Ann: Trading Update, page-35

@MarsC


If I had my finger on the sell button the moment I saw a rise in costs, or a drop in margins, or whatever, then I would say I was worrying about small things. But to contemplate the impact of the unwinding of a very major housing boom, in a dispassionate manner without prejudice, could hardly be construed as "worrying about small things". That is big picture stuff.


I will try to explain where I am coming from and hopefully it would be enough for you to understand why I don't find the benefit of engaging in the discussion about the effect of housing downturn on REH that you are looking for.

- After being involved in the ASX for so many years, I have never found another company that has the qualities as good as REH.
- Because of this, I intend to continue to hold and build my position in REH for many decades to come.
- This intention is subject to REH continuing to possess the qualities that I admire.
- External factors such as housing downturn, in my dictionary, is small stuff.
- If as a result of a major housing correction, REH suffers for a number of years, as long as its qualities as a company remain, then it will be even better, as it will give me an opportunity to build an ever greater position in the company.
- As I said in my earlier post, looking at the result over the past two years after Actrol acquisition, I saw no reasons to be concerned about the qualities deteriorating.
- With all due respect, in my personal opinion, analysing ABS data on housing and trying to contemplate the effect it will have on REH, is a futile exercise.

So the way I read what you are really saying is, "REH should not be open to scrutiny". I suggest that one cannot make comments such as those just made about SDI (after the fall), if one is unwilling to live by the same philosophy with ones own holdings.

If tomorrow there is a market announcement saying that REH is going to start issuing options to the Wilsons or that they are going to bid for something like Metcash, then I will be one of the first to criticise the move.

I think there is a case of misunderstanding between us. I don't have a problem with any company being scrutinised, including REH. I just found your ABS data analysis in relation to REH to be of little value. You might disagree with me, and I'm more than fine with it. That's what makes a market.

When I first started building my positions in REH, I hadn't even found out about the HotCopper forum. The analysis and the decision to buy REH was purely mine alone. I didn't follow anyone's lead.

If you read carefully my initial SDI post, the main point of my post was a reminder to everyone to be an independent thinker and my preference for bigger position sizing.

By reading the posts in the SDI forum, I get the impression (might be incorrect) that there are some here who end up becoming SDI shareholders because of the influence of some influential posters even though they themselves haven't done proper analysis on their own.

By the way, reading others' HotCopper posts is not enough to count as proper analysis.

My post was basically a reminder to everyone to be more independent and not rely on others' numbers/analysis.

The second part of the post was about my belief of opening a sizable position in a company or don't even bother with anything.

I hope this clarifies your impression about my "protection" towards REH.