Who's going to do well?

bowlhead99

coachman12 said:

I see no reason why Ocado should not continue to delight its investors, especially as it is now operating a "side-business" in selling its technology and methods of operation to supermarkets all over the world. 

Side business? Its main business is in selling its technology and methods of operation to supermarkets. There is very little money in packing several baskets of groceries of all different types and delivering them to someone's door within a strict time window, for a nominal fee.

TBC15

Username999 said:

TBC15 
I see you've found how to delete posts.

Well spotted.

In retrospect I considered it a little harsh.

coachman12

bowlhead99 said:

coachman12 said:

I see no reason why Ocado should not continue to delight its investors, especially as it is now operating a "side-business" in selling its technology and methods of operation to supermarkets all over the world. 

Side business? Its main business is in selling its technology and methods of operation to supermarkets. There is very little money in packing several baskets of groceries of all different types and delivering them to someone's door within a strict time window, for a nominal fee.

As I said in my original posting, I have made a fortune over the years I have collected and added to the number of my Ocado shares.
Most of that windfall came long before Ocado started its sideline , which I mentioned merely in passing. 
The real reason for its success is that it represents the future for those who are discerning enough to see it.  Meanwhile I continue to enjoy the very large sums that have showered down on me from the "packing of several baskets of groceries" 

bowlhead99

coachman12 said:

bowlhead99 said:

coachman12 said:

I see no reason why Ocado should not continue to delight its investors, especially as it is now operating a "side-business" in selling its technology and methods of operation to supermarkets all over the world. 

Side business? Its main business is in selling its technology and methods of operation to supermarkets. There is very little money in packing several baskets of groceries of all different types and delivering them to someone's door within a strict time window, for a nominal fee.

As I said in my original posting, I have made a fortune over the years I have collected and added to the number of my Ocado shares.
Most of that windfall came long before Ocado started its sideline , which I mentioned merely in passing. 
The real reason for its success is that it represents the future for those who are discerning enough to see it.  Meanwhile I continue to enjoy the very large sums that have showered down on me from the "packing of several baskets of groceries" 

The 'sideline' is where your share price value growth has come from. Ocado's consolidated profit/loss before tax over the last decade or so was:
2009 £ 25m loss ; 2010 £ 12m loss ; 2011 £ 1m loss; 2012 £ 2m loss; 2013 £13m loss; 2014 £7m profit; 2015 £12m profit; 2016 £12m profit; 2017 £1m profit; 2018 £44m loss; 2019 £214m loss

These extremely modest corporate profits (mostly losses) are on sales revenue growing from about £500m to £1750m.  They have never really made any real money from the grocery retail aspect of utilising huge amounts of capital investment to sell other people's stuff door to door.

The 2017 published profit before tax of a million pounds (just £0.001 billion) came from £1.5 billion of revenue. Virtually none of the revenue made it to the bottom line. In that year they reported £81m of EBITDA from retail and £5m facross Solutions and Other, but EBITDA is not real profit because it excludes all the interest cost of their finance and the depreciation of their assets. By the time the 2019 results were announced, that £86m of EBITDA from 2017 was restated in the five year summary as only £77m so that the 2018 and 2019 EBITDA results of £60m and £43m did not look like such a relative fall. For the year ended 2019 the EBITDA from the retail side was just £35m on over £1600m revenue.

You haven't made a 'windfall' from Ocado profitably developing a supermarket delivery retail business - they made a tiny amount of profit from that segment and have never paid a penny of dividends from it.  Instead you have made money on the *potential* of a software solutions and logistics/ process engineering model which can be sold to others. 

If you think that despite a total lack of reported profits from retail they have been 'showering' you with rewards of very large sums from it, and the 'solutions' business is just some new useful sideline, you are deluded. They haven't made money from a retail delivery service despite having a one-seventh share of the whole UK online grocery delivery market in 2019.  So they haven't paid you any rewards from that.  What has happened is that stock market investors see the potential in a £6 trillion and growing worldwide grocery market as Ocado sells its software and logistics solutions to (e.g.) US and Japan, while the Ocado CEO is forecasting those countries' online grocery markets to double over the next five year and noting that their model has addressable markets beyond grocery. The stock market investors have recognised this years ago which is why your shares have been going up.

