Insurtech Massacre part 3 – Lemonade & Churn, churn, churn !!

Long time readers know that I have a soft spot for insurance companies. Some weeks ago, I started looking into Insurtech companies and then I looked into Lemonade’s 2021 earnings. Since my first post, Lemonade has lost another 1/3 of its value and is now significantly below its IPO price.

What I like about Lemonade is that they indeed created a “fresh” insurance brand, however the numbers were clearly challenging. My main takeaways from last time were as following:

  • Growth is slowing
  • marketing cost is increasing (per new dollar premium)
  • The business is not really scaling

Already a week ago, Lemonade issued its Q1 earnings. This time, I have compiled a few line items that I find interesting on a quarterly basis in order to analyze things more deeply:

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Some links

Nice write-up on Apollo Global (although I would not invest there)

An interesting essay on streaming – Unbundling vs. Bundling etc. from the former CEO of Sky

NotBoring on the Terra-Luna implosion

Why the US has an infant formula (milk powder) crisis

The UndervaluedJapan Blog celebrates its (slightly frustrated) 10th anniversary

Rare feature on Chris Hohn (TCI Fund)

John Hempton is angry about the Management of Swedish Match because of the proposed take over

All Danish Stocks part 7 – Nr. 61-70

Looking at randomly selected Danish shares is a nice exercise in order to calm one#s nerves during times like these. here is yet another batch of 10 Danish shares. This time, two of them I found worth to “watch”, for one of them i even started an initial position.


61. Genmab A/S

Genmab is a 18.4 bn Biotech company that manufactures among other stuff antibodies that are used for cancer treatment. The company is extremely profitable, with net margins between 35-60%. 

At 50x 2021 earnings and 17x revenues, the stock is not cheap, despite a drop in profits in 2021.

The share price has corrected a little but investors that hold the stock for a few years should be still very happy:

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Some links

There is some evidence that “Bond King” Bill Gross was indeed a great bond investor

Wired story about Shein, the Chinese Ultra Fast fashion company

A not so positive take on Spotify

Some very deep (and not very optimistic)  thoughts on inflation by Prof. Damodaran

A nice pitch for Medios AG from VERUS (German)

Nice post on some lessons learned from “master capital allocator” Tom Murphy (Capital Cities)

A good thing to remember: Warren Buffett’s (short term) market timing skills are not that good

More thoughts on Inflation (Linkers, Pension liabilities, highly indebted Countries)

As inflation is something that we haven’t seen for a few decades, I am still trying to get my head around this trying to understand how this could influence investments going forward.  In this posts I just wanted to touch three areas: Inflation linked bonds, pension liabilities and highly indebted countries. 

  1. Inflation linkers

When looking for assets that gain or at least compensate for inflation, one should not forget Inflation linked bonds. Per construction, they compensate at least fully for the officially measured inflation.

In addition, Inflation linked bonds function also as an instrument to observe “implied” inflation rates, I.e. the market price of an inflation linked bond contains the investor’s expectation for future inflation rate.

The German agency for debt has a good page (in German) that explains how these securities work. One thing to mention is that most bonds are linked to Eurozone inflation, not German inflation.

Looking at the detail page of the 2033 linker we can see that this bond carries a 0,10% coupon and trades at a yield of -1,73%.  Comparing this with the 2032 fixed rate bond (there is no 2033 fixed rate Bund) that yields around 1%, we can estimate that the difference between the two yields (1-1,73%)= 2,73% is the market’s current estimate for the inflation in the Eurozone for the next 10 years or so. (Remark: in reality, this is more complex, see for instance here, but for this exercise it is good enough).

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Some links

A Netflix Doku on Abercrombie & Fitch looks like  a “must watch” for any investor interested in retail stocks

The ProfitHunting blog on Aussie LNG player Woodside Energy

A good reminder that consistent outperformance of active fund managers is the wrong metric to focus on

Great take on Twitter by Prof. Damodaran and some very strategic thoughts on Twitter from Ben Thompson

Interesting background story on vending machines

The Q1 report from Bireme is worth reading (Netflix)

Kerrisdale is short the “Trump SPAC”. Even among all the shitty SPACs, this one smells especially bad

All Danish Stocks part 6 – Nr. 51-60

And another batch of 10 randomly selected Danish shares, this time, none of them made it onto the watch list. We have now covered almost 1/3 of all Danish stocks.

51. Ringkjøbing Landbobank A/S

Ringkjøbing Landbobank is a 3,3 bn EUR market cap bank active only in Denmark, that is surprisingly profitable with a ROE of ~15%. This is reflected in a very good share price performance and a rather high valuation at 20x trailing P/E.


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Back to Denmark with a new batch of 10 randomly selected shares. What I have to say is that the Danish stock maket really offers a wide variety of companies. From a Fintech active in Africa, via shipping and concrete blocks over to Medtech, today’s selection has a lot of different business models. Four of them I found actually worth to “watch” this time.


41. SPENN Technology A/S 

SPENN is a 80 mn EUR market cap company that seems to offer a banking/trading app. The majority of the business seems to be in Africa (Zambia, Rwanda) via a company that was acquired in 2021. their offering seems to comprise (of course) Blockchain, Crypto, Payment and remittance services.

The stock chart looks quite uninspiring:


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Some links

A Netflix pitch from Bireme Capital and a conversation with Evan Tindell from Bireme 

A very good overview on “customer based valuation” for fast growing companies

Five timeless investing lessons distilled from Arlington Value’s investor letters

Four easy ways to combine Value and Momentum

Some insights from Ben Evans how online marketing is evolving (and killing TV)

Interesting story on 30 year old Crypto Billionaire Sam Bankman-Fried

About that LME Nickel Short Squeeze and the potential consequences

Performance Q1 2022 – Comment: “Podcasts & Inflation”

In the first 3 months of 2021, the Value & Opportunity portfolio lost  -6,6% (including dividends, no taxes) against a loss of -8.6% for the Benchmark (Eurostoxx50 (25%), EuroStoxx small 200 (25%), DAX (30%), MDAX (20%), all TR indices).

Links to previous Performance reviews can be found on the Performance Page of the blog. Some other funds that I follow have performed as follows in the first 3M 2022:

Partners Fund TGV: -20,09%
Profitlich/Schmidlin: -3,67 %
Squad European Convictions -6,4%
Ennismore European Smaller Cos +0,42% (in EUR)
Frankfurter Aktienfonds für Stiftungen -4,29%
Greiff Special Situation -1,42%
Squad Aguja Special Situation -8,31%
Paladin One

Performance review

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