has been a bit of a darling in 2024. The management seem reasoanble and its financials are pretty solid. I found the presentations on Strawman quite insightful in this regard.

But there was just something that was gnawing at the back of my mind about this company and why I couldn't pull the trigger on it. This will sound absurd, but I think my reservations about this company are that I just philosophically don't like the business model, it is essentially collecting fines for various companies. And I understand the other side to that equation, for society to function car spots have to be available. Imposing restrictions and fines on people is about as strong an incentive as it gets to have people move their parked car. But I couldn't shake the inherent prejudice (or bias whichever way you want to look at it) I had for the underlying philosophy of the business. Maybe it's because I'm the kind of guy that (irrationally) likes to drive around for additional 5 minutes in order to avoid paying for parking in the first place, I don't know.

But then I had another thought.

I am not a professional investor. I am private individual that invests the majority of my real life funds in index funds. To the extent I am investing in individual stocks, and small caps at that, I am really playing a much riskier game. And in order for the risks I take to be worth it, the pay-off has to be significant. And as my Dad used to say, "the only rich guy I ever knew told me one thing, you get rich slowly, son". And so the time horizon for those significant profits to materalise is going to be decades. When you broaden out your time horizon, the financials of the business are important. The daily charts have a place, I am not knocking technical analysis or even short-term fundamental analysis. But implicit in your investment is an overall thesis about where society and the particular sector you are investing into is going. This is why I have come to believe that investing requires a large degree of humility to admit that luck plays a significant role as nobody can predict the future.

And as Lenin said, "there are decades where nothin happens and week where decades happen". And so the question I have about this business, particularly if it's based in UK cities, is whether the use of carparks is going to increase overtime. I have been (and remain to be fair) very sceptical about the driverless car movement. But in recent weeks, you'd have to have been living under a rock to not see the prevalance of these things increasing. My instagram feed is full of people I know test driving these cars in the US etc. And while I will support arguments about people always wanting to own their own car, their specific car and needing to park etc. I do feel investing in something as simple as car par collection fees for the long-term is asking for trouble. That's not to say people won't see decent capital returns in the next 2-5 years potentially and so if that's your time horizon, who am I to stop you. But if you are more of the 'coffee can', 20+ year time horizon investor, I would question whether this business is for you.

For those reasons I've held off investing even though the fundamentals and the short-term looks to be pretty positive.