Intelligent Cloning: The Winter 2020 Edition

In this edition of Intelligent Cloning we start with some refreshing insights on cloning. Then we will revisit the “Mohnish Pabrai Free Lunch Portfolio”…

Default to Optimism: Our Investment Outlook in a Complex World

Predicting where the S&P 500 is going to be one month from now is hard enough, so trying to predict where prices will be a full year from now is almost pointless.

Value Investing in Japan: Our View on Engagement

We are often asked if we are an engagement fund because we have a concentrated portfolio. For us, engaging with a company is just one of our tools and not the end goal.

Surveying the SVN Capital Portfolio

We own good businesses that 1) are run by competent teams (many of them are owner-operators), 2) have opportunity to redeploy their earnings back into the businesses…

On Discipline and Having a Long-Term Time Horizon

Our primary objectives are the long-term growth and preservation of capital through ownership of high-quality businesses on a global basis.

Corporate Culture: No Predator Without Prey

One of our favorite investing scenarios is finding a company with a remarkable culture taking share from incumbents that seem unwilling or unable to change.

Grinnell College, Joe Rosenfield, and Investment Performance

Joseph Rosenfield, a 1925 graduate of Grinnell College, became the head of Grinnell’s endowment in 1968 when it had $11 million.

Best Ideas 2020 Preview: Megacable

While operational performance has continued to be strong, Mega shares have sold-off along with other Mexican assets following the election of Andrés Manuel López Obrador in 2018.

Best Ideas 2020 Preview: KVH Industries

KVH has been in investment mode for a number of years while transitioning to a subscription model. The company has new offerings that could lead it to be a much larger business.

Best Ideas 2020 Preview: Avid Technology

This year I had the opportunity to dig into Avid Technology, which competes, collaborates and co-exists with two companies that I admire – Adobe and Autodesk.

What Portfolio Implications Does the Asset-Based Approach Have?

The asset-based approach, which we have spoken about at past MOI Global summits, functions well as a means of assessing conservative business value to a potential purchaser of the company.

First-Lien (Bond-like) Infrastructure Investments

This year’s presentation is a follow-on to the subject I discussed last year (fundamental alternative investments), examining additional segments, e.g., infrastructure and pipelines.

The Contrarian Path

The assets driving economic gains today are more closely related to Mickey Mouse in nature than they are to the tangible assets that statistical measures, accounting methods, and valuation methods were designed around…

Better Results via Simplicity

We are blunt with clients. Do not give us any money for stock market investments unless you are committed to a ten-year time frame. Otherwise, we set ourselves up for failure.

I’m on a Boat: Five Core Attributes of Leadership

I’ve spent the past eight years trying to develop a better process for how to analyze the quality of a leader because good leaders produce better business and investment outcomes.

The Most Important Mental Model, or On Being a Fallibilist

Knowing there are likely errors in what we believe to be true, with the idea that we should be seeking better explanations, is a fundamentally optimistic worldview. It is a growth mindset.

Who Is Scared of Google? Not Booking Holdings

Google offers metasearch for hotels in a way that offers a superior user experience and has the benefit of Google getting paid for sending users to other sites to book rooms.

When It Comes to Value Investing, Are You A Fox or A Hedgehog?

Jim Simons, Edward O. Thorp, and Claude Shannon all developed an edge by applying mathematics and technology in a way that had never been done before.

Position Sizing (Part Six): Turnover

In Part 6 of our series on position sizing, we explore our framework around target drift, trading among companies within our portfolio, and portfolio turnover.

“Outrageous” Profit Margins

I find myself annoyed buying beer at a baseball game. Since I’m free to buy or not buy a beer, you would think that if I buy one then I must find the price reasonable.

Why We Are Investing in Tangible Assets

While precious metals no longer circulate as legal tender, gold and silver have maintained their purchasing power over the last 130 years of Montana’s statehood.

How Long Will the Bifurcated Market Last?

To crystalize tax losses, investors start selling stocks on the way down which puts more pressure on stocks that have not done well.

Panera Bread and the Illusion of Fresh

When you think of Panera Bread, you probably have images of fresh coffee, great baked goods, really tasty salads… and you probably have the assumption that they’re made on premises.

Position Sizing (Part Four): How We Assess Conviction

We explain how we go about ranking the probability of success for companies in our long term-oriented investment strategy and how this process drives our position sizing process.

Nicoya Fund’s Investment Thesis on Nicholas Financial

I am convinced that the foundations of the operational turnaround are firmly in place, the capital structure is stable and incentives all-around are completely aligned.

Masimo: Doing Well by Doing Good

Over the twenty-year period [ending in 2016], the U.S. healthcare sector outperformed the S&P 500 Index by nearly two percentage points per year, on average.

GCI Liberty: Advantaged Business, Controlled by Skilled Allocator

This investment fits the theme of buying advantaged businesses, under the control of a skilled allocator, bought with a margin of safety (due to “double discount” to Charter in this case).

Update on Key Holdings of Brennan Asset Management

We had several company specific developments during the [third] quarter, and therefore we’ll dive right in… while PG&E keeps the lights on.

Long-Term and Cold-Minded Thinking Behind Some Investments in Greece

The risks were huge, and building a “Greek basket” would not have yielded great results. However, we knew a great refiner was listed in Greece, and that’s how our trip began.

Ensemble Capital’s Investment Thesis Update on Tiffany & Co.

Direct-to-consumer startups leverage social media to take on incumbents. It’s difficult to start and scale high-end jewelry, as the product doesn’t outwardly advertise the brand.