Sometimes ideas don't need a lot of explanation. Value is apparent and the real work comes in determining management quality, integrity, and alignment. This is one of those. The Basics Let's assume there is a certain investment manager who has about €350 million in assets under management. This fund manager is unconstrained and therefore has… Continue reading Bavaria Industries
In the public world of insurance, there is no large carrier with an underwriting record worse than AIG's over the past decade. It's been a dramatic mess. The History A very short reminder of the company's past might ring a few bells in the head of the (two) people who might read this. I shouldn't… Continue reading AIG
Copied and pasted below for my one follower (mom?). Dear Partners, At certain times in the investing world there seems to be plentiful opportunities for unusual return with less-than-commensurate risk, and sometimes opportunities are few and risky. So far in 2018 I have found myself in the plentiful camp more than expected as… Continue reading 2018 H1 Letter
For most familiar with the investing world, Oaktree is famous for its founder, Howard Marks. He's a distressed debt pioneer and he, with his partner Bruce Karsch, has led the company through just over three decades of substantial outperformance (over benchmarks and the S&P 500). They've long had a philosophy of conservatism and risk control… Continue reading Oaktree
If you were in Manhattan in the 2000's, you might remember seeing a few gents walking around with the initials DBZ inscribed on their briefcase. At the time, those initials were revered. Today, the initials have almost completely been forgotten, as has the firm they represented. D.B Zwirn & Co. shut its doors in early 2008. For… Continue reading Westaim
I like the title's assertation. It has given rise to a lot of mispricings - many of which have been kind to me. Auto sales have been "peak" for the three years running and the imminent subprime auto bubble is always going to burst tomorrow. The media, financial, and business world have beat this drum pretty consistently. … Continue reading Peak Auto!
I often hear confusion among investors and business people equating high profit margins with high returns. I understand the confusion. Returns are all that matter in public markets. Money begets money which begets money. The faster that begetting happens, the better. So when looking at businesses with strong historical returns, we might try to… Continue reading Do Profit Margins Actually Matter?
This short note has been prompted by somewhat recent solicitations of our capital. Or perhaps it's aimed more directly at one venture capital firm - rather a firm that thinks they are venture capitalists because they happen to have access to capital. They also have an IRR or two that looks impressive which gives them… Continue reading The Baloney of IRR’s
I don't understand the market value of Naspers. I haven't for two years. Today, Naspers trades at a market value of $98.8 billion. Naspers owns roughly 33% of Tencent. Today, Tencent has a market value of $419.5 billion. Meaning that per the market's own pricing, Naspers owns $139.7 billion of Tencent. Think on that for… Continue reading Naspers – Too Good to be True?