They have not been going up because Ocado can get a delivery truck to my home with a handpicked order and charge me a few pounds for that service, making a loss on the trip which is roughly covered by the gross margin on the groceries less overheads. What makes them money is the data about the trip; every delivery is another bit of data about how well or badly they are running the operation - and the data about how to do things or not do things is valuable to a supermarket in Kanto who wants to roll out an efficient service across their country; so they have customers in Tokyo, likewise Toronto, and Paris, and Melbourne etc etc. 

What you say you are mentioning merely 'in passing' is nothing like a sideline, it's the very core of their future - what they are selling is not a packet of pasta, but a scalable cloud-based end-to-end ecommerce and fulfilment solution for businesses that want to protect or improve market share through a growing delivery channel, from which Ocado earns implementation fees and ongoing capacity-related fees. 

UKamigo

After the crisis is over, Insurances companies are going to do very well.

DiggerUK

Thrugelmir said:

DiggerUK said:

Could posters at least offer suggestions as to how people move portfolios in to defensive positions. Merely coming out with the mantra of 're allocating' and 'diversifying' is serving up bones with no meat..._

Equities by their very nature carry risk of some kind. The question that is currently being posed is whether the potential return is worth the risk.  

Sorry Thruglmir,  I missed your post.
Yes, all equities carry risk. The current situation boosts the risk factors however. Low risk becomes +1 on the risk scale, and high risk also becomes +1. All of a sudden the investors risk appetite chosen when starting out is ignored and they are served the risk they get and have to  take it gladly, or take it glumly. Hobson rules for now.

In such a scenario the seasoned and unseasoned investors both have to decide wether to hold or fold. Digger Mansions is spared that judgement call.
To me this illustrates the flip side of accusations made against my choice (eggs in one basket) up against the other side of all eggs in equities..._

Thrugelmir

DiggerUK said:

Thrugelmir said:

DiggerUK said:

Could posters at least offer suggestions as to how people move portfolios in to defensive positions. Merely coming out with the mantra of 're allocating' and 'diversifying' is serving up bones with no meat..._

Equities by their very nature carry risk of some kind. The question that is currently being posed is whether the potential return is worth the risk.  

Sorry Thruglmir,  I missed your post.
Yes, all equities carry risk. The current situation boosts the risk factors however. Low risk becomes +1 on the risk scale, and high risk also becomes +1. All of a sudden the investors risk appetite chosen when starting out is ignored and they are served the risk they get and have to  take it gladly, or take it glumly. Hobson rules for now.

In such a scenario the seasoned and unseasoned investors both have to decide wether to hold or fold. Digger Mansions is spared that judgement call.
To me this illustrates the flip side of accusations made against my choice (eggs in one basket) up against the other side of all eggs in equities..._

While I'm advocate of diversification. Possible to reach a situation where one holds too many eggs to possibly understand them all fully. 

bowlhead99

DiggerUK said:

Thrugelmir said:

DiggerUK said:

Could posters at least offer suggestions as to how people move portfolios in to defensive positions. Merely coming out with the mantra of 're allocating' and 'diversifying' is serving up bones with no meat..._

Equities by their very nature carry risk of some kind. The question that is currently being posed is whether the potential return is worth the risk.  

Yes, all equities carry risk. The current situation boosts the risk factors however. Low risk becomes +1 on the risk scale, and high risk also becomes +1.

I'm not sure it does. If the market has adjusted the price of equities so that they are cheaper than they used to be, why has a high risk strategy become riskier than it used to be? There was always a risk that equities could fall 50%+ from their highs. So just because equities have fallen some way from their highs - aren't the people still holding them, still engaged in the strategy on which they had embarked? Their risk hasn't really changed. They are now just carrying out their strategy rather than planning it.

It is like if you are packing your bags for a holiday. There is a risk it might rain, so you can decide to bring a coat and have more stuff to lug around, or travel light and risk getting wet.  The fact that while you are at your destination, it has started to rain, does not change the fact that if it rains and you didn't bring a jacket, you'll get wet. It doesn't mean it is more likely to rain for people planning their holidays right now. And it might mean brighter days ahead for the people currently getting wet, because once the clouds have dumped their load, they might not rain again for a while. 

