Time flies !! 5 years of Value & Opportunity

Almost exactly 5 years ago the first post (still in German) went online.

Those anniversaries are always a good occasion to step back a little bit and reflect what happened and what changed.

Big “Thank you” to all readers !!!

First of all, I want to say “Thank you” to all my readers. Especially for those who comment on a regular basis because this feedback is really important. It is like having a really sophisticated investment committee to which I have to “Pitch” my ideas where any weak point will be highlighted directly. Also a big “thank you” to all readers who send me Emails. Actually I feel more motivated than ever to continue with this “hobby”, so let’s look forward to the next 5 years !!!

Blogging Highlights 2015

1. David Einhorn himself commented on my post. Honestly, I don’t think the post was that brilliant but I guess it hit a nerve even with this billionaire hedge fund investor. As I have said many times, I do think Einhorn is one of the very good HF investors. He really had a hard year. If I would be responsible for allocating money to hedge funds, I would actually increase my investment as good managers very often come back strongly after a bad streak.

2. The Globo PLc story was also a rather obvious case and not such a brilliant analysis. Nevertheless for some reason Globo had been a value investor favourite. There were a lot of things to learn. I think the main learning for me is that even very good investors with intensive contact to management can be fooled by crooks big time.

3. Avoiding Energy investments such as Cheniere Energy despite “Uber Gurus” like Seth Klarman and Carl Icahn investing heavily

Overall I think my major achievement in 2015 was to convince myself to be less hectic and take more time to make decisions, both for buying and selling positions. I think this takes out a loss of stress and over time should translate into better returns after tax and less “Behavioural mistakes”.

The “Top 10 most read posts” in 2015 were:

1. How to correctly calculate Enterprise Value
2. P/E, EV/EBITDA, EV/EBIT, P/FCF – When to use what ?
3. Operating Cash Flow and interest expenses – (ThyssenKrupp vs. Kabel Deutschland, IFRS vs. US GAAP)
4. Dear David Einhorn: Why are your interns doing all the cost of capital estimates (Consol Energy) ? (2015)
5. Buffett & Munger on Cost of Capital: Don’t listen to what they say but look at what they do (2015)
6. Globo Plc – Value superstar or too good to be true ? (2015)
7. “Risk free” rates and discount rates for DCF models
8. Why on earth is Seth Klarman investing 1,7 bn USD in Cheniere Energy (LNG) at 7x P/B ? (2015)
9. Deutsche Pfandbriefbank AG “forced IPO” – “Superbad” or interesting special situation ? (2015)
10. https://valueandopportunity.com/2015/04/24/aercap-holdings-nv-isin-nl0000687663-how-good-is-einhorns-new-favourite/ (2015)

Interestingly, the top 3 posts are “old” general posts that seem to be quite popular even 3 or more years after I have posted them.

5 years ago:

As I have mentioned many times, on of the great things about blogging is that I can easily check what I have said and thought 5 years ago and compare it what I do and know now. If I look at our first portfolio, many of the stocks we bought back then would now not pass my (improved) filter.

For instance today I would not touch today:

Buzzi SpA – too capital intensive
Bijou Brigitte – Retailer in decline are rarely good investments
Ensco/Noble – cyclical commodity business, doesn’t matter if Einhorn owns a stock or not
Westag – mediocre business
Einhell – weak business model
Tsakos – why the hell did I own that ?

The good thing at that all shares were cheap, so I made money on some of them and only lost a little on the really bad ones like Bijou and Tsakos.

But why did I buy them back then and why wouldn’t I invest now even if they were cheap ? The reason is that back I looked too much at Price/Book ratios, dividend yields and trailing earnings. I even looked a lot at net-nets back then. I didn’t consider other aspects as business models, competitive environment and capital intensity as much as I do now. Interestingly my relative performance was best in 2011 and 2012, however looking back this was much more due to timing and luck and less skill.

