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Deesof26

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10/07/18

15:05

Post #: 34254516
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Originally posted by madamswer ↑

I think that one of the most valuable thing we private investors can do is to re-visit our investment theses that were formulated at the time we bought into businesses (not just where we got it right, but of even more value, where we got it wrong).

In CYB's case, the essence of the investment case was that, at Price-to-Book of 0.5x, the stock was price like ROE would remain at the then- paltry 5% level to perpetuity. Despite management's clearly articulated strategy to drive down Cost-to-Income, and hence, ROE.

With ROE now approaching 10% (which probably close to CYB's level of sustainability), and with the share price having responded, resulting in P-to-B approaching 1.0, it looks to me like most of the investment out-performance that was envisaged, has been delivered.

Accordingly, I have been selling my CYB holdings in recent days.

Of course, no investment thesis goes exactly to plan: in CYB's case there were some major seminal events that happened over the past 2 years, namely Brexit and the acquisition of Virgin Money.

Personally, this investment has reminded me yet again of the value of focusing on the underlying performance of the business itself, and not being fazed by un-forecastable, extraneous, macroeconomic events over which management has no control.
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Thanks for your contributions.. Very logical and well thought out...

CYB Price at posting: $6.14 Sentiment: Buy Disclosure: Held
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Thanks for your contributions.. Very logical and well thought...

Top Stories

Dale Gillham's weekly wrap: Sigma-Chemist Warehouse merger creates pharma powerhouse

Bigtincan's Board backs Investcorp offer: Why a NASDAQ listing could be game-changing

HotCopper Highlights: Your most watched stocks for Week 47, 2024

Panic, paranoia, and gangland politics: HotCopper users react to Dubber's missing $26M

Pan Asia rebranding to 'clear confusion' after bagging $35M for Chile projects

Scientific conference spotlights PYC's work on blindness disease treatment

To make modern missiles, you need 3D Printing. And in that gold rush, Amaero is selling shovels

Week 47 Wrap: HotCopper users' most watched; Brent lifts on Putin's scary letter; RFK dents CSL

Sales growth pushes Lovisa's fortunes (and shares) upwards

MinRes's Ellison knows he screwed up – for that reason, hunt for new Chair to be sped up