Great conversation guys.I think that to class as Boring, a company needs either to not have the speculative element or to have that risk suitably discounted in the price. There is quite a distinction between those points and the board might want to discuss how we feel about risk. We should be prepared to pay a price premium for Walmart over Target because it does have less risk. Thinking about it now, I don't think that a Boring port should accept much risk at all. None of this stops us from looking at companies and assigning a price to them. The more risk we beleive they hold, or the less confident we are about our understanding, the more margin of safety we should require.It's not unreasonable to expect a company to have declining earnings in a bad economy and that doesn't affect its intrinsic value - it should be factored into the price regardless. What matters though is managements approach. Are they candid? Are they cutting costs? Are they cutting costs to inflate short term earnings at the cost of long term earnings? How have they performed in the past? A Boring company should have been around long enough that we can look at how they cope with downturns. Since downturns don't affect the intrinsic price of a good company they can provide buying oppurtunities. Hamish Rose
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