I think I was very lucky that I started the blog when everything was cheap and one couldn’t make that many mistakes or you even made money with mistakes. And mistakes there were many…

Some of my biggest mistakes over the 5 years:

1. Trying to “play” distressed debt (Praktiker/IVG)
2. Thinking Kabel Deutschland was too exensive at 30 EUR and going short
3. Thinking the Bankia IPO could be interesting (wipe out for shareholders soon thereafter)
4. Investing in European utilities as sold long term inevstments
5. Assuming Netflix is expensive at 133 USD and going short ( I still made money on it…, Now at around 800 adjusted for split…)
6. Buying RWE as “opportunistic investment” in 2011
7. Selling many stocks too early (Total Produce, WMF, Dart Group)
8. Rejecting a couple of multibaggers (Conduril, Reply, Washtec)
9. Not buying more of the good stocks (Perrier)
10. Thinking I could pick stocks in Russia (Sistema, ouch….)

I think one of the reasons that I still performed well was that I mostly corrected those mistakes quickly. I sold most of them relatively soon sometimes even at significant losses. For me “doubling down” is a very bad strategy. It might work for some people but in general selling losers is the better and safer way.

Although I made a lot mistake, I avoided a lot of potential “traps” by improving my filters. Luckily I avoided mostly anything to do with Solar, China, Greece, Commodities, Utilities.

Best learning experiences

From my own perspective, I think the major “development” over those 5 years were the following

A) keep stocks for longer if they perform well
B) improve “filter” for aspects
C) trade less, don’ worry too much about short term market movements

We’ll see how the next 5 years will go……


  • congrats! Looking forward to rounding up the decade 😉

  • Ich gratuliere Dir zu dieser tollen Arbeit. Es ist schon allein bemerkenswert, daß es jemand schafft 5 Jahre lang seinen Blog zu pflegen. Und das auf diesem hohen Niveau. Wir können alle nur hoffen, dass es so weitergeht, wie bisher. Danke dafür!

  • Auch von mir vielen Dank für diese grandiose Arbeit. Ich persönlich finde in der gesamten Wirtschaftspresse (FAZ, Handelsblatt, Wiwo) nicht annähernd eine ähnliche Qualität über Unternehmensbewertung und Investieren im Allgemeinen wie in diesem Blog. Hat alles hier fast einen ähnlichen Lernwert wie die Buffett Geschäftsberichte:-). Freue mich immer über neue Einträge. Würde sogar dafür bezahlen (kleiner Tipp für eine Monetarisierungsstrategie:-). Der inhaltliche “Moat” ist jedenfalls eindeutig vorhanden!

  • Definitely the best blog out there. We have similar views ion investing and I’ve really learnt from you in the last couple of years I,ve been reading you. Hopefully we will all be here for the next 5 years.

  • Congratulations and thanks mmi ! 😉

  • Thanks and congrats.

  • Congratulations mmi!

  • Another congrats from me! High quality and I cannot believe its free of charge. 😉

  • Congratulations! In February I will have my own 5 year blog anniversary. In my opinion your blog is the best finance blog in Germany by far!

  • I find this statement highly interesting:

    “But why did I buy them back then and why wouldn’t I invest now even if they were cheap ? The reason is that back I looked too much at Price/Book ratios, dividend yields and trailing earnings. I even looked a lot at net-nets back then. I didn’t consider other aspects as business models, competitive environment and capital intensity as much as I do now. Interestingly my relative performance was best in 2011 and 2012, however looking back this was much more due to timing and luck and less skill.”

    How should I understand that?

    You had the best return without having any skill by picking cheap stocks and now, today, you prefer to have investment skills but with that you have then also accept to get less return?

    Does it have something to do with sleeping well at night?

    • #Fredrik,

      no it does have to do with the fact that sometimes you can make money (or don’t lose much) in investing just because you are at the right place at the right time.

      But this is not something which will work over long periods of time. With my initial approach, the returns in the 2013-2015 period would have been most likely a lot worse. You can see this by the way often with some hyped up fund managers which then get killed when the markets turn south. There is no guarantee that I won’t get killed in the next downturn, but I think the propbability is lower than in the past.


  • Thanks for the many insightful posts. Good luck with the next five years too.

