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Derek A. Barrett's  Instablog

Derek A. Barrett
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I buy established, good companies with strong management, solid balance sheets, free cash flow, growing earnings, and increasing dividends. This is a long strategy, which buys value situations, combining the fundamentals of Growth at a Reasonable Price, with Dividend Growth Investing. This style... More
My blog:
Fully Informed by Teddi Knight
My book:
Generate Thousands by Dr. Samir Elias
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  • kevinconway
    , contributor
    Comments (1724) | Send Message
     
    There was a movie about the Rothchilds...will never forget the sceen...the market was tanking and here he was, standing on the street while others paniced...waiting...then he started to buy.

     

    I went 100% Cash in Sept 2006...looking at the housing market and the dive that the market was going to take. The data and trending was there for all to see...and ignore. Advised friends and relatives to get ready for a 30-50% drop. Stayed out till Feb 2007...though I had missjudged , knew something was still out of wack, but had no idea....did not realize the shell game being played to dely the fall. I stayed at a 60% Cash position. Then, on March 3, 2009 I jumped back in and was fully invested in a relatively short period of time. Told people that this was the opportunity of a lifetime...they laughed at me. My financial advisors are part of a very big firm....of all assets under management in mid 2009 50% or so was CASH...and "investors" are still shell shocked.

     

    So when I see another insane pattern unfolding I will likely do something similar.

     

    One of my super wealth friends goes to 100% cash every Friday afternoon...then goes back in on Monday. This strategy is crash proof...not something I could do...but he is one of the smartest people I know.
    14 Nov 2013, 01:19 PM Reply Like
  • Derek A. Barrett
    , contributor
    Comments (3534) | Send Message
     
    Author’s reply » Hi Kevin !

     

    Thanks for the excellent comments and nice work on maintaining discipline back in 2006, and then jumping back in and backing the truck back up in 2009.

     

    I was actually looking at buying a home back in 2006, but the math just wasn't adding up, so I held out and decided to come back later on, got very lucky and found the bottom in my city. Like you I could not understand how these prices were sustainable, especially when the buyers were not all CEOs, yet they were buying multi-million dollar homes. Some even buying multiple homes, it was crazy.

     

    Do you see any patterns developing now? Seems lots are still "shell shocked" as you said so the crazy thinking isn't going on, and there does not seem to be a catalyst like .com or housing mania vehicle to push it.

     

    Also liked hearing about your super wealthy friend going to cash every Friday, fascinating.

     

    This movie House of Rothchild must be the one:

     

    http://imdb.to/1cuOqRS
    15 Nov 2013, 02:08 AM Reply Like
  • kevinconway
    , contributor
    Comments (1724) | Send Message
     
    glad to reply. I have been researching the people whom created the world we live in...the great ideas they had...the people whom helped them...the massive challenges.

     

    In my opinion we are in a situation similar to the Industrial Revolution....amazing growth opportunities...transf... never ending defensive one liners "the telephone is a nice toy but it will not become a commercial success"

     

    I ignore the "market" and focus on the companies that could change the game...like NXPI (bought at $14.50....or WPRT...made a ton of money...first bought at $1.,27 a share, 10K and sold for a massive profit...bought back in and out a few times...just sold today because someting is up but I do not know what. NXPI is transformational...no more credit cards, keys, the smart phone does everything and saves tons of time (pray you do not loose it though)

     

    So here are key drivers for the future: Water/ Waste Water...very big problem. Alternative Energy...wind and solar (and also turbine applications in rivers and tidal areas)...thermal energy. Agriculture in growth areas POT...21% of world volume use is in China...people focus on this...but 21% is also in Latin America, and everything that implies.

     

    USA is doomed. I grew up on LI. Lots of family members on Wall St...most of the family memebers are wealthy. But the division in the US, the union demands, the "solve my problem" attitude and US centric investment strategies are the killers. Self inflicted destruction.

     

    There will be a convergence in communications...APPL is in the best position to pull this off...but I am not a buyer...waiting to see whom the master (Steve Jobbs) will be to make this happen...not there yet.

