Posts In: Premium Articles-02

Geoff Gannon November 2, 2018 Premium Articles-01, Premium Articles-02

Argan (AGX): A Cheap, Cyclical Construction Company With a Ton of Cash and No Debt

MEMBER WRITE-UP BY JACOB McDONOUGH Argan is a holding company that owns a few different businesses, but the most important by far is Gemma Power Systems (GPS). GPS is an engineering, procurement, and construction contractor and consultant. The company mostly provides services related to the construction of natural gas power plants, but also has worked on wind and solar projects in recent years. Argan acquired GPS in December 2006 for $33 million, and since then it has produced over $607 million in cumulative EBITDA. Argan has…...

This content is for Regular Membership and Annual Membership members only. Please login or register to view our content.
Log In Register
Read more
Geoff Gannon August 19, 2018 Premium Articles-02

Outperformance Anxiety

To Focused Compounding members: I spend a surprising amount of time talking with members about other investors – investors who are doing better than them. The truth is: returns much beyond 20% a year aren’t even worth thinking about. Sure, you can find investors who have done better than 30% a year for a ten year stretch. I have a copy of Joel Greenblatt’s “You Can Be a Stock Market Genius” sitting here on my desk. And if I flip to the back of that…...

This content is for Regular Membership and Annual Membership members only. Please login or register to view our content.
Log In Register
Read more
Geoff Gannon August 12, 2018 Premium Articles-02

Pre-Judging a Stock

Monday, August 6th – Butler National by VETLE FORSLAND Tuesday, August 7th – Northfield Precision Instruments by LUKE ELLIOTT To Focused Compounding members: This week, a Focused Compounding member sent me a link to a blog post about Brighthouse Financial (BHF). Brighthouse Financial is the spun-off retail business of MetLife. Although websites often list Brighthouse Financial under the industry group “Life Insurers”, the stock is really a seller of annuities. Many of these annuities are tied to the performance of the S&P 500 or other…...

This content is for Regular Membership and Annual Membership members only. Please login or register to view our content.
Log In Register
Read more
Geoff Gannon July 10, 2018 Premium Articles-02

Doubt as a Discount

Saturday, June 9th – Hamilton Beach Brands by ANDREW KUHN To Focused Compounding members: Let’s play a game. I ask you a series of questions. You give me a series of answers. I then test the answers you give to prove them false using as unfavorable a definition of false as I feel like. You have $1,000 in your pocket. You can’t leave the room. You can’t use your phone. And you can’t take off your shoes. I offer you even money odds on each…...

This content is for Regular Membership and Annual Membership members only. Please login or register to view our content.
Log In Register
Read more
Geoff Gannon July 1, 2018 Premium Articles-02

Stylistic Skew

Wednesday, June 27th – Maui Land & Pineapple by GEOFF GANNON To Focused Compounding members: This week, Vetle Forsland was our guest for two podcast episodes. One was about GameStop (GME). The other was about Entercom (ETM). You should listen to them both. What stood out to me in those two episodes was Vetle’s style as a stock picker. GameStop sells – among other things – physical copies of video games. Entercom owns terrestrial radio stations. A lot of investors think these two stocks are…...

This content is for Regular Membership and Annual Membership members only. Please login or register to view our content.
Log In Register
Read more
Geoff Gannon June 25, 2018 Premium Articles-02

Relative Regret

To Focused Compounding members: One of the most difficult things for investors to deal with is to watch other get richer faster than you. In the stock market, the same choices are available to everyone. So, if someone is up 20% this year, they are up 20% purely on a collection of opportunities you passed on. Two things make this even tougher for the people reading this memo. One, you judge yourself on your relative results versus a benchmark like the S&P 500. Two, you…...

This content is for Regular Membership and Annual Membership members only. Please login or register to view our content.
Log In Register
Read more
Geoff Gannon June 17, 2018 Premium Articles-02

There’s Always a Simpler Problem to Solve

Wednesday, June 13th – Monro by DAVE ROTTMAN   To Focused Compounding members: As a stock picker, when you’re first faced with the decision to buy or not buy a stock – it seems like a complicated question. Consider the mental math problem of 54 times 7. There are a couple ways of tackling this problem. The simplest though is to multiply 50 by 7, getting 350 and then multiply 4 by 7 getting 28. You add 350 to 28 and get 378. There are…...

This content is for Regular Membership and Annual Membership members only. Please login or register to view our content.
Log In Register
Read more
Geoff Gannon June 3, 2018 Premium Articles-02

Anything Times Zero

To Focused Compounding members: Since I read “Fortune’s Formula” and “A Man for All Markets” this past week, let’s talk blackjack. In blackjack, the player has an advantage over the casino if he’s counting cards. A card counter can bet nearly the minimum when he suspects the rest of the deck has cards unfavorable to him in higher proportion than a fresh deck and he can bet nearly the maximum when he suspects the rest of the deck has favorable cards in a higher proportion…...

This content is for Regular Membership and Annual Membership members only. Please login or register to view our content.
Log In Register
Read more
Geoff Gannon May 27, 2018 Premium Articles-02

Efficiency vs Reliability

Friday, May 25th – Pandora A/S (PNDORA) by LUKE ELLIOTT Friday, May 25th – GameStop (GME) by VETLE FORSLAND Sunday, May 27th – “Value Trading – Does It Ever Make Sense?” by DAVE ROTTMAN To Focused Compounding members: Two different Focused Compounding members are to blame for this week’s memo. One is Dave Rottman who wrote an article entitled “Value Trading – Does it Ever Make Sense?”. The other is someone I was talking to this week on Skype. The discussion on Skype centered on…...

This content is for Regular Membership and Annual Membership members only. Please login or register to view our content.
Log In Register
Read more
Geoff Gannon May 20, 2018 Premium Articles-02

Human Nature is the Ultimate Hidden Fee

Tuesday, May 15th – Box (BOX) by Jayden Preston To Focused Compounding members: In an interview this week with Barron’s, Vanguard founder Jack Bogle cited stats that showed the average investor’s annual return from index funds was 8.4% from 2005 to 2017, from actively managed funds it was 7.2%, and from ETFs it was just 5.5%. ETFs and index funds are invested in much the same things. So, investors are charging themselves a 2.9% annual fee in the form of bad timing. The same Barron’s…...

This content is for Regular Membership and Annual Membership members only. Please login or register to view our content.
Log In Register
Read more