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Value Investing: Your list of companies with durable competitve advantage.

Bino · 59 · 9134

Bino

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Hello gurus. I had been reading books about Warren Buffett and allot of times nababanggit na companies with durable compatitive advantage are the ones that Warren invests with. Based on your investments ano ang mga companies na para sa inyo ay may durable competitive advantage?

Thanks.
« Last Edit: Sep 01, 2014, 03:17 PM by FutureGizmo »


robot.sonic

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Kahit naman di guru pwede naman siguro sumagot. :D

palagay ko isa dyan ang MER.


Market_Market

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TEL & GLO since walang kaagaw?
hahaha


kontraktorr

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For me yung halos monopolized ang market... MER, MWC, TEL, SMPH. Ok din ang holding companies like SM, AC, AEV, JGC, MPI. Di na matitibag mga yan.


lemreyes

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Companies that have long-term competitive advantage have business moats.  Rule#1 states five moats (based on Buffett's): price, brand, secrets, switching, toll.  The more moats that a company have, the better its competitive advantage. 

In the Philippine setting, here are businesses that I have found which have moats.

Brand: URC (who doesn't love Jack & Jill snacks?), JFC, AMC (milk, too bad its delisted), SMB (beer!!!, suspended due to float),
SMPH (they put a building that looks like a box somewhere in a sparsely populated area and a mini-city grows near it over time), ALI

Price: Can't really seem to find a low cost producer from my research, or I'm just not able to identify a price advantage.  But those companies above (URC, SMB) also are the benchmark for pricing in their industries.

Secrets: EDC (they have extensive experience in drilling for geothermal energy)

Switching: TEL & GLO (hard to switch when you are a postpaid subscriber), AP & other utilities (for an area, there's only one power, water provider.  you can't really switch to the competition), LOTO or companies that have government contracts (their's will expire this year though)

Toll: ABS & other media companies. PSE (you have to go through them to trade)


Bino

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Thanks for all the responses guys. Dami din palang pwedeng pagpilian konting due diligence na lang ang kelangan :)  :thankyou:


rds

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^dami ngang pagpipilian...but the price!

unfortunately, these companies with super durable advantage are quite expensive...JFC, AC, MER, MWC are priced 15 - 30x PE or more.

TEL and GLO in my opinion, due to their strong rivalry, is not having this much advantage. Besides meron pang SUN na nakikigulo.

How about VVT guys...if you like AP, you might as well consider VVT.


Richard4

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ahh since you are reading Buffet, why asking what company is stable?
He even buy companies that are not doing well and on the verge of bankruptcy. Case to point GEICO. Buffet himself doesn't consult anybody when buying a company but Ben G, however didn't listen to his mentor when putting 75% of his net worth to the said company.


Bino

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@rds yeah I agree they're quite pricey but if you are looking at long term and you buy them when their prices drops, it'll all be worth.

@richard4 I just started last year and still learning by reading and doing my own research. I agree with the case of GEICO and I am still looking for such company locally. Like I said the lists that was provided are somewhat like a roster but still needs due diligence to decide if it does makes sense to invest in them.
« Last Edit: Jan 21, 2013, 01:19 PM by Bino »


Richard4

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I understood your point and I admire your honesty, I was merely testing your reaction to such comment
Day after day, I listen to wisdom of the great investors through audio books and that makes me this way, to always challenge the ANALyst reports
My advice to you Bino is not to BUY companies that your broker suggest. always ask yourself "why do I need to listen to my broker?"
brokers makes business when you make transactions do they not? without transactions they are DEAD
They don't like Buy and Hold kind of guys because that will affect their business BIG TIME.
Imagine this, What if all clients of COL or PHILSTOCK or any broker buy a share and hold it for a year? I mean all of them
yeah their company is actually DEAD for a year
Now tell me why do they release a new company valuation every month? and even update it every week ?
They are targeting your reaction, your impulse for the gold rush to drop whatever you are holding and buy a new company that will make( according to them ) better earnings
I wont recommend any company for you to buy. It is up to you to find out for yourself. But you can always check stock picks made here and use that as your guide.

