Tyler Cowen on who might win and how might lose from the advance of AI
A short history of the Video Game industry and the Activision/Microsoft case from Stratechery
The new Howard Marks memo “Sea change”
Mauboussin on Capital Allocation
Whenever Joel Greenblatt is speaking, one should listen (and watch)
Nature magazine with a good summary on the recent Nuclear Fusion “breakthrough”
Marc Rubinstein on retail banking and Vernon Hill (Commerce Bank, Metro bank)
Every year on December 15th, the blog celebrates another anniversary, because on that day in December 2010, the blog went live for the first time. (Edit: and again this should have gone out yesterday….).
As always there will be a separate performance portfolio review in the beginning of January. In human years, 12 is still early teenage years, in “Whisky years”, 12 years is already a decent age. However, in Blogging time, 12 years rather feels like being the Grandfather of stock blogging. A lot of the fellow stock bloggers from back then have vanished or moved to social media. Interestingly there is now a new wave of bloggers mostly on Substack.
Disclaimer: This is not investment advice. PLEASE DO YOUR ON RESEARCH !!
As this post has become quite long, here is the Elevator pitch:
DCC Ltd, a 4,3 bn market cap UK listed, Ireland based company at a first look like a very boring, unremarkable collection of very boring distribution businesses. A second (or third) glance however, reveals a very stable , well managed distribution company that has been compounding EPS at double digit growth rates for the last 28 years and can be bought for a very modest valuation of ~10x earnings. The company clearly faces some challenges but this might be more than outweighed by very good capital allocation, company culture and growth opportunities.
DCC has a very interesting history. It was founded actually as some kind of Venture Capital company in 1976 in Ireland and was led for 32 ears by founder Jim Flavin. After turning into an operating company, DCC went public in 1994. Over the years they acquired a lot of businesses, many of those where distribution businesses from oil majors but also in other areas such as health care and technology components.
What I find extremely impressive is their track record since they listed in 1994 and is available in each annual report:
It’s time after exactly 3 months for some new ramblings on Energy, Europe and of course the weather and other stuff.
Bad news everywhere:
The last few weeks felt like a new catastrophe is happening every week or so. Italian elections, the British Pound trading like a Shitcoin, Putin threatening the West with Nuclear Weapons, Energy prices for retail customers skyrocketing, potential Blackouts being a real issue in Europe this winter, steel and fertilizer companies shutting down in Europe, creating supply chain issues down the chain and in addition, rumors about regime change in China and/or preparations for an attack on Taiwan are surfacing every day.
I have been listening to some US podcasts and there seems to be consensus on that Europe is Toast. Even a comparison to the “Arab Spring” was made with the dire prediction that Governments will topple like Domino tiles. I don’t want to sound arrogant but one word of advice to my American readers: European countries are actually all Democracies and if people don’t like their leaders they will elect new ones.
The FT was just running an article about the coming Deindustrialization of Germany with the example of BASF threatening to “leave” Germany and Billionaire Ray Dalio thinks that Europeans are not working hard enough.
Good bye Denmark, hello Norway !!
As with previous series (Germany, Switzerland & Denmark) I will tackle the Norwegian shares in random order. The main reason for this is that I find this funnier compared to working down the list in Alphabetic order. The first batch of 15 stocks has resulted in two watch list candidates. Let’s go !
Kahoot! is 1,1 bn EUR market cap former “growth darling” that was part of many “naive Tech investor” portfolios. Kahoot! is an online learning platform that addresses both, private customers as well as the corporate learning market. As many other Tech companies the financial report is a gibberish of Non-GAAP adjusted numbers. On a GAAP level, the company is loss making and cash seems to be shrinking. At 7x P/S this still looks much to expensive. “Pass”.
2. AF Gruppen
Interesting FT article on UK listed Venture Capital vehicles (Venture Capital Trusts)
A good “red flags” list for Venture investments that might work well for listed tech stocks, too
A very nice deep dive into LVMH and the luxury business
Interesting Podcast with UK investing legend Nick Train
Swen Lorenz with a very interesting introduction & Deep Dive into the Lloyds Insurance market
A nice pitch for Europe and Germany despite the current energy crisis from Noahopinion
If you haven’t tried out ChatGPT yet, do it. I wonder how schools and universities will cope with pupils and students doing their homework using this tool.
All Danish Share – the Grand Final:
After looking at all 175 Danish companies, it’s time to consolidate. From the 175 companies, overall 34 made it onto the preliminary watch list which looks as follows:
All good things come to an end and these are the remaining 15 randomly selected Danish companies. This time, two of the 15 made it onto the preliminary watch list. Before moving on to the next country, I will need to condense the Watchlist to my “Top 10” watch list names for Denmark which I will do in a separate post. Let’s go:
161. Valuer Holdings
Valuer is a 4 mn EUR market cap, 2021 Vintage IPO that does something with AI and has lost more than 90% of its value since IPO. “Pass”.
162. MapsPeople
MapsPeople is again a 2021 Vintage IPO with a market cap of 33 mn EUR. The company has been doing better than other 2021 Tech IPOs, losing only -50% vs. the IPO price. Nevertheless the company is burning money and only has limited runway. “Pass”.
163. Vestjysk Bank
Trustpilot, which listed in the UK in 2021, doesn’t look like a must have stock
Some Spin-off stocks with insider buying
Insider Deals with a nice write up on Gym Group Plc
Bireme Capital really likes Meta
Great write up on 2 cheap micro caps: Atlas Engineered group (Canada, roofs) and HAV Group (Norway, boats)
The finance industry has invented “Collateralized Fund Obligations” that allow leveraged bets on (leveraged) PE Funds. What could go wrong here ?
An interesting deep dive on how to reduce the Carbon footprint of Cement
And on we go relentlessly. Another 10 randomly selected Danish stocks, with only 16 more to go. This time, 3 of them made it onto the preliminary watch list. Enjoy !!
151. Nordea
Nordea is a 36 bn EUR market cap “full service” bank and asset manager active in the Nordics. As many other Scandinavian financial institutions, Nordea is doing quite well compared to its European peers, managing ROEs of around 7-11% over the past 10 years.
The longer term share price development is nevertheless quite disappointing, showing little to no value creation:
value and opportunity 