I posted a post yesterday in the Hidden Gems Stocks We Like board at the Motley Fool. At the time of this journal, it had received 36 recommendations or “recs”. (For those who aren’t on the Fool boards, anyone who reads a message can recommend it. You can only recommend a post once, and you have a limited number of recs a day. The top rec earners are sometimes featured on the Fool Post of the Day or week or something).<\/p>\n
At the bottom, I also tagged Tom Gardner’s response, which was enough to make me walk around this morning feeling full of myself. It’s nice to be shamelessly self-confident now and then.<\/p>\n
<\/p>\n
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\nFolks, I’ve got a rare opportunity here. I’ve “discovered” a Hidden Gem that even Tom Gardner couldn’t beat me to: <\/p>\n
This Post (OTC:THISPOST)!<\/p>\n
Let’s break it out in true Hidden Gem format.<\/p>\n
Section 1. The Business<\/b><\/p>\n
This post has a stellar business model. Admittedly, it doesn’t have any cash flow, but that is not important in the Posting industry. It is projected to have significant income in terms of recommendations. The primary way this post garners recommendations is by being hopelessly self-referential. If done properly, this should amuse customers. Humor has been proven by competitors to lead to significant income, or “Rec Flow”. <\/p>\n
Warren Buffett often talks of the importance of having a “moat” around the business, and this post has it in spades. While the barriers to entry in this industry are extraordinarily low ($150 to the HG discussion community, lower for the wider Fool community, free trial memberships are even possible), by capturing the self-referential niche early it effectively bars other entries in the catagory. Should a competitor emerge using self-referential humor, they will be seen as “copycats” and thus earn low, possibly even negative, Rec Flow. In the old Rule Breaker parlance, this post is a top dog and first mover with gusto in an important, emerging industry. <\/p>\n
Furthermore, it currently has 100% insider holdings and no analysts follow it.<\/p>\n
Section 2. The Financials (Key Points)<\/b><\/p>\n
First off, this post has zero debt. That’s right, nada. Interested? Read on. Furthermore, its assets include approximately 243 words and 1,256 characters (not including spaces) so far. That is projected to increase 2.5 x over then next 10-15 minutes! And, it will accomplish that with no discernable capital outlay!<\/p>\n
Section 3. The Valuation<\/b><\/p>\n
This part is tricky, as all valuations are. I’m afraid there will be a bit of a \u201cpop\u201d once this post is released. As of this writing, this post has zero Rec Flow. This makes the RROA (Rec Return on Assets – 322 words and counting!) 0%. Not attractive.<\/p>\n
However, once this post hits, it’s likely to garner a rec by those who rec without studying, thereby increasing its Rec Flow by infinity percent! This should earn the recommender some enormous returns for being the fastest to rec. But after that initial \u201cpop\u201d, the next recommender will only benefit from a 100% increase in recs. Still significant, but it only gets worse from there.<\/p>\n
Complicating issues, the more I type (416 words so far), the heavier on Assets this post will get, further degenerating the RROA.<\/p>\n
So, unfortunately this post will require some quick action on the part of the reader in order to get a satisfactory return. So, stop reading! Make your recommendation NOW!<\/p>\n
Section 4. The Risks<\/b><\/p>\n
The main risk is that I continue to babble on endlessly in this post, bringing the wordcount (465) up to unmanageable levels (a common problem in rapid growth companies), such that even the early recommenders, excepting the first, will earn unsatisfactory returns.<\/p>\n
Another risk is that you didn’t recommend this message when I mentioned it in the valuation section above, meaning that someone probably beat you to the punch while you were busy dilly-dallying doing your due diligence by reading the Risk portion. Shame, for shame.<\/p>\n
Section 5. Conclusion<\/b><\/p>\n
My conclusion is that this post has rock-solid financials and a bright future in its chosen industry. I think this is best exemplified by the interview I did with president and CEO, me, transcripted below.<\/p>\n
Me:<\/b> So, you’ve written This Post (OTC:THISPOST), what are your thoughts for its future?
\nMe:<\/b> I can see this post garnering at least 10-12 recommendations in the near term, perhaps more. That’s a very solid number for a post of this sort.
\nMe:<\/b> Interesting. Are you heavily invested in this post?
\nMe:<\/b> Emotionally, yes. I will be researching whether I can recommend this post myself and get a piece of the action.
\nMe:<\/b> Doesn’t the specter of conflict of interest and insider trading bother you?
\nMe:<\/b> Well, yes, and of course I’m going to be very careful in examining the statutes, and stay within the letter and spirit of the law in that respect. But I believe in this post, I think it has a bright future, and I plan to stay the author of it for the foreseeable future.<\/p>\n
Truly, bold leadership and confidence if I’ve ever seen it. I’m labeling this a \u201cbuy\u201d. (726 words)<\/p>\n
——<\/p>\n
TMFTomG’s response:<\/p>\n
Dinoczar, as excited as I am about the post, I’m wondering if it’s possible to invest directly in the poster. You have earned a permanent slot on my list of Favorite Fools. <\/p>\n
Tom Gardner <\/p>\n
—<\/p>\n
It’s just a real good way to start a day.<\/p>\n","protected":false},"excerpt":{"rendered":"
I posted a post yesterday in the Hidden Gems Stocks We Like board at the Motley Fool. At the time of this journal, it had received 36 recommendations or “recs”. (For those who aren’t on the Fool boards, anyone who … Continue reading