Category Archives: Uncategorized

Performance review 6M 2018 – Comment: “Skate to where the puck is going”

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-Performance 6M 2018:

In the first 6 months of 2018, the Value & Opportunity portfolio gained +1,45% (including dividends, no taxes) against -2,88% for the Benchmark (Eurostoxx50 (Perf.Ind) (25%), Eurostoxx small 200 (25%), DAX (30%), MDAX (20%)).

Some other funds that I follow have performed as follows in Q1 2018:

Partners Fund TGV: +4.68%  
Profitlich/Schmidlin: -1,67%
Squad European Convictions +2,22%
Ennismore European Smaller Cos +1,72% (in EUR)
Frankfurter Aktienfonds für Stiftungen -0,54%
Evermore Global Value -0,39%
Greiff Special Situation -0.92%
Squad Aguja Special Situation -5,45%
Paladin One +1,8%

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The return of the Travel Series (9): Expedia (EXPE) – Cheaper than I thought

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Disclaimer: This is not investment advise !!! Do your own research !!!!
The guy who wrote this post just lost a lot of money with his Silver Chef position. You might even consider shorting his recommendations 😉

Background:

When I looked at Expedia almost exactly one year ago as part of my 2017 Travel Series my key take negative aways were as follows:

– CEO has super high salary (90 mn USD in 2015)
– top line growth, operating profit stagnant
– expensive acquisitions in 2015/2016, number of shares and debt increased significantly
– reported growth numbers not adjusted for acquisitions in investor presentation
– lots of share options

Additionally, the stock looked expensive:

At 119 USD per share, Bloomberg tells me that they have a trailing P/E of 54, an expected 2017 P/E of 22,3 and an EV/EBITDA of ~16. This means that a lot of growth is already priced in.

As we can see in the chart, the stock became at first even more expensive before dropping back to a level of around 100 USD / share:

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Crypto Currencies – a short look at IOTA

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Again the promise: This will not become a Crypto Currency blog. On the other hand I really find the topic fascinating and maybe one or the other reader finds it interesting too.

After looking at rather non-exciting ICOs like Naga Coin and Whysker, I decided to have a quick look at IOTA.

Why IOTA ?

First of all, IOTA is also based in Germany and I want to know what is going on in my home country. Secondly, I was surprised that Robert Bosch AG, the very conservative privately hold German auto supplier invested in IOTA coins a few weeks ago. Although Bosch did some stupid things in the past (like buying Ersol and Aleo Solar), it is nevertheless an interesting move.

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Kinnevik AB – Better than Buffett, Watsa, Wallenberg & Co ?

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kinnevik_logo

Kinnevik is one of the more well-known “typical” Swedish investment companies. Founded in 1936 and still controlled (via A shares with multiple votes) by the 3 founding families, Stenbeck, Van Horn and Klingspor, the company now has a market cap of around 7,8 bn EUR.

Originally, farming, forestry & industrial were their main businesses but Jan Hugo Stenbeck, who unfortunately died in 2002 at the age of 59, transformed Kinnevik into a more “modern” company.

One specific feature of Stenbeck was that he didn’t only invest in listed companies but also helped to create new companies or invested in a very early stages. This is from Stenbeck’s obituary in the annual report 2002:

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Synchrony Financial (SYF) – a Spin-off that is better than its Parent GE ?

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While looking at General Electric some days ago, I remembered that I had the IPO/Spin-off GE Capital Credit Cards which is now Synchrony Financial on my research list for quite some time.

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Company Background

This is from the 2016 annual report explaining how Synchrony was separated from GE:

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Trivago Update: From virtuous to vicuous circle in only 7 months ?

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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:

trivago design_big.chart

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:

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Home Capital Group (HCG) – Contrarian Opportunity in Canada after being rescued by Buffett ?

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hcg-logo-200x72

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.

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Venture Capital / Start ups: Why should you give a s*** as Value Investor ?

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Disclaimer: It might easily be that If I look back at this post in 10 years and that this marks the peak of the current Venture Capital boom but who knows ?

Let’s start with a quick reflection on how to distinguish Value Investing vs. Venture Capital:

What is Value Investing ?
There are many opinions on what Value Investing actually is. There is “Graham” or “Klarmann” style value investing where one tries to buy existing assets at a discount, or ” Buffett style” where one tries to buy great and “moaty” companies at a discount to future earnings. My personal interpretation is to buy good companies at decent prices (something like a GARP strategy) or misunderstood companies. What all those approaches have in common that one tries to protect the downside by getting a “discount” on some perceived value. With regard to portfolio management, full diversification is rather the exception. In its more extreme version, concentrated value investors concentrate on mostly making sure that they don’t have losers in their portfolio and transact very infrequently.

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