Ann: Trading Update, page-63

Croasian

I actually consider 'talking myself out of stocks' to be a really critical part of the investment process. Pretty much the first thing I do once I've done some work on a business and I start getting positive vibes about it being a possible buy, is put my pen down, go for a walk, and then spend some time attempting to talk to myself out of buying it - which really just means understanding the risks and downsides. To me, understanding downsides and risks is more important than precisely dimensioning the upside, and it's why I can't justify doing anything with MRM at the moment.

Funny you should mention S32 - it's literally the only mining stock I've owned in over a decade. I hate - passionately! - mining businesses as they are terrible businesses, but I couldn't help myself when it got down to $1.10. I sold out just north of $2 (I guess I got lucky in almost completely nailing the bottom on the buy, but I gave it back by selling too soon). Big, fundamental difference with S32 - and partly why I felt comfortable breaking my fundamental rule to never buy mining businesses in the case of S32 - is that BHP spun it out with a squeaky clean balance sheet, so I felt comfortable taking a position as I at least felt the downside was limited. That's obviously very different to MRM, which is a very highly leveraged situation.