VICOM

Really glad to have this part of my portfolio

If Sir Isaac Newton lives today he might have doubts over the laws of gravity as Vicom defies gravity!

(11-07-2011, 10:11 AM)violinist Wrote: If Sir Isaac Newton lives today he might have doubts over the laws of gravity as Vicom defies gravity!

Since when and who says the Law of Gravity applies to stocks? Stocks are not physical elements and do not have actual weight!

(11-07-2011, 10:20 AM)dydx Wrote:

(11-07-2011, 10:11 AM)violinist Wrote: If Sir Isaac Newton lives today he might have doubts over the laws of gravity as Vicom defies gravity!

Since when and who says the Law of Gravity applies to stocks? Stocks are not physical elements and do not have actual weight!

Sir Isaac Newton applied his theory to South Sea Company and lost his fortune.

South Sea Bubble

Flashback to the early 1700s. England was in a spot of bother having sent itself broke fighting a war involving the French, Spanish and money. The government approached the South Sea Company to help them out, and put conditions in place to attract investors. People always want to make a quick buck, and the investors enthusiastically invested – in droves. From the story in stockmarketcrash.net (link no longer available):

Speculation became rampant as the share price kept skyrocketing. It was thought that this company “could never fail”.

One of the main money-making ventures of the South Sea Company was trading African slaves for the Americans.
Isaac Newton

Even Isaac Newton got caught up in the South Sea mania and invested a big chunk of his fortune. Interestingly, he pulled out early (after making a respectable 7000 pounds) then went back in after the bubble continued to inflate. The inevitable bust happened and he lost 20,000 pounds – a considerable sum at the time.

As a result of this crisis, he stated “I can calculate the motions of heavenly bodies, but not the madness of people”.

I think the last statement is a good reminder to those who chase stocks and properties.

(11-07-2011, 10:11 AM)violinist Wrote: If Sir Isaac Newton lives today he might have doubts over the laws of gravity as Vicom defies gravity!

The share price is simply a function of the underlying business, and VICOM's underlying business is strong; therefore I do not see why physics laws should apply to share prices. Just focus on the business, and if the business does fine, the share price will follow.

(Not Vested)

Vicom FY 2010 EPS was 25.67 cents. If Vicom chooses to raise its dividend payout ratio to 80%, it would have paid out 20.5 cents last year. This translates to a yield of 5.7%. A number of large REITs generate dividend yield of 5.5 - 6.5% but with close to 100% payout ratio, little organic growth and high debts. Vicom, on the other hand, is debt-free, with 60 cents per share worth of cash, strong organic growth with profits rising annually and a resilient business. So I can see why people still choose to buy at this price.

(Vested)

is the current price too steep to add a few more lots?

(14-07-2011, 03:23 PM)Zip113 Wrote: is the current price too steep to add a few more lots?

That would depend more on the valuation of the Company, as well as its dividend yield and its business model. Assessing those factors would give you a reasonably clearer picture as to whethe to invest, or not.

(Not Vested)

(14-07-2011, 03:33 PM)Musicwhiz Wrote:

(14-07-2011, 03:23 PM)Zip113 Wrote: is the current price too steep to add a few more lots?

That would depend more on the valuation of the Company, as well as its dividend yield and its business model. Assessing those factors would give you a reasonably clearer picture as to whethe to invest, or not.

(Not Vested)

Hi Musichwhiz,

I hope this doesn't come across the wrong way.
You seem to really like this company and agree on many of points that this is a great company. May I be so curious as the ask the reasons why you are not vested in this company?

Would be interesting to see this from your perspective and why it may not be a pitch that you would want to swing at.

(14-07-2011, 03:44 PM)corporatefatcat Wrote: Hi Musichwhiz,

I hope this doesn't come across the wrong way.
You seem to really like this company and agree on many of points that this is a great company. May I be so curious as the ask the reasons why you are not vested in this company?

Would be interesting to see this from your perspective and why it may not be a pitch that you would want to swing at.

Haha, I am not a "car" person. And this company deals with cars and car inspections as the main bulk of its business!