Good example why “ordinary investors can’t copy what Seth Klarman is doing: Earning money with Madoff claims
Herbalife: John Hempton visits a Herbalife Nutrition club and some interesting comments from the “Waren Buffet for shorties”, Jim Chanos on “mulit level marketing” and Herbalife.
Plus the full 30 minutes interview with Jim Chanos.
Great post at Oddball why sometimes less information about a companymight be a good thing
Monish Papray on checklists for investments
“Inspired” by Gannon’s post about the book and indirectly Whopper, I read the book, partly also to understand why I got the Kabel Deutschland short wrong.
The book is sketching John Malone’s business history from the early 70ties, when he joined the almost bankrupt regional cable company TCI until the early 2000s when he already was a billionaire.
For me, especially the following points stood out:
Malone as CEO/cable operator
+ Malone is rather a “financier” and deal maker than an operator, although he certainly knows his stuff about cable and media
+ very early, even at university he already developed the concept to use maximal leverage for regulated “quasi monopoly” businesses
+ at his time at TCI, he perfected this business model even further. He used depreciation/amortization aggressively in order to be able to “compound” cable assets without paying a single cent of taxes
+ he was one of the first CEOs to convince investors to disregard earnings and focus on cashflow
+ in his first 15-20 years at TCI, he managed to increase the share price by several thousand percent without ever showing a single cent of profit
+ he perfectly understood competitive behaviour, effectively running a “cable cartel” for many years and extracting the maximal gain for shareholders (would be maybe a very good study for the Bruce Greenwald book..)
Malone as an investor
+ as an investor he is being quoted rather as an “asset collector”
+ this implies that he has extremely long time horizon’s, sometimes 20 years and more and no hurry to cash out
+ his “exits” were usually tax optimised stock swaps into more liquid shares of acquirers
+ his first “genius” stroke was the early spin-off of Liberty media which made him rich. This is also one of the very prominent spin offs Joel Greenblatt wrote in his “You can be a stock market genius” about. I think it also explains a lot why such a special spin off worked so well. Malone structured the spin off in a way that people were not really interested in the spun off shares. With a loan of his employer, he then bought up as many shares as he could.
+ some investments he made were either genius or sometimes monopolistic, for instance buying a struggling network and then allowing it to be distributed over his cable systems. One example was the “BET” network, were he invested 500 tsd USD in the early 80ties as the founder was struggling, distributed it via his cable network and then sold the stake for close to 1 bn USD to viacom in 2003. This shows his patience with such investments and might be one of the best “angel investments” in history.
Although the book clearly has some lengths, I found the book very interesting and highly recommendable from many perspectives. It offers good insights into the cable business as well as into “cutting edge” corporate finance and long term investment thinking.
John Malone is also someone you definitely you want to follow. So if John Malone aggressively buys into German cable, it is maybe not the best timing to short Kabel Deutschland at the same time.
I wish I had read this book much much earlier…….
John Hempton from Bronte is actually long Herbalife. Fascinating story.
Longtermvalue blog is unhappy with his 2012 performance. He argues that small investors must use their advantages even better.
Eddy Elfenbein has published his 2013 buy list. Great how he beats the S&P 500 year after year with a simple large cap portfolio.
Wexboy too, writes about his favourites for 2013.
Good long story about Dish Network. Being nice to employees seems not to be their main strategy. Nevertheless, the stock has risen 4-fold since 2009.
Economist story of a relatively unknown fraud 200 years ago, involving among others, bonds of a non-existent country called Poyais.
Detailed story on Nokia’s decline from Techcrunch
Very interesting NYT article about Steve Cohen, Hedge fund mastermind
Jim Grant’s free winter issue of past articles
A new book on quantitative value investing from the guy who runs the Greenbackd Blog
Great post from the Brooklyn Investor about possible lessons from Kodak for Apple
Good analysis of Fortress Group “Wexboy style”
And, of course, Bill Ackman’s Herbalife short presentation and Kid Dynamites answer
With a little delay, some hoepfully interesting links:
MUST READ: Damodaran with a three part series on acquisitions: Acquisition accounting part I and part II and success factors for acquisitions.
Good paper about investing under uncertainty
Interesting interview with Jean-Marie Eveillard with comments about accounting across time and countries (good comments about British accounting and securities…).
Stableman with an interesting quote from Seth Klarmann about complex securities as investment opportunities
Wilbur Ross warms up to Spanish Banks…
Chovanec on the crackdown of the SEC against Chinese auditors
Via Stableman: Soros lecture on bubbles
50 minutes interview with Howard Marks. Maybe the best counter cyclical investors of our time.
Variant Perceptions on the difficulty of retail turnaround
Via Alea: A very good description of the Target2 system
Damodaran nails it why companies make bad M&A deals
Red corner has published an UK portfolio with 7 stocks which, according to the comment, should outperfom the UK index by 20% next year. Bold claim, let’s watch this……
Very good analysis of Delticom from Stephan at SimpleValue. No buy yet…For Delticom, it is also worthwile reading the wallstreet online thread, especially Joschka Schroeder’s comments.
Good French Stock blog with an interesting French Squeeze out, Banque Tarnaud (via Red). Banque Tarnaud was in my Top 25 France Boss Score but I didn’t manage to have a look at it.
The Interactive Investor on Dart Group
Cassandra with a contrarian short gold – long Japanese bond or Cotton trade idea
Stable Boy is not a big fan of JC Penney any more
Damodoran on lockup expirations and stock prices (Facebook)
Chris Hohn likes Porsche. I guess I will have to update my Porsche analysis from 18 months ago.
Is it already the right time to short 3D printing stocks ?
Or rather short cloud computing, like Kerrisdale Capital does with ServiceNow ?
Bronte thinks Great Northern Iron is the proof that stupid investors do still exist….
Two very good posts about the Leucadia / Jeffries Merger: Cove Street Capital and the Brooklyn Investor
Great article about hedge fund strategies:“The end of arbitrage” (via Stableboy)
Highly recommended: NYT business story about ZARA / Inditex
Good analysis of the Bulgarian economy and stock market and an interesting Bulgarian company called Yuri Gagarin.
Some top hedge fund investment ideas form a recent investment congress in Chicago
Stephan at Simple Value analyzes an interesting French plantation company (only in German)
Wexboy like two German residential property stocks especially KWG kommunale Wohnen.
Since this week, short positions for German shares of large Hedgefunds can be accessed here. Most interesting: 15% in total of Aixtron are sold short….
Classic article from Charles D. Ellis against “Diworsification”
Good presentation from Katsenelson on investment process
Very interesting Tim McElvaine (Peter Cundill disciple) video interview about Japanese companies and investing (mental note: run screen as mentioned: Stock down 2/3, below tangible book and market cap > 1 bn )
Nate from Oddball is more into Japanese Net nets.
Does “catching the falling knife” maybe work on a sector level ?
David Einhorn is short Iron ore. Jim Chanos had this idea already 1 year ago.
Expecting Value about Severfield-Rowen, a stock on my Boss score UK top 25
value and opportunity 