This quarterly member publication is authored by MOI Global contributor and Zurich Project participant Peter Coenen, a value investor based in the Netherlands.
“If you have to squeeze out every drop of risk before investing, there won’t be any fruit left.”
Solid results can be achieved by copying great investors. Don’t try to be the smartest investor around. Start copying the great ones. It’s an approach called “cloning”. I have practiced it for many years now. Cloning works!
According to Profs. Gerald Martin and John Puthenpurackal’s study from 2008, “Imitation Is the Sincerest Form of Flattery,” investors would have earned an average annual return of 24.6% for 30 years, simply by buying what Buffett bought. Better yet, this annual rate of return came from buying the stocks after Buffett had disclosed them in regulatory filings.
There are so many great ideas to copy. It’s actually hard work to copy just one or two ideas a year! And it is most certainly not easy. A great place to look for compelling ideas is dataroma.com, as is thevalueinvestorsclub.com. And if you’ve been around long enough in this business, you will find exceptional “under the radar screen investment managers”, with outstanding long-term track records. Also, a very compelling hunting ground.
Here is a great list of clone-worthy investors. I got it from a tweet from Brad Kaellner, who runs an entertaining and valuable YouTube channel on investing, cloning, etc.
For those of you who have the right mental makeup to handle stock market volatility intelligently, here is your ticket to financial freedom: just copy the best of them. Cloning works!
More so, Brad came up with a list of investors on Twitter with killer returns since fund interception:
Thank you, Brad!
Here is the newest addition to the Intelligent Cloning Portfolio: the Daily Journal Corporation (DJCO). I copied it from Zürich-based investor Guy Spier. At first sight, you might question if the Daily Journal Corporation is indeed this unique outstanding company that has the ability to build a dominant market position in its niche and hold on to that position for many years to come, but after studying an investment thesis on this company, written by Matthew Peterson of Peterson Capital Management, I decided to invest.
Matthew rightfully points out that this investment opportunity is totally misunderstood and makes the case that the Daily Journal Corporation is an undervalued microcap compounder in a huge space for sustainable, long-term growth. You can find his presentation on YouTube. I like the “deferred gratification ethos” part of it. And yes, of course, there are risks to consider. But you know, if you have to squeeze out every drop of risk before investing, there won’t be any fruit left.
Another company in the Matt Peterson portfolio is Seritage Growth Properties (SRG). Interestingly enough, during his annual meeting he lays out the returns his fund generates by selling cash secured put options @ 15 USD on SRG. Heads, the stock goes up, and he wins by pocketing the premium, and tails the stock goes down, and he cuts 4.50 USD off the price of the stock he wants to own anyhow. I just might give that a go as well.
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About The Author: Peter Coenen
Peter is the founder and CEO of The Value Firm BV. The Value Firm BV operates as an independent investment management company. The Company offers investment consulting and advisory, capital market, and portfolio management services. The Value Firm BV serves clients in the Netherlands.
Peter graduated with a degree in Electrical Engineering from the Eindhoven University of Technology (Netherlands). Peter joined the KPN Group of companies where he held various management positions and worked on topics like calling cards, broadcasting business, high speed internet via satellite and business intelligence. Peter is a member of the Royal Industrieele Groote Club in Amsterdam, a lively business club with an eclectic mix from the (inter)national business community.
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