How Amazon, Google and Facebook created the “Trinet”
Two interesting special situations: CBS Radio Reverse Morris Trust and VICI properties
Ocera Therapeutics, a Pharma take-over with a Contingent Valur Right (CVR)
L Brands (Victoria’s Secret) looks cheap
An interesting collection of “far off the beaten track” stocks
The Venture Capital sector looks pretty screwed up at the moment
Q&A with Lou Simpson (EX CIO of Geico)
Disclaimer: This is not investment advice. PLEASE DO YOUR OWN RESEARCH !!!
Cars.com is a recent (May 31st) spin-off from publishing company Tegna, which itself is a spin-off of the Gannet publishing Group. Interestingly, Gannet/Tegna only bought control of cars.com in 2014 for a total value of 1,8 bn USD.
Cars.com – The business & Market
Cars.com is a typical “Online classified” business, meaning that it collects offers of merchandise (in this case cars), aggregates and sorts them and then shows it to as many potential customers as possible.
The economic value of such a “service” is relatively easy to explain: For a potential customer, it saves time because he can look at and compare different offers at one place. For the sellers, such a service is basically an advertising and/or sales channel which ideally reaches many potential customers.
Forager thinks that Buffett could/should take over General Electric (GE)
Interesting interview (Podcast) with famous financial author Roger Lowenstein (Buffett, Munger, Fed)
Rick Bookstaber on the current low volatility market
Risk free rates are at a 800 year low
A playbook of how the current Crypto Bubble could implode
The “Buffett of Saudi Arabia” Prince Alwaleed seems to have been arrested
Who doesn’t like to own a stock which increases by a factor of 100 ? The introduction of the book promises that it will tell the reader all he/she needs to know about 100 baggers and that anyone can invest in them.
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.
value and opportunity 