 All of a sudden the investors risk appetite chosen when starting out is ignored and they are served the risk they get and have to  take it gladly, or take it glumly. Hobson rules for now.

I don't follow this. Who is ignoring the investor's risk appetite? The investors? When they selected their investments initially, they knew they would be served whatever performance they would get, and couldn't predict exactly what would happen to their returns in each scenario they might face, nor what actual scenario they would face. The market always ignores the investor's risk appetite because it doesn't know the investor personally. It just does what it wants, moved by the weight of trillions of dollars / pounds / euros etc pushing or pulling it. 

In such a scenario the seasoned and unseasoned investors both have to decide wether to hold or fold. Digger Mansions is spared that judgement call.
To me this illustrates the flip side of accusations made against my choice (eggs in one basket) up against the other side of all eggs in equities..._

Hasn't Digger Mansions had a 'hold or fold' judgement call to make every day since it embarked on its strategy of spending its cash to buy a pile of gold and not selling it until cash is needed for something? Every single business day of the year, it could hold the gold, or fold the gold and receive cash.  The fact that the investor running the Mansions generally always decides to hold and never to fold, does not mean they are 'spared' the practical decision of whether to keep going with the strategy to keep the pile of gold, or to cash it out.

A hold or fold decision made because you have promised yourself never to sell regardless of data, is still a decision. When gold started falling from its peak and you kept buying it, you were actively taking a decision not to 'fold', and simply bought more eggs for your basket instead.  The only reason you feel you are being 'spared' a decision at the moment is because you are content with your strategy. As gold and equities often experience peaks and troughs of market price at different times, you might feel that only one person (the gold bug or the equities fan) is making a decision at any one time.  But clearly both groups would be able to take a daily practical decision to hold or fold. 

coachman12

Re bowlhead's extraordinary lengthy posting about Ocado, which is far too over-long for me to requote here, I just wanted to reply briefly. You will recall that in my original posting on this thread, I DID say that my views about Ocado were solely for the discerning who had the ability to look to the future rather than what is visible to the amateur who is reading current info of simplicity at the present time. So it seems I was right to add that caveat in my original posting.
Bowlhead's overview of Ocado lacks the depth that I get as longstanding shareholder with access to AGM minutes, Chairman's reports, business plans etc.  
Yes, it is true that the aspect stressed by bowlhead ( to those who know the company , it is known as Ocado Smart Platform) has been a bonus . But it was not a foreseen part of the success story when the company was first set up -----and, to put it simply, it is still not the cornerstone of what Ocado has always planned for the future. And that future is based on their strong belief that online shopping is the future, and its main thrust forward is still based on that ethos, expecting profits and even huger success from its core delivery concept by 2030. Those who know about the markets are with Ocado for the long term ride ( or a quick amazing profit from the share price rocketing). I remember when Ocado shares sold at 30 or 40p. They rose dramatically long before what I called their "sideline" (Smart Platform )occurred, and that says all one needs to know about Ocado's core aims and plans. Today's share price is 1367 and both my stockbroker and I forecast the price to be over £30-35 by 2025 ( and since the deal with M&S, possibly  an even more  lucrative take-over may also be on the cards). For those who know about share dealing, there are companies we buy into for a sharp increase in share price or for the long run ( both of which Ocado are great for); and other shares that we buy for the dividend values ( and personally I get that income from my shares in companies such as Rio Tinto and Amazon).
It is a bit complex for anyone starting out or without in-depth knowledge, so instead of explaining any further here , I would be sincerely happy to give advice to bowlhead if he wishes to PM me.
But to end this, I would just say that I merely contributed to this thread in the first place because O/P asked for market tips and, with caveats, I recounted my own success with Ocado ( I could now buy a nice house solely with the share price increases since my original purchases). And , as I originally said in my original posting, there is so much luck and instinct rather than advice from people who read a lot but do not "walk the walk". 

Username999

coachman12 said:

.... and other shares that we buy for the dividend values ( and personally I get that income from my shares in companies such as Rio Tinto and Amazon).

Didn't think Amazon has ever paid a dividend.