Unprofitable businesses are deflationary. An era of low interest rates has made capital cheap. The hurdle rate for lending it or investing it is low. So, investors and banks have been willing to provide equity and debt financing to businesses with no plans to be GAAP profitable for a very long time, like Tesla (TSLA), Uber (UBER), and so forth. Even fast-growing Netflix (NFLX) is free cash flow negative year after year and literally issues junk-rated debt to fund new content. As long as the stock price keeps going up, investors are happy and executives get paid in these unprofitable business models. And as long as companies have not had to make a profit on the products and services, even after a decade or more in operation, the prices of their products tend to be cheaper than they would be in a funding scenario that requires them to make a profit. Bear markets eventually test investor patience for structurally unprofitable businesses, if stock price appreciation is the only source of financial payback.
GNBF 2018 year end earning report. Wow!
This is why GNBF is our 2nd largest holding. Either a sale or another
25% stock dividend is coming.
1) We operate with total integrity.
2) We dig deep in our chosen area of expertise. I keep expanding this a bit, possessing the ability to learn quickly, a rage to achieve mastery, and an understanding of your power zone.
3) Our fee structure is fair.
4) We know you have a long runway ahead of you and can do what is best for you, for decades—personally, professionally, and in terms of the opportunity set(s) you seek.
5) The willingness and ability to take risk, and to manage risk—very different things, both equally important.
6) The willingness and ability for us to construct a portfolio for you that will last a lifetime.
7) The willingness and ability to wear our performance on our sleeve, every day/night, and not go crazy, this is the hardest part, doing nothing, most times. Even when it seems like we are doing a lot, trading and with hedges "shorts" we in fact are not, taking on more risk, we are taking on less.
8) Ultimately, our firm possesses good judgment— “the ability to make considered decisions or come to sensible conclusion in a crowded space—not so easy to do these days!
1. Our newsletter for free.
2. Full use of our staff to get you the best prices when buying and selling small bank stocks.
3. Hedges for "shorting" we can get the shares many times when you can't.
4. Access to Douglas Hughes 7 days a week.
As a subscriber you get:
1. Daily, weekly, or monthly newsletters.
2. Potential takeover targets.
3. Dividend and buyback updates.
4. Takeover ideas.
5. Insider activity.
6. Interest rate outlook.
7. Ways to make money in smaller bank stocks with low downside risk and high cash dividends
If we lose you money we don't charge you anything, till we make it back and much more."
We live a good simple life by investing in people and bank stocks, if the bankers are honorable and have reasonable expectations for themselves and those around them. Many things are wrong in the world currently we try the best we can to make life easier and less stress full, we can be reached by phone any day of the year!
"We don't diversify when compensated well"
"Insider ownership is a must"
"A large market crash or downturn, is what rich people or soon to be rich people, hope and pray for if they have the financial resources and education to take advantage of it when it occurs" -Douglas Hughes 1999
"Banking is a weird business you are buying people and market area." The idea that a Bank CEO may do something stupid is very high."
"Banks are a hard place to invest, they can always make the short-term look brighter than it really is. We hopefully pick the right people that also have a huge stake in the bank, That's hopefully why your paying us. Usually we are right"
"The typical person doesn't want to take a loss after they just bought something, but if a better opportunity comes up with a better risk reward or the market changes that's what you have to do. To be very good at the market, you have to make hard decisions all the time and take profits and losses. You will make many mistakes, that's how the market works."
These community banks are saving hundreds of thousands a
quarter following Trump's tax cuts : QNTO, MCPH, RCBC, SCZC and
AVBH. "Don't miss the next takeover deal, 15 deals so far in 2019"
Best time to add to bank stocks in 5 years today 12/24/2018, don't
wait, buy today"
"Many Bank CEO's have been members for years"
" I used to get over 20 newsletters now I get just one, just simple straight to the point advice on investing in value bank stocks"
" I can read there letter in under 5 minutes, many letters never get to the point"
"I used to run my own money, now Hughes Management Staff does, his firm is second to none they now run 90% of all my funds and I can reach douglas hughes himself 24/7"
"Bank deal prices are climbing maybe going for over 2 times book with bank stocks going up each day!"
"A wave of deals in 2018, like nothing we have ever seen, this is your last chance to sell!"
"Almost no downside risk on the ones we recommend."
"Many are very small and very thinly traded but that's ok we love markets that are inefficient that's the only way to make real money!"
"We find banks no one has ever heard of, with 30 years working in this sector people call us!"
"We look everyday for cheap banks, everyday we compare 50 banks or more."
Copyright © 2020 Hughes Investment Management - All Rights Reserved.