I’m a big fan of the TV show shark tank, and I don’t think I’m alone in that regard in the investor community. Yes, it’s dulled down, but I find the different business models and the negotiations are always interesting to watch. Here’s an article discussing what happens “after” the pitch and negotiation, along with some info on how the negotiations actually take place.
Early last year I invested in IEHC (you can read my write up on VIC here). At the time, the company was trading near $2 per share, well below NCAV value, as some forced selling temporarily depressed their stock price. Today, shares trade around $5 per share, so the investment has obviously been a home run. Despite that, I continue to think shares are much too cheap. Continue reading
I really, really enjoyed this piece on valuing Uber. I’ve written before about how I think value investors underestimate or mock growth optionality like the ones discussed in that article. Now, would I pay for it in an investment? No… but if you give me an investment where I can get that growth optionality for free (like, say, IDT, albeit on no where near the same level), then I will happily gobble it up.
Disclosure- Long IDT
There are plenty of famous Warren Buffett stories. Two that stand out in my mind are his early year investment and article on Geico (discussed here w/ link to the article, the investment was covered extensively in the snowball) and his quip that when he ran his partnership he went through the whole Moody’s manual of stocks and found company’s that were trading for one times earnings, which lead to his great returns. Continue reading
There’s nothing like having a big winner. Not a stock that doubles or triples, but a classic Peter Lynch ten bagger. However, as funny as it sounds, having a ten bagger carries with it it’s own set of issues. The biggest of these issues is, assuming you’re investing in an individual, taxable account, selling pretty much becomes impossible unless the shares become ridiculously overvalued because the tax hit completely overwhelms the opportunity cost of holding even moderately overvalued shares. It’s also becomes difficult to objectively assess value; there’s a huge anchoring bias that comes to seeing shares with a cost basis of $5 selling for $50 and waiting for some form of pull back.
New post coming out tmr, but in the meantime I highly recommend checking out the pdf’s in this post. The hummingbird investment strategy especially is worth the read; it aligns extremely closely with mine and, I suspect, many of yours.