Ben Horowitz these days is known best as co-founder of Venture Capital firm A16Z or Andreessen & Horowitz. He is also famous for being an early employee of Netscape and founder of a company called Loudcloud and then Opsware which he sold to HP for 1.6 bn USD.
Forager with a mini case study on how a good business can quickly deteriorate
An analysis of TABS Holland, a pretty obscure stock from the Netherlands
Notes from the “Capitalize for kids” conference (Einhorn)
An interesting slide deck on High Frequency Trading
Prof. Damodaran thinks Bitcoin is a currency (and not a very good one), not an investment. Plus a follow up.
There is too much money in Venture Capital these days
Must Read: “How to remember what you read” from Farnam Street
When I first reviewed Trivago in March this year, the company looked like an unstoppable growth machine, although much too expensive. Looking at the stock chart we can see that the stock almost doubled after my write-up but then lost 2/3 since its peak in July and now trades -40% against the IPO price 11 months ago:
So what happened ?
In July, Trivago came out confirming their earnings guidance 2017 with +50% in sales and increasing margins. In early September, after the stock had dropped already significantly, they came out with this warning:
Quick Home Capital Group follow-up:
After my first post about Home Capital Group, a reader recommended to look at the KPMG report on Home Capital Group. This document can be easily obtained via a dedicated Home Capital Short Seller website hcgexposed.com which seems to be run by “famed” short seller Mark Cohodes.
I am a big fan of actually reading documents so I did read it fully (its only 20 pages).
My summary is as follows: Yes, there were serious deficiencies in HCG’s underwriting process. At its core, management emphasized volume growth above anything else and controls were not adequate.
The core issues of the “documentation fraud” is summarized as follows:
Why investing and Quantum Physics have a lot in common (h/t Valueinvestingworld)
Mark Cohodes vs. Warren Buffett (Home Capital)
A deep (and disturbing) look into the matress online business
The curious case of the BINDQ liquidation trust
Interview with Danny Meyer, founder of the Shake Shack chain
Interesting thought: Cryptocurrencies are “Non-Financial Collective Equity”
Graham & Doddsville Fall 2017 edition
Background:
Home Capital Group is a Canadian bank/mortgage lending company founded in 1986 and run by the same CEO for 30 years, which came into the spotlight over the past few months. It ran into trouble, almost imploded and then got saved by no one other than Warren Buffett (and Ted Weschler).
There is good coverage following this link. The story in short:
Home Capital wanted to aggressively expand into insured mortgages. However at least one underwriter collaborated with mortgage brokers to get mortgages approved without proper documentation. At some point regulators reigned in but management did not tell shareholders about it. Then the regulator got tough and management had to go. In the meantime, short-term financing was pulled and the company got into real liquidity troubles.
Geoff Gannon has been writing a lot this week: The Danger of holding onto great stocks, why you should avoid the value investing crowd and his 4 favourite blogs
Seth Klarmann’s Baupost is holding a lot of Puerto Rico debt
John Kingham looks at five “high yielding” UK stocks
Eddy Elfewnbein’s high quality stock watchlist
David Rubinstein interviews Masayoshi Son (Softbank)
A good overview of the Internet economy in China
Some interesting thought on “Must happen” mean reversion
A friendly reader had mentioned Trisura as a potential Spin-off opportunity in the comments and the stockspinoffinvesting blog mentioned it a few days ago and linked to a Seeking Alpha write-up.
At first sight, Trisura indeed looks interesting:
This is from the listing prospectus:
Invest like Warren Buffett but don’t eat like him
Notes from the “Great Investors Best Ideas” conference
Notes from the Sohn San Francisco conference
Will Google become the next Apple ?
An interesting experiment: “Word mining” of management statements
Shopify: A great business or a “get rich quick scheme” like Herbalife ?
Perfomance 9M 2017:
In the first 9 months of 2017, the blog portfolio gained +18,1% +18,5% (including dividends, no taxes) against 15,1% for the Benchmark (Eurostoxx50 (Perf.Ind) (25%), Eurostoxx small 200 (25%), DAX (30%), MDAX (20%)). Since inception, the score is now +178,2% 179,1% vs. 95,1% for the benchmark. The full details (and graph) as always on the performance page. (adjustments for TGV Partners final 30.09. valuation)
In the third quarter, the portfolio underperformed the benchmark significantly (+1,8% vs. +5,33%). Several of my larger positions did not very well in this quarter.
value and opportunity 