Letting the cat out of the bag about Connect Group in Omaha

PUBLISHED: May 08 2018 @ 02:08 | Comments (0) |

On Friday I addressed an audience on the subject of Buffett mistakes. There were around 200 fund managers, scions of the rich and managers of family funds. Most of the speakers focused on describing their own funds (and each and every one had out-performed! Everyone is above average in Lake Wobegone and in Fund Management Land). Some of the speakers were book writers e.g. Robert Miles, Jeff Gramm and Guy Spiers.

There was a good atmosphere, with polite and, at times, enthusiastic audience participation; this was a bunch of confident, intelligent and mature fund managers from all over the world. They like to network with each other, so I was a bit of an outsider.

My talk seemed to go OK, but unfortunately I let the cat out of the bag. I was discussing how Buffett does not use a stop-loss rule. Instead he relies on his intrinsic value assessment.

The example I used was his Washington Post purchase. After buying for $10.6m the shares declined by 20%. He didn’t sell. Those shares later became worth £1,300m. A stop-loss rule would have been unwise.

Then a recent example popped into my head: Connect Group (LSE:CNCT). Since I bought these shares they had almost halved. I explained to audience that I had not sold, and was looking to buy some more. My recent analysis convinced me that it was even more of a bargain than when I first bought.

I thought this was just a passing comment, and I did not actually give away the name of the company during my talk – what would be the point, these people were from the four corners and nobody would have heard of Connect anyway.

But after the talk three fund managers, in sequence, asked me to name the company. After some resistance, I figured that they could work it out for themselves from the public bits on ADVFN’s newspaper pages even if they could not access the full Newsletters I’ve posted for you.

So, mumbling something about…………..

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