Monthly Archives: December 2015

Some links

Funny conversation between “legendary raiders” Carl Icahn and Boone Pickens

Red Corner looks at a potential interesting distribution company, Brammer Plc

Good reminder: Turn-arounds rarely turn around (Aeropostale)

Interview with Marathon Investment Management (h/t valueinvestingworld)

Why outdated technologies have such long lives

A good list of investment books from the Aleph Blog. Especially the risk books are rather unusal ones.

Interesting post on Renewable/Green Energy projects and funding costs

The Watch Series: Swatch (UHR.VX) part 2 – Capital allocation, Management & Valuation

It is time to finish the Swatch case. Let’s start with summarizing the first post on Swatch and the post on smart watches:

– I do believe that luxury watches have “staying power” and will not replaced or significantly impacted by smart watches as the main buyers are Emerging Market consumers and collectors
– If we accept that Swatch is in fact a luxury product company, there would be a clear valuation upside compared to other luxury companies
– However the lower range of their products (Swatch, Tissot, Rado, Hamilton etc.) clearly has problems which could become worse over time as the moat here is small to non-existent

So let’s look at some more aspects of how Swatch is run:

Capital allocation:

The company is run like a “family company”, very conservative and “Swiss” and a big contrast to Fossil. As mentioned in my post about the Hayek book, Hayek senior hated banks and Swatch therefore always kept a big cash buffer.

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