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Mohnish Pabrai – Investors Can Take Advantage When Markets Get Confused Between Risk And Uncertainty

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  • If you have a business which exhibits very high uncertainty then that business generally will get very extreme kind of valuations in a auction driven market and an investor can take advantage of it.
  • It priced it at $45 and from my perspective I said okay why don’t we just buy the stock and wait for two years and because I have all the plants, I have everything else.
  • Because you’re not giving any value to the plants and all of that, and some Swedish firm came and offered $160 for the business, and the stock immediately went for $153 or something.

Investors Should Beware When They Start To See ‘Information Cascades’

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Enbridge Line 3 – Another setback

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  • Although Enbridge is mostly a cash flow story, an investor is paying a lot in advance in order to realize those cash flows – in addition to the requisite risks to pay back the debt, interest and preferred share dividends.
  • Coupled with large future capital expenditures, if there is any sort of credit situation that may occur in the future, equity owners will be taking a lot more price risk than the current potential for reward – which wasn’t going to be a stock price that much higher than CAD$50/share.

Spirit MTA REIT: Sells MTA Assets to HPT, Remains Compelling

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  • Spirit MTA (SMTA) this morning announced the sale of the assets contained within the Master Trust to Hospitality Properties Trust (HPT) for ~$2.4B, after redeeming the Trust's debt and other transaction expenses will net SMTA approximately $450MM (I was hoping for more like $500MM, but this is a reasonable outcome).

Tesla's Travails: Curfew for a Corporate Teenager?

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  • Download ARK pricing from Github This is a pricing, not a valuation: I know that this will strike some as nitpicking but what ARK has produced is a forward pricing for Tesla, not a valuation.
  • The ARK bear is bullish: The ARK bear case requires that Tesla will sell 1.7 million cars in 2023, at an average price of $50,000/car and generate an operating margin of 6.1% on those revenues.

Is Value Investing Dead?

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  • Question: According to many market commentators, value investing doesn’t work the way it used to, and some tout statistics that growth has outperformed value over the last decade.
  • She can count to 100 in both English and Russian.Value investing to me is a philosophy that is governed by what I call the Six Commandments of Value Investing – all principles that come from the teachings of Ben Graham, spelled out in his book The Intelligent Investor and later popularized by Warren Buffett.

Update Handelsbanken – HOLD

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  • The Group’s operating profit increased by 18% to SEK 6,110m (5,161).
  • The short answer is: I don’t know, but I think there is a good probability that Handelsbanken can not only survive but at some point in time really gain market share again especially from other traditional banks that execute poorly.
  • At the current valuation (P/B 1,3, P/E ~10) I think the stock is good value.

Goodheart-Willcox Company (GWOX) Tender Offer Results Are In!

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  • Back in March we posted about the tender offer by the Goodheart-Willcox Company Employees' Profit Sharing and Stock Ownership Plan and Trust of $150 per share for up to 124,000 shares (which is 27.8% of the outstanding stock) of GWOX.
  • The company has announced the results of the tender offer:
  • The shares were redeemed by The Goodheart-Willcox Company, Inc. Employees’ Profit Sharing and Stock Ownership Plan and Trust.

What A Long Strange Trip It’s Been! With Corteva Spinoff Complete, DuPont Is Once Again DuPont

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  • A recent piece in Barron’s notes that “Sanford Bernstein analyst Jonas Oxgaard recently called the DowDuPont merger and 3-way split the “most complicated action in corporate history.”” It goes on to note, regarding the scale of the transactions: Oxgaard’s claim is