  • mmi,

    Thank you for your always interesting blog and informative links.

    I did not expect: “The conclusion is that if an investor was somehow able to avoid the 25% most profitable stocks and instead invested in the other 75% his/her total gain from 1983 to 2007 would be 0%.” The Capitalism Distribution, Observations of individual common stock returns, 1983 – 2007.


  • Let’s do it together ! thanks MMI and all others !

  • Congrats and Frohe Weihnachten!
    Best Blog around!

  • Congratulations to 5 years of sharing your research and thoughts on investing. Thank you for finding a good balance between number crunching and more qualitative aspects – very enjoyable. Keep up the good work!

  • Thanks a lot for all the entertainment and information!! Looking forward for the next five years…

  • Congrats mmi on a half decade well done. Keep up the good work as long as you enjoy it.

  • Danke Dir, für den Aufwand den Du betreibst um deine Investmentstrategien mit uns zu teilen.

  • Thank you very much for all the time & effort you put into your blog and for sharing!! Really enjoy it.

  • Congratulations. An excellent job! Amusing and readable. Very practical. I love it!
    Happy holidays from the US!

  • Congratulations! My favourite blog as well!

  • Herzlichen Glückwunsch zum Blog-Geburtstag und vielen Dank für die immer wieder neuen, spannenen Analysen und Gedanken.
    Und Vielen Dank für stets faire und hochwertige Diskussionen!
    Wenn ich die persönlichen Highlights deines Blogs für mich zusammenfassen will:
    – Die Fähigkeit, Geschäftsmodelle zu analysieren und zu verstehen, die nicht nur spannende Aktien “entlarvt”, sondern auch mein Denken deutlich weiterbring – Danke dafür!
    – Die Fähigkeit, grundlegende Themen der Unternehmensanalyse zu diskutieren, sowohl sehr tiefschürfend als auch gut verständlich, die ihresgleichen sucht! Deine “alten” TOP3 sind ein hervorragender Beleg dafür, ebenso deine Serie zu Pensionslasten! Ich freue mich schon auf die nächsten Artikel in dese Richtung.
    – Die Fähigkeit der Selbstkritik und Offenheit für Kritik, die so wichtig und doch so selten ist. Ein offenes Musterdepot zu führen lehrt einen diese Form von Demut, aber man muss es auch durchhalten.
    – Eine Ausdauer auf hohem Niveau, die ihresgleichen sucht. Du hast das “Armchair investing” auf neue Höhen geführt. 🙂

  • You bring up many excellent and helpful points here every time. I learn something from every single article you posted.

    BTW Happy to hear about your I approach to doubling down. Whenever I doubled down, it ended in regret. It is much better to look for more sound investments, to recover the loss.

    Alles Gute zum neuen Jahr!

  • Congrats! I agree this is one of the best blogs out there. Keep up the great work!

  • Congratulations Andy! Go ahead for the next – at least – 5 years!;-)

    Sent from my ALCATEL onetouch idol 3

  • Congratulations and best wishes!!

  • Congrats, mmi.

    Agree 99%, except investing in Greece. There werden bargains and it was the besteht market for me. In the comments I pitched Folli Folie @ €4.40 Still belief risk reward was great at this price.

  • Thank you for putting in the tremendous effort of running this blog! I cant think of any other investment blog on the web having such a quality and consistency!

  • Congratulations MMI and thank you for your excellent blog,it’s the first i check out every day!
    Your pieces on Admiral for example helped me make the decision to buy that,and even if i’m not interested on the spesific stocks you talk about the blogs are always an interesting read,thanks!

  • Congratulations!

    Your blog was one of the first ones I read and it is still one of my favourites.

    I have learned very much about investing from reading your blog, so a


    for sharing your investment approach and your ideas.


  • Congratulations for your excellent job! Keep on just doing more of the same (independent high quality research)!

  • Hi

    I just wanted to say thank you for all the time and effort you put in. Your blog is one of the best that I follow and you are very generous with your ideas. Frohes Weinachten.



  • Congratulations – it’s my favourite blog! I am looking forward to the next 5 years.

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