Monthly Archives: October 2016

Some links

Jeff Bezos interview by Charlie Rose (h/t valueinvestingworld)

Market Folly has a good summary of pitches from the “Invest for kids” conference

The positive effects of no news (for 7 days)

Tyler Cowen on why China’s economy didn’t crash (yet)

Bill Miller explains the accelerating shift from active to passive strategies

Podcast: Barry Ritholz interviews Prof. Damodaran

Smart thoughts on if we will ever see fully self driving vehicles


Majestic Wine (GB00B021F836) – Nothing to see or potential UK “Outsider” company ?


As always: this is not investment advise. Please DO YOUR OWN RESEARCH. Never trust any “stock tips” from anyone.

A few weeks ago I already mentioned that I had invested into a UK small cap company. Because of a lack of time I had to delay finishing the write-up but now I happily reveal the “UK mystery stock”:


Majesic Wine Plc is the dominant wine retailer in the UK for “medium to higher priced” wines, from 5 GBP/bottle upwards. They run a retail chain plus a commercial service for restaurants and a “fine wine” subsidiary. They recently purchased online only wine trader “Naked Wine” but we come to that later.

Charly Munger’s mantra is “Invert, always invert”. So let’s start this one with a couple of reasons why you shouldn’t buy Majestic Wine at the moment:

  • BREXIT: This has potentially multiple negative impacts on Majestic. With a lower Pound, imports get more expensive plus a general potentially weak consumer climate could make things really difficult and squeeze margins and/or reduce volumes. On top of that, many of the bankers who might need to leave the City might be target customers
  • The overall wine market in the UK hasn’t been growing in the last years so any growth needs to come from competitors. If Wine importers need to raise prices there is also the potential of a “substitution effect” towards other, cheaper alcoholic beverages like for instance craft beer which can be made locally.
  • Current numbers do not look that good, even if one adjusts for one-offs etc. the stock is not “cheap”. The company cancelled the dividend for the current year.
  • Even before the Brexit discussion, the business had weakened. The earnings peek has been the business year 2013/2014
  • As everywhere in retail, online is definitely an issue for the wine trade.

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Double Book review: “Venture Deals” & “The Lean Startup”

Those two books might be somehow unusual for a blog dedicated to Value investing, but I do believe that especially for value investors it is very important to understand what is happening elsewhere and those two books provide plenty to learn and apply even (or especially) for value investors.

“Venture Deals  – Be smarter than you lawyer and Venture Capitalist”


“Venture Deals” is a rather technical but nevertheless very interesting book and in my opinion a “Must” for anyone directly involved in start-up funding, either as an investor or founder.

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Banking stocks part 2 – Handelsbanken, Lloyds, Van Lanschot, Pfandbriefbank, Citizen (and yes Deutsche again)

This is the follow-up post to the one from last week about banking stocks in general and Deutsche Bank in particular.

Damodaran on Deutsche Bank

Before moving on to my own stocks, again Deutsche Bank. Prof. Damodaran did value Deutsche Bank last week and came to the following conclusion:

At the current stock price of $13.33 (at close of trading on October 4), the stock looks undervalued by about 36%, given my estimated value, and I did buy the stock at the start of trading yesterday.

What he basically does is that he assumes an ROE of around 9,44% after ten years and capital costs around the same number,wich at the end of the day is assuming some kind of mean reversion and a Price to book value of ~1 in year 10.

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