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
DISCLAIMER
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:
Interesting story how Chipotle tries to fight back from their E.coli scandal
A good summary how the big UK banks are currently doing
According to the WSJ, stock picking is dying (search for headline)
Bill Ackman has seen better days indeed.
Why mechanical watches still go strong in the digital age
12 essential aspects of platform businesses
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.
Some of my readers might remember that I looked at Delta Lloyd a long time ago as it was one of David Einhorn’s top pick back then, but we didn’t like it back then.
A quick look at the chart shows, that the problems I had identified were indeed there and the stock never really recovered:
Rocket Internet’s startup factory is really struggling
The mad world of the bottled water business
Good Bloomberg post on UK star asset manager Neil Woodford
Interesting post from Farnam Street on Jared Diamond and “how to get rich”
Clayton Christensen’s “Talk at Google” on growth and how to sustain success
There will be more mergers in the Asset Management industry
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.
First a big “thank you” to the reader who sent me an EMail and pointing me to this book.
Everyone who works in a big company knows the feeling: You had a really stressful day with many meetings etc. but by the end of the day you go home and are frustrated because you got nothing done. Or you have those colleagues who are always busy but if you need something from them, you never get an answer. Or you have been watching the Bloomberg screen on a really bad day all day long and achieved exactly nothing.
Performance:
In Q3 2016, the portfolio gained by +7,5% vs. +7,7% for the benchmark (25% Eurostoxx 50, 25% Eurostoxx small 200, 30% Dax, 20% MDAX).
YTD the score is +5,9% vs. -2,5%, since inception (01.01.2011) +121,8% vs.63,5%. As always Quarter & YTD numbers are very volatile and can easily fluctuate +/- 5% on relative basis in very short time.
The detailed month-by-month table, graph and links to all the reviews can be found on the performance page.
My subjective “Peer Group” has done like this YTD:
Partners Fund TGV: +6,9%
Profitlich/Schmidlin: +0,2%
Squad European Convictions +9,3%
Ennismore European Smaller Cos +13,3%
Frankfurter Aktienfonds für Stiftungen +3,5%
The best performing shares in the portfolio in Q3 were:
First things first: Deutsche Bank
I had a post in February last year why investing in something like Deutsche bank is maybe not a good idea. But still, as I said in February this year, I don’t think Deutsche Bank will be the next Lehman Brothers.
However the internal Memo from John Cryan is clearly not a good sign. Not the text of the memo, but the fact that he had to send out one (again). Similar to Dick Fuld back then, Cryan blames “speculators” for the stock price drop. Interestingly he didn’t say “short sellers”. Maybe this has to do with the fact that Deutsche Bank itself has around 106 different disclosed short positions on stocks according to the Bloomberg function SPOS.
The big difference to Lehman in my opinion is liquidity.and the general market environment. As a universal bank they have much better access to (guaranteed) deposits and overall the market still looks relatively stable.
So one could ask: After losing -50%, is Deutsche Bank now a good (Value) investment ? I honestly don’t know. For me, a value investment is an investment I can actually value with a “Margin of safety”.
value and opportunity 