ATM - A2 Milk Corporation Limited

[Cyclical]

I get what you are saying Beagle......however your 10% strategy is more a strategy to get average returns than a strategy to get exceptional returns.


Say you held 10% of your portfolio in ATM back in 2012..... all good so far, but then ATM grew so fast that in subsequent years it rapidly became 70% of your portfolio (as it did in my case.)

If you had continually adjusted your portfolio each year to your 10% level I would argue that you will have foregone very serious money and exceptional returns in one of the best performing companies in the history of NZX..

Much better to let your successes run... and run..... than to blindly stick to an averaging rule that is inflexible (even if it is well intentioned.)

Lastly, objectivity is a skill that has nothing to do with diversification. To paraphrase the great Warren Buffett, "Diversification is overrated. Much better to keep all your eggs in fewer baskets, but watch those baskets carefully."

Yeah, diversification is all well and good to a point, but really you're just spreading (or hedging even) the risk at the likely expense of diluting the potential gains. It gets to the point where you may as well just throw it all at an ETF (or dare i say diversify into several haha) and forget about tracking those individual stocks and trying to trade or whatever...boring aye?

Fair enough Gents and a good robust debate. At the end of the day everyone has to find their own pathway that works for them.

I posted today as a way of contributing and asking has the fast growth story run its course ? I think it is a question well worth putting out there because clearly the analysts are projecting out much slower growth rates going forward than what ATM has enjoyed in the past and ATM shareholders are shortly to again lose the wonderful and incredibly valuable expertise of Geoff Babbage. How the new guy will go is clearly a risk, just as it was when Herdlicka came on board.

For what its worth, my story is I have also done very well out of ATM..I rode it up for a few years and sold out most of my holding in March 2018 at just under $13. Before this I trimmed some along the way and I am sure others made a lot more from ATM than I did and good for them.
Since late March 2018 by my calculations ATM has increased in price by 39.5%.
In very late March 2018 the NZX All Gross Index was 9060 and is now 12,820 so is up 41.5% over that same timeframe.

I think ATM's slight underperformance of the NZX all gross index over that timeframe adds some validity to the merit of my question today pondering whether the good times have ended and I guess the question I am posing is really one that asks whether ATM is now a mature company with much more modest growth rates going forward ? Will we get market outperformance going ahead after slightly underperforming the market since March 2018 ? That's the $64,000 question, (so too speak), or for some people, quite considerably more

Well, well, the ETF wasn't so boring afterall

[Leftfield]

Fair enough Gents and a good robust debate. At the end of the day everyone has to find their own pathway that works for them.......
Since late March 2018 by my calculations ATM has increased in price by 39.5%.
In very late March 2018 the NZX All Gross Index was 9060 and is now 12,820 so is up 41.5% over that same timeframe.

Sorry Beagle/cyclical....... you are wrong.......... see this chart (NZX the Black squiggle at the bottom)

Attachment 11932

Take the same chart since 2012 and you will see the truly amazing return ATM has been....
so even if there is a hiccup at the moment (or even for the next 3 months) I would argue that ATM is likely to outperform the NZX av for the next 2 - 3 years so is still a good default stock to hold your wealth in.

[winner69]

I like the fact that Kingfish are very overweight A2 .....no doubt other funds are as well. Harbour Asset are highly regarded and they seem quite keen as well with sizeable chunk of some of their funds in A2

Putting 13%/14% of your fund in is pretty high conviction I reckon

[dobby41]

Say you held 10% of your portfolio in ATM back in 2012..... all good so far, but then ATM grew so fast that in subsequent years it rapidly became 70% of your portfolio (as it did in my case.)

Say you had 10% of your portfolio in Pike River?
Hindsight is a wonderful thing and being selective in example is great too.

[bull....]

Say you had 10% of your portfolio in Pike River?
Hindsight is a wonderful thing and being selective in example is great too.

to true hindsight is wonderful

[Leftfield]

Say you had 10% of your portfolio in Pike River? Hindsight is a wonderful thing and being selective in example is great too.

Not hindsight in my case....... it is actual........ and I can prove it.

FWIW.....Beagle's questioning of diversification was raised on the ATM thread, not the Pike River thread, so ATM examples are v relevant and proven.

That's all from me on this subject folks.... feel free to ignore what I say..... I don't really care.

Happy investing!

[BlackPeter]

Technically, the 100 day MA has been a good reliable indicator of new momentum or broken momentum over the last 5 years.
Momentum looks broken to me on the chart now. I might take a small stake when it breaks back up through the 100 day MA.
Smart move shorting this breakdown Bull, well done.
Sorry, old chart attached...just bring up the current one from direct broking and you'll see what I mean.

On top of that - did anybody else see the beautiful head and shoulders on beagles chart? Quite anti-bullish indicator.

[winner69]

On top of that - did anybody else see the beautiful head and shoulders on beagles chart? Quite anti-bullish indicator.

As long as it's not an abandoned baby pattern we'll be OK

They truly awful those abandoned babies

There was a beautiful haed and shoulders pattern on the A2 chart when the price was about $8 ...remember it well

[BlackPeter]

As long as it's not an abandoned baby pattern we'll be OK

They truly awful those abandoned babies

There was a beautiful haed and shoulders pattern on the A2 chart when the price was about $8 ...remember it well

Absolutely ... you will get one at any change from uptrend to downtrend and the inverse pattern on the way back.

Sometimes trends change often ... :

[bull....]

Technically, the 100 day MA has been a good reliable indicator of new momentum or broken momentum over the last 5 years.
Momentum looks broken to me on the chart now. I might take a small stake when it breaks back up through the 100 day MA.
Smart move shorting this breakdown Bull, well done.
Sorry, old chart attached...just bring up the current one from direct broking and you'll see what I mean.

your chart is nice and shows the break well , not something i use for my timing though m/a are lagging indicators but they good if you use a longer time frame. i trade it so the trailing stop i use is currently sitting at 18.80 protects the profits and maintains disapline

my entry was based on the break of the consolidation between 21.30 / 20.40 to the downside coinciding with not so good earning report etc