Buying Irreplicable Assets with Irreplaceable Capital

In thinking about our approach to managing our families’ capital over the past few months, we’ve come to appreciate a phrase that would be well-suited as a motto for us — “buying irreplicable assets with irreplaceable capital”.

How We Determine the Value of Our Stocks (and the Portfolio)

The only logical way to invest is to pay a price that is lower than the value that we get in return. This rule should be universal and should apply for all types of investments, not just equities.

Travelzoo: Attractive Unit Economics and Lifetime Subscriber Value

We believe in a sale to a strategic buyer, Travelzoo is worth $400-500 million ($32-40) based on 4-5x gross profit of $100 million (88% gross margin) of which a strategic buyer should be able to drop $40-60 million to the bottom line.

The U.S. versus the World

An interesting feature of the global investing landscape in 2018 is the nature to which the positive returns have been dominated by the U.S. while the rest of the world markets are struggling and in many cases are down substantially.

Nils Herzing Sums Up His Investment Philosophy

The aim of my investing is to generate long-term outperformance (over a time period of more than five years). I don’t aim or a low volatility or other fancy things; the sole goal is to maximize the performance in real money terms.

Rosetta Stone: Lexia Intrinsic Value Strong and Growing

RST is growing intrinsic value in Lexia by $4 per share per year, and Lexia alone is worth $12-13 in 2018. Our low-end, sum of the parts, distressed valuation is $24 — 1x sales for Consumer, Enterprise, and K-12 Language (75-80% discount to M&A multiples).

Update on Dundee: Steep Discount to Intrinsic Value, CEO We Trust

Multiple shots on goal: steep discount to conservative estimate of intrinsic value, a CEO we trust and potential catalysts within the next 6 to 12 months that we believe will unlock significant value; we are now one of Dundee’s top five shareholders and own over 5% of the stock.

Update on Marchex: Debt-Free, Even After Special Dividend and Buyback

MCHX remains exceptionally well-capitalized, and debt-free, even after this year’s special $0.50 per share dividend and the recent buy-back.

Good Companies Don’t Always Make Good Investments

This article by MOI Global instructor Dominic Fisher has been excerpted from a letter of Thistledown Investment Management. One of our investments, Kulicke…

Spark Networks: ~8% the Size and ~1% the Valuation of

Spark Networks provides online personal services in the U.S. and internationally. Its primary properties include and, which are communities for the singles of Jewish and Christian faiths.

Update on Medley Capital: 10+% Yield While Waiting for NAV Discount to Close

We believe the shares trade cheaply on a stand-alone basis and on the pro-forma combined basis. We also enjoy an approximate 11% yield while we wait for the discount to NAV to close.

Berkshire Hathaway: Don’t Try This at Home

Warren Buffett and Charlie Munger have managed Berkshire Hathaway for 53 years generating returns of over 20% per annum. Einstein’s eighth wonder of the world, compounding, has turned a $100 investment 53 years ago into over $2 million.

Leaf Group: Improving Fundamentals and Below-Peer Valuation

Leaf Group is an online digital media company composed of two offerings: Content & Media and Marketplaces. C&M publishes and distributes content, accumulating a library of content across properties such as and

Liquidity Services: GovDeals Alone Worth More Than Total EV

The ingredients are in place – positive secular trends favoring online versus auction site liquidations, a powerful technology platform coupled with the largest online buyer base in the industry, and a well-incentivized management team (CEO Bill Angrick owns 17% of LQDT).

Highlighting Cerner

Cerner (Nasdaq: CERN) is an investment made in our High Quality Company Strategy, which focuses on investing in businesses that can compound their earnings power at an above market rate over an extended time horizon.

Tucows: High Reinvestment Rate to Drive Cash Flow Growth

With 40% ROE and even higher ROC on Ting Fiber, combined with reinvesting $50 million a year in high-ROC buckets, should drive material CF-per-share growth on just ten million shares and starting off a base of nearly $5 per share.

Thoughts on Life: How to Get Lucky

Over the last few years, I have become somewhat obsessed with studying highly accomplished people in business, technology, sports and philosophy. The idea is to learn from them, according to Warren Buffett’s gospel…

Paratek Pharmaceuticals: Deep Sell-off Renders Shares Cheap

After having sold two-thirds of our stock several months ago, we recently took advantage of a deep sell-off in the company’s shares. Why is the stock so cheap? There has not been a successful new antibiotic that has come to market in many years.

The Importance of Price Discipline

We agree with fellow value investor Seth Klarman, price discipline is extremely important, if not the most important factor for good investment results. Experienced stock market investors recognize that the market is fickle.

Facebook and the Challenges of Investing in an Expensive Market

Facebook is a case study in the difficulties of investing in a market in which nearly all quality businesses trade at full valuations, and one can only hope to find relative value. The problem is that when prices are full, stocks are vulnerable.

The Danger of Crowds

Thousands of years ago, before the use of horses, Native Americans utilized a hunting technique that preyed on animalistic instincts. This technique was called the buffalo jump. Hundreds of buffalo could be killed at a time without the use of weapons.

Thoughts on Value Investing: The Fallacies of Perception

In 2007, a man started to play the violin at a metro station in Washington DC on a cold January morning. He played six Bach pieces for about 45 minutes. During that time, since it was rush hour, thousands of people went through the station.

Update on Rubicon: Successfully Leveraging Legacy Ad-Tech Strengths

Earlier this year after a deep review of the company’s initiatives, and noting early indications of the market’s response to those changes, we decided to double our investment and RUBI became RAM’s top holding.

A10 Networks: Attractive Valuation Caused by Reporting Issues

ATEN is listed on the New York Stock Exchange and is a provider of secure application solutions. Its portfolio of software and hardware solutions enables customers to secure their applications, users and infrastructure from internet, web and network threats at scale.

Public Private Equity: Volatility vs. Franchise Value

We have discussed how public values and capital structures often look far different than those of private companies and noted how several of our current names would likely be the exact types of names that have made private equity firms substantial money over the years.

Active vs Passive Investing

Passive investing with index ETFs is all the rage now. We’ll briefly discuss what they are, why they’re such a great product for generating wealth (when used properly!), and how we view Overlook Rock’s strategy as distinct from (and superior to) index ETFs.

Hidden Advantages to Hybrid Public-Family Businesses

The “game” of business is an infinite game and sacrificing value for short-term market appeasement is a losing strategy. Long-term value is predicated on endurance and firms that use growth merely as a vehicle to sustain or appreciate the share price, will not survive.

A Quick Survey of Some of Our Top Holdings

Don’t bet against America. Though improvident and rash, tariffs, trade wars, and ballooning budget deficits shall not imperil that which survived civil war, reconstruction, world wars, assassinations, multiple recessions, and the Great Depression.

Hate for Cable, Change of Heart for DISCA?

Investor fear over a changing landscape has created opportunities in the media/telecom sector. Our largest positions are in cable systems: Liberty Global, Charter via Liberty Broadband / GCI, Liberty Latin America, and DISCA.

The Power of Low Costs

A competitive advantage can come in many different flavors, but my favorite might be a low-cost advantage. I don’t think it’s necessarily better than others, but for me it’s easier to understand.