     

    Transportation...massive changes and upgrades in the works...must happen...Bombardier is a favorite (my dad helped develope the Challenger Jet...why we moved to Montreal in 1965)

     

    China and India have 3B people...no more needs to be said...the long term implications are obvious. Massive declines in US "market share" as this kicks into gear...China invesing heavily in Africa...next cheap labour venue...Latin America will come into its own.

     

    Agricultural transformation....plot farms to modern agricultural thousands of acres farms...POT...a must....equiptment....... and feed, middle class growth and PROTEIN demand.

     

    US multinationals that have a solid world view will be OK...but the job losses for "all other" in the US will be massive UNLESS people get off their fat asses, get their lives in gear, and get back to innovation and growth....

     

    Think about what the future MUST be like...there are you opportunities.
    2 Dec 2013, 10:33 PM Reply Like
  • kevinconway
    , contributor
    Comments (1724) | Send Message
     
    seems that there are sections of things i typed that are completely missing...why I have no idea...try to make the best sense out of this.
    2 Dec 2013, 10:35 PM Reply Like
  • kevinconway
    , contributor
    Comments (1724) | Send Message
     
    Re my friend. The portion of his wealth that he trades every week is in excess of the definition of "rich". But he has considerable wealth in a broad range of assets, that he just lets ride. But the trading dollars....100% cash on Fri...back in on monday and has a few choice picks...but people like this are in a world of their own. i can not begin to imagine how much he makes in a good week. The jumps I see in a week in thousands or tens of thousands of dollars in my gains are in the hundreds of thousands for him....it is a game...not about money. He likes to relax on weekends...so not having any money in the market makes this possible. Buys a lot of medical equipment for hospitals...loves what he does...I am happy for his amazing success.
    2 Dec 2013, 10:44 PM Reply Like
  • kevinconway
    , contributor
    Comments (1724) | Send Message
     
    Thanks for the movie link! Keep your cool...let others go nuts...jump in...make a ton of money.
    2 Dec 2013, 10:46 PM Reply Like
  • Derek A. Barrett
    , contributor
    Comments (3534) | Send Message
     
    Author’s reply » Thanks Kevin for your excellent comments on the article. I am with you on alot of your picks. I know you have also mentioned DE a few times to go along with the agriculture theme. Alt. energy especially solar is way up. I also like the waste water theme as well, so many big names to choose from in this space.

     

    Barron's just picked DE as an undervalued 2014 stock set to rise.

     

    Some are also eying coal as making a comeback, saying it's impossible for some nations to move away from wood (and dung in many cases) without going through coal first. I know regulations have cleaned up alot of the pollution concerns but then again I don't know enough about it to make an informed opinion.

     

    That's ironic you mentioned Bombardier. Our senior management class in college, we had to analyze Bombardier and recommend solutions for the business from a strategic level as a group and present our findings. Those were peer reviewed and our class was pretty...eh blunt too so you couldn't screw around lol. After we presented our recommendations we were then told how the actual management at the time handled the situation and what they did. One of the best classes ever for analyzing companies from a fundamental standpoint, extremely helpful.
    7 Dec 2013, 11:26 AM Reply Like
  • kevinconway
    , contributor
    Comments (1724) | Send Message
     
    Just catching up. Bombardier is not managed as well as it could be because of the family culture and people puting on a show for the bosses. I was MM in a large french canadian company for 4 years and understand this. Their creative thinking and design is great. Most investors do not understand the business model and the stock bounces on news...years ago when times were difficult they cut a load of jobs in the business jet sector...stock took a dive...I bought...BECAUSE...75% of the people cut were transfered over to jobs in the commercial jet devision and transportation...the second piece of news was at the same time as the lead story the press ran with that and said little on the positive news. I have a solid PR background and understand how to get stories..but do not expect a quick follow up, because some other news will pre empt your follow up. Think I doubled my money on that move...been in and out a bunch of times...now long and what I own is free from previous gains.
    11 Jan, 01:06 PM Reply Like
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