Elliot Turner’s Ideaweek Journal

Ideaweek St. Moritz 2019 easily holds up as one of the most intellectually invigorating experiences of my life.

An Update on Our Investments in Building Products Companies

Armstrong shares fell in 2018 but the company is performing in line with our expectations. Prospects have improved in a few important ways since we first invested three years ago.

My Investment Thesis on TripAdvisor

One- and two-sided network effects and a globally trusted, top-of-funnel, brand strongly position TripAdvisor to take an outsized share of the growing global online travel market.

Twenty Years of Opportunistic, Deep Value Investing

While most investors pursue “great companies,” we look for deeply mispriced securities. We speak and think in only one language—opportunistic, deep value.

An Update on Our Investments in Airlines

If good investment ideas are said to be found in the gap between perception and reality, the airline industry has several candidates for the hall of fame.

My Investment Thesis on ITE Group

ITE is involved in one business activity: it organises exhibitions and conferences. Management is targeting (and is over-executing) high single digit revenue growth.

Discovery Holdings: A Two-Year Research Project Culminating in a New Investment

Investors often talk about Kahneman and Cialdini in their processes; Discovery is actually using those principles to change behaviour.

Multiple Fears Converge

If an investor were convinced that a recession was approaching and he or she had to own stocks, utilities and consumer staple names have traditionally been considered safe havens (rightly or wrongly).

Update on Our Investments in Community Banks

I remain optimistic on OceanFirst’s prospects, as well as the opportunities in the sector overall.

My Investment Thesis on GYM Group

Gym Group enjoys a cost advantage facilitated by superior asset utilisation and a long runway for value accretive asset growth.

On Self-Awareness and Business-First vs. Security-First Investors

A business-first investor considers a business and then looks if the securities are attractive. A security-first investor considers the business second, if at all.

My Investment Thesis on Amerco

Amerco ticks all the boxes of a reinvestment moat, stewarded by excellent long-term business owners and capital allocators, and trading at a modest multiple of normal earnings power.

What Cannabis and Crypto Have in Common

I have thought about the business model [of cannabis companies], which was imposed by the government, and I have to confess that I’m puzzled by it.

Going Short

If we were to manage the fund for another 30 years, how could we bring additional value for our shareholders above and beyond what would be possible by means of the strategy we are pursuing?

Fundamental Alternative Investments (Bond-like Equity Securities)

One of the features of alternative assets is little or negative correlation with most investors’ growth engine — equities. One issue with many alternatives is little or no return.

Perspectives on Margin of Safety

By broadening the possibilities for capital allocation, we increase the chances of finding good investments with a low probability of capital loss, which in itself is powerfully valuable in order to improve long-term returns.

Intelligent Cloning: The Winter 2019 Edition

Mohnish Pabrai has mentioned that during a visit to Instanbul, he was swimming in cheap quality companies (1x forward P/E). Howard Marks has also been bargain hunting in Turkey.

How to Avoid the Most Expensive Mistake in Investing

The most expensive mistake in investing, in my opinion, is selling too soon (and, relatedly, thinking it is too late to buy), specifically in the case of long-term compounders.

A Real-Time Case Study: Equinix

We first learned of Equinix years ago and dismissed the stock as merely another data center marketing itself for having recurring revenue while the primary asset depreciated rapidly and required constant replenishment.

Highlights from the Robotti & Company Annual Meeting

Investing in cyclical businesses can be an excellent opportunity because when a recovery begins its progression is almost never a straight-line direction.

These Thought Pieces Support Our Sense of Caution

Time will tell if people are indeed overestimating the stability of valuation multiples and cash flows, but we recently read a couple of interesting thought pieces that indicate our general sense of caution is warranted.

Asset-Based Investing in an Earnings-Focused World

Our estimates of intrinsic value do not heavily weigh forecasts of cash flows years into the future, simply because the future is inherently difficult to predict. We are not willing to “pay up” for businesses.

What We Learned from Our Biggest Mistake in 2017

One of the biggest mistakes we made in 2017 was under-allocating to Shopify, Alibaba, and Arista. We knew they were bargains due to their growth prospects but were just not ready to pay high multiples.

Radisson Hospitality: Football, Swedish Laws, and Chinese Tourists

I was first introduced to Radisson Hospitality, formerly known as Rezidor, by Brad Hathaway of Farview Capital. In brief, the company is a Swedish-listed hotel group with more than 80,000 rooms.

Refining Our Investment Criteria

We are constantly refining our investment criteria, so we can more easily filter and process opportunities. Our criteria help us eliminate many ideas and prioritize the opportunities we should be researching.

Doubling Down on Appian

There is strong demand for software development, but relatively few people who can develop software. Appian’s platform can accelerate developers’ speed by up to 20x, producing custom software in far less time.

Aimia: A Low-Ball Bid, Cash and NOLs, and Capable Capital Allocators

Aimia is a collection of assets in the loyalty space, which I became familiar with last year when researching Points.com (PCOM). Aimia’s main asset is Air Canada’s frequent flyer program, known as Aeroplan.

Hill International: Activists, Forced Selling, and Low-Hanging Fruit

Hill International provides asset light construction management and consulting services, with 47% of 2017 revenue from the U.S., 35% from the Middle East, and the balance from EMEA, LatAm, APAC, and Africa.

EZCorp: Mr. Market Shortsighted in Convert Issuance-related Selloff

EZCorp continues to frustrate following the May 2018 issuance of convertible debt. To be clear there are other things not to like here, but as far as the sell off following the convert, the market is being shortsighted.

A Better Way of Doing Business

Sometimes the best questions are the hardest to answer. I was having lunch recently with a friend who works in the investment business. We started talking about one of my favorite topics…