6 years of Value & Opportunity

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Exactly 6 years ago, the first (German) post of this blog was “released” into the WWW. As I have done in the past years, this is always a good time to reflect about happened over the year.

Again a big THANK YOU to all readers and especially those who actively contribute by commenting (critically) or sending Emails. I think without this input, the quality of the blog would not be the same or even the blog wouldn’t exist anymore.

Knowing that many smart investors read my post and contribute via comments or mails is really a very big part of the motivation to keep this blog up and running. Thank you again !!

So let’s move to the highlights of 2016:

Top 10 most popular posts written in 2016

1. Novo Nordisk – Great Compnay but also a great Investment
2.Uniper/E.ON Spin-off: Take one ugly Duck and transform into ….. 2 really ugly ducks ?3. Capital Allocation & Capital Managament – what is good and what is bad
4. A few Thoughts on Banking Stocks (Lehman 2.0, Deutsche Bank)
5
AQ Group (ISIN SE0000772956) – A 15 year “42- Bagger” without a Moat ?
6. Kinder Morgan (KMI): Asymetric Upside Potential
7. David Einhorn: Nice Q4 Lette but E.ON as a long Pick ? Really ? C’Mon !!!
8. Coface SA (ISIN FR0010667147) : Ultimate Death Spiral or Contrarian Opportunity in an attractive industry ?
9. Amercian Express (AXP) – Cheap “Buffett” Blue Chip or Value Trap ?
10. Armageddon Alert: WILL “Brexit” create a Black Hole that swallows Planet Earth & the Universe ?

It is interesting that mostly “big names” like Novo, Amex or Einhorn draw the most readers. Even more interesting is that some old general topic posts like “How to calculate Enterprise Value” still get clicked 5-10 times more often than the Top 10 from 2016……

Mistakes made in 2016

Buying Aixtron as a special situation without more research. I was only lucky to get out with a small loss. The timing of the Hornbach sale was very unfortunate after holding it for 5 1/2 years. Also the sale of Citizen’s, despite the nice profit was clearly too early and I missed out another 20% of the “Trump Rally”

Buying more Lloyd’s Bank after the Brexit was stupid. Banks always get punished and I underestimated the weakness of the pound.

And yes, buying Deutsche Bank in the beginning of October would have been a very good performer for “Hindsight Capital LLC” my new 100% p.a. vehicle.

Lessons learned

 

The biggest learning this year was clearly:that it is very hard to predict what will happen on a macro level. Who would have thought that we will have the Brexit and Donald Trump us US president ? But even harder is to predict what markets would do when those events happen.

If you would have told me end of last year that those events would happen and  I had to decide to invest for the full year or being not invested at all, I would have gone for the latter. Looking back, this would have been a big mistake.

So I am happy that I don’t have to earn my money with predicting macro events or timing stock markets.

Company analysis

Regarding company analysis, I think my best analysis (or at least the ones that I had the most fun) were Silver Chef, DOM Security and Majestic Wine which all became part of the portfolio.

Overall I managed to do ~23 deep dives in this “blogging” year which is pretty OK.

Favorite Books

Among the 12 book reviews this year, my personal top 3 were the following:

Capital Returns (Marathon Asset Mgt.): Great and funny letters of Marathon Asset Mgt.

The Shipping Man: This cured me from ever looking at shipping stocks

and Shoe Dog, the autobiography of Phil Knight, founder of Nike.

Goals for 2017

 

According to the bible, the seventh year is the one where one should rest and do nothing. So far I do not plan to rest. 2 company analysis per month seems to be a very reasonable target. I do have a pretty long “to do” list which got even longer after the “12 ways the ideal company should be run” post.

On the other, hand, I do plan to move forward with a plan in 2017 that I had for a long time: I want to write a book. This might mean a somehow slower frequency for blog posts. And don’t worry: It will not be the 93rd book on Warren Buffett….

 

30 comments

  • I don’t comment often but I read it all. Congratulations and thank you for running a great blog and sharing your thoughts & ideas!!

  • Congratulations! Your blog combines two extremely rare talents in the investment world: truly independent thinking and a knack for expressing complex issues in a succinct and simple way. There is no blog out there I enjoy reading more. Looking forward to your book!

  • 6 years, congratz! An eternity in the financial world. Please continue. Will be buying the book, for sure

  • Congratulation and thank you, for a lot of points!
    – For me your blog is still the most interesting blog in financial themes.
    – You are a great “teacher”in showing how to analyze companies, how to think about it. There is a good reason that your articles about calculation enterprise values (and probably others of that chapter too) is still a runner – it is about the best you can read.
    – From your blog I first heard about “antizyklisch investieren”, a board I learnt to love!
    – Don’t bother about Deutsche Bank – this share didn’t fit for your risk profile. Investing is not only about percentage gained but also about the risks you want to take, the kind of risks you can ccalculate. And for “Hindsight Capital LLC” you should have gone in BW Offshore – when we discussed about it, the share was about 70% cheaper than today.

    In dem Sinne: Gesegnete Weihnachten und auf viele weitere spannende Denkanregungen und fruchtbare Diskussionen!

  • Congratualations! I am looking forward to reading your book! Please, keep the blog going 🙂

  • For 2017, I wonder if there are any blackswans in the pipelune, like brexit/trump in 2016. Timing has been the best value driver for me in 2016… 😉

    • The darkest swan I see in 2017 is the potential independence of Catalonia. How many of you did bet for Brexit? How many for Trump? Are you ready for Catalan independence? 😉 !

  • Your investment thesis generation and knack for finding companies throughout Europe is unparallelled in the bloggosphere, keep up the good work!

  • I actually am looking more for your (good) posts than for your book (are your readers allowed tobe honest?).
    There are great books out there already, but great blogs are scarce!

  • Congrats and on to the next 6 years! 🙂

  • Congratulations!!!
    Can you share the topic of the book?

    • Thanks. And the book: It will be about Investing 😉

      • @stritlyValue: wikileaks leaked the book title a couple of days ago. They said: How to become a billionaire (seriously)! Subtitle: Without doing anything and knowing nothing, in one year! :-p Or: What REALLY Works on Wall Street! – Trading technics for lasy people.

  • congrats MMI. Always a pleasure to read you. You’re truly a source of inspiration.
    Keep it up!

  • Congrat. Great blog, Reading every post

  • Congrats. Been reading for a few years now. Definitely one of the best blogs out there. All the best for the book.

  • Congrats.
    Pfanbriefbank had some interesting news recently. Goes to show there are many risks lurking under the ground for banks.
    The direction of the pound was no mistake of yours in my opinion. Either hedge or be happy anyway. Your horizon is long enough, that the judgement is still way out.

  • 6 years already Memy, keep up the good work and good luck for the next 6 years.

  • You said here:

    “Again a big THANK YOU to all readers and especially those who actively contribute by commenting (critically) or sending Emails. I think without this input, the quality of the blog would not be the same or even the blog wouldn’t exist anymore.”

    But you said in reply to a critical comment on the Provident Financial Post:

    “And a small hint: The blog is for free and no one forces you to read it. If you don’t like it, don’t read it.”

    So which one is it?

    • I am not MMI (btw congratulations, and pop that champagne!), but I would say “both”.
      It is a matter of writing in a civilized way. A constructive comment offering potentially novel arguments is presumably very welcome. A critical comment saying mostly “you are stupid” is presumably less welcome and might trigger an angry reply.

    • In German we say “The tone sets the music”. I didn’t find the tone of your PFG comment very productive.

  • Congratulations for your anniversary. I’m looking forward to your book 🙂

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