"When most investors, including the pros, all agree on something, they're usually wrong."
- Carl Icahn

« Last Edit: Jan 22, 2013, 06:12 AM by Richard4 »


rds

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ahh since you are reading Buffet, why asking what company is stable?
He even buy companies that are not doing well and on the verge of bankruptcy. Case to point GEICO. Buffet himself doesn't consult anybody when buying a company but Ben G, however didn't listen to his mentor when putting 75% of his net worth to the said company.

that was Buffett!

how can we, ordinary "investor" KNOW that a company on the "verge of bankruptcy" can recover. with a very little information from internet, do not even have the luxury to visit the business site and interview people behind the business --- ours would be more of guts ang guessing...


rds

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@rds yeah I agree they're quite pricey but if you are looking at long term and you buy them when their prices drops, it'll all be worth.


that's a good attitude, if you can stick to it. this will work better if you have enough fund though.

its not usual that great companies' stock trade at single digit PE, and if it does, it will be for a short period of time. so better prepare your funds. but for us ordinary investor (who rely on salary), the best we could do is some sort of "selective" cost averaging.


Richard4

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that was Buffett!

how can we, ordinary "investor" KNOW that a company on the "verge of bankruptcy" can recover. with a very little information from internet, do not even have the luxury to visit the business site and interview people behind the business --- ours would be more of guts ang guessing...

Is Buffet just a man or a  5 sigma event?
Buffett once said that he was “85% Graham and 15% Fisher. But Graham is the total opposite of Fisher and vice versa you ask.
The marriage of a qualitative analysis and a quantitative analysis made him the greatest investor of our time.
If you read "The Warren Buffett Way" you will know what I mean.
Key factors of the book are:
1. scuttlebutt
2. the margin of safety
3  intrinsic value
4 management and reputation
5 a commodity and a franchise
I don't use Warren Buffet strategy 100% and not even a long term investor as the term implies,but I admit I use his valuation technique and time it with Martin Pring KST
Buffet doesn't use Technical analysis,he waits for the "perfect pitch" but I do.
I can blabber for days about buffet, graham, fisher, peter lynch etc but none would have mattered because in real word,emotion of the investor not theory makes the buy/sell decision


rds

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^our concern here is how to determine (with some level of accuracy) that a "company on a verge of bankruptcy" CAN RECOVER, which in your example is GEICO in the case of Buffett!

unfortunately the 5 factors you have just mentioned will be of little help to us (ordinary investors) in evaluating if this company can recover! what available information do we have - the quarterly/annual FS reported by the company on PSE? data of near to bankrupt company is very erratic - so i don't know how you can determine the intrinsic value of a company that's been losing for years.

Buffet, Lynch, etc. have all the capacity to investigate any losing company, by ocular inspection, interviews, and some insiders information...

so for me, to say - find a company on verge of bankruptcy and evaluate, is more of a guessing game for ordinary investors!


Bino

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I understood your point and I admire your honesty, I was merely testing your reaction to such comment
Day after day, I listen to wisdom of the great investors through audio books and that makes me this way, to always challenge the ANALyst reports
My advice to you Bino is not to BUY companies that your broker suggest. always ask yourself "why do I need to listen to my broker?"
brokers makes business when you make transactions do they not? without transactions they are DEAD
They don't like Buy and Hold kind of guys because that will affect their business BIG TIME.
Imagine this, What if all clients of COL or PHILSTOCK or any broker buy a share and hold it for a year? I mean all of them
yeah their company is actually DEAD for a year
Now tell me why do they release a new company valuation every month? and even update it every week ?
They are targeting your reaction, your impulse for the gold rush to drop whatever you are holding and buy a new company that will make( according to them ) better earnings
I wont recommend any company for you to buy. It is up to you to find out for yourself. But you can always check stock picks made here and use that as your guide.

"When most investors, including the pros, all agree on something, they're usually wrong."
- Carl Icahn



@Richard4 I was once a member of Truly Rich Club that was last year ago, until I started reading books and posts from this forum I decided to drop the membership and go on with my own due diligence. Not that I don't like TRC in-fact I considered it as a stepping stone to kick start myself into investing. I just thought that instead of paying the monthly fee I'd rather add that to my funds and do my own study. I agree on what you said about brokers, I'd rather listen to mentors or people who were really investing their time, knowledge and money to this game. Besides they're much like real state brokers many of them sells houses but they themselves don't have houses hehe. Anyway are there any books or audiobooks which you can recommend for starters like me. =) thanks allot in advance.
« Last Edit: Jan 22, 2013, 02:03 PM by Bino »


 


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