"- could it be emotional bias? It's something I have been guilty of in the past, and usually it occurs after having met the management team and formed some kind of association. These days I don't even bother going to AGM's lest I be 'schmoozed' by the wiles of the company representatives. Just saying."
Yes, I am sure it is some sort of anchoring bias that keeps me intrigued.
But I am quite sure that what it is not, is that I have been beguiled by the company's management; for a number of reasons:
1. It might surprise you to learn that I have not had much contact with the company's executives; I've never met the founder and chairman and I only met the MD and CFO about 18 months ago, and I've merely sat in 2 group meetings with them since. The total direct contact time with them - including listening to result presentations - would not be more than 4 or 5 hours. So it's not as if I have a direct line to anyone in the company.
2. I've more than just a few grey hairs today, testimony to me having listened to a great many management presentations conducted over many years, and this has left me with the battle-hardened cynicism that sniffs out even the slighted sign of "executive spruiking";
3. If the people that run SDI are paid to spruik their business by "schmoozing" investors, they do a pretty lousy job of it, because they aren't exactly cutting-edge, capital market-savvy promoters of the prospects of the company (something of which, I assume, they are not in the least ashamed!). Instead, they come across as somewhat folksy, salt-of-the-earth, and - to a degree - almost out-of-place - when it comes to interacting with the market. A bit awkward, almost [*]. This is, after all, a family business. But it is a family business that happens to have some external shareholders with whom interaction needs to occur from time to time. I think they far prefer to just get on with doing theor jobs of running the business.
[*] Although, to be fair, the CEO has improved her presentation style and confidence vastly in recent times. I recall listening to one of the earliest result presentations she conducted; she came across as very nervous and tongue-tied and seemed to struggle to keep things in context. It was a bit painful to listen to.
So, no, I think the bias I have towards SDI is due to two things that are totally unrelated to being beguiled by management:
1. Support for the "local team" and the "underdog": This company is a home-grown success story that punches above its weight on the world stage and has beaten the odds in being able to match it with some heavyweight competitors. It's a bit of a warm and fuzzy "feel good" story. (Yes, I know; "warm and fuzzy" doesn't automatically equal "good investment".)
2. Despite its indifferent performance in recent years, SDI has been a great little investment for me, which always naturally induces a certain emotional fondness. In recent years, as the holding periods of some of the stocks I own have become quite substantial (>10 years in several cases) I have developed a new measure of investment performance: that is, is to monitor how many years it has taken for the cumulative dividends I receive to exceed what I initially paid for a given stock, a sort of purchase-cost-recoupment-via-dividends period, if you like. I don't mind saying that I now have a few stocks for which my purchase capital has been fully recovered by the dividends I have received over time, and for SDI I expect that to also be the case, possibly sometime in the next 12 months, but almost certainly within the next 12 months. That would make it approximately 7 years for recoupment of my initial capital outlay through dividends. Which would be a personal best for me.
Little wonder I am want to talking long and often, about SDI.
Why, if I received a share for every word I have ever said, or written, about SDI, I suspect I would own the entire company today!
(20min delay)
