Monthly Archives: November 2016

Some links

Guranteed “Trump Free”:

India has been “demonetized” this week. Interesting to see how this will turn out.

Freakonomics podcast on why expensive wines seem to taste better (and other stuff)

The Brooklyin Investor has a look a Och-Ziff, the listed US Hedge fund

Geoff Gannon is blogging again and answering questions like “How to find sutainbale profitable companies” or  “How to invest if you have only one hour a day”

Ginni Rometty (CEO of IBM) on “How Blockchain will change your life” (WSJ, search for headline
Wired podcast on why Fitness trackers seem to lose steam (Fitbit, Apple)

Staffline Group Plc (ISIN GB00B040L800) -Growth machine or Brexit victim ?

Due to the well-known Brexit troubles in the UK, my contrarian instincts seem to motivate me to look more at UK companies these days. One of the UK companies on my watchlist was Staffline Plc, a recruitment and “human resources outsourcing company”.

staffline_group_logo_low2

The company got on my radar screen because friends mentioned that it looks like an interesting company and that the have a “great CEO”.

Those are the usual multiples:

Market Cap 232 mn GBP
P/E 2015: 15,6
P/E 2016: 7,4
EV/EBIT 11,7
EV/EBITDA 7,0

The company grew sales almost 10-fold over the last 10-12 years. Interestingly however GAAP EPS in 2015 was at the level of 2006.

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Some thoughts on index funds & market efficiency (including some empirical material)

Currently there are a lot of articles in the financial press about the perceived “fight” between active and passive asset management styles.

The passive guys make the point that on average, after fees, active funds have to underperform against the index and low-cost index funds, which is difficult to counter. On top of that, “alpha” created by large active funds is not very persistent.

From the active side, there is the argument that if there is too much money invested in index funds, market efficiency will suffer and stocks will go up and down together because not enough people are analyzing single stocks. If stocks go up and down together without reflecting fundamentals, at some point in time “good stocks” should be too cheap and bad stocks to expensive. Which then should be some easy money for any good stock picker.

Is the market already inefficient ?

This argument  reasonable at first but is there any evidence that the market is less efficient ?  Let’s look for instance at the DAX 30, the major German index. It is hard to come up with good numbers but I do think that maybe between 10-15 % of the DAX is somehow invested via index funds with a clear trend towards more index ownership.

So let’s look how the DAX constituents have performed so far this year (as of Nov. 2nd). The Dax itself ytd is down -2,8% This is the YTD performance of the constituents:

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Amsterdam Commodities (ISIN NL0000313286) – a 60-bagger over 20 years -but why ?

acomo-300x98

Amsterdam Commodities (Acomo) is a Dutch based company which “trades and distributes agricultural products”.

The company went on my “to-do list” some time ago because at first glance it looked like a company which managed to grow nicely over many years by maintaining very health returns on capital.

This resulted in very healthy shareholder returns over the last years as we can see in the chart:

acomo

Including dividends, ACOMO Shareholders made 27,2% p.a. over the last 10 years and (10-bagger), 25,2% p.a. over 15 years (29 bagger) and 22,5% p.a. (60-bagger) over 20 years. So a real success story. Interestingly, despite these mind-boggling returns, only 2 analysts cover the stock according to Bloomberg.

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