How much does profit does it take to recover from a loss?

After today’s announcement that Bang Laboratories has launched a second product using Anteo’s Mix&Go it costs 30% more to get in the Anteo Diagnostics game. That’s a shame for me, as after I spent most of yesterday researching the Mix&Go product, management and the diagnostics industry, I’d decided to buy a starting position.

Amcom is an Australian telecommunications company which supplies dedicated fibre optic networks to business and government for data, internet, voice and related services. Amcom also has a 23% ownership of iiNet, Australia’s number two ISP.
Over the last four years Amcom has put up some impressive growth. Revenue has grown 15% annually and thanks to expanding margins earnings have grown at an impressive 21%. The consensus view in the market is that increased competition from Telstra and the roll-out of the NBN will have a negative impact on both Amcom and their holding in iiNet. Consequently despite management forecasting another year …

Anteo Diagnostics is another business without earnings of note but making cool stuff that a large industry could adopt. Unfortunately Anteo fails Lynch’s crayon test as I can’t illustrate what they do with a crayon.

Peter’s Principle #3:
Never invest in any idea you can’t illustrate with a crayon.

Catch the Wind (CTW.CA) is without a doubt my worst loss ever. It’s the last stock I want to think about and for that reason it is the stock that I’m forcing myself to review today. I wish I’d taken my own advice to follow Peter Lynch’s advice to wait until they turn a profit to invest. Those elusive earnings seem as far away today as they did when I first wrote about Catch The Wind a year ago.

The following advice is offered with Matrix Composites & Engineering Limited (MCE) owners in mind, but it applies to all value investors who are holding on to fully valued companies.
I offer this unsolicited advice as I believe there are a number of new “value” investors who are sitting on substantial gains in MCE and my view is they should book those gains and move on.

Is there a margin of safety at the current level? I think not, the only way to get see a decent MoS is to use a …

The Fusion Superannuation Fund is up 14% year to date, thanks in the main to strong performance by M2 Telecommunications and Biota. I have been increasing the funds cash position and now hold 12.4% in cash. Cash is an attractive option in Australia where safe 6% returns are easily available. The sales have predominately been in banks, ANZ was first out the door followed by Westpac.

Minara Resources is a $1B leveraged play on nickel prices and therefore stainless steel production.
Minara’s main resource the Western Australian Murrin Murrin nickel/cobalt laterite deposits have a 30 year mine life. They’re looking for growth opportunities. Large capital return in 2010, $111M (9.5cents/share). Strong balance sheet with cash on hand $225M as of Dec 31. Earnings and cash flow positive.

What if Jeremy Grantham is right and this time is different? What if this secular bull commodities run doesn’t bring enough new resources online to meet the growing demand?
While there are certain to periods of weakness in demand for resources and in the very long run a revolutionary technology or fundamental change in the way we live will bring balance, over the next 20-50 years there seems to be a good chance that Grantham is right and this time is indeed different. We appear to be running out of what …

Po Valley Energy (PVE.AX) remains speculative, but with their Sillaro well now at stable production and Castello scheduled to re-start production in Q3 2011, they have the cash flow to continue their exploration and development. It is worth noting that the Castello re-start has slipped back a quarter. This missing of targeted dates is business as usual at Po Valley. I’d prefer management either adopted conservative estimates or the ability to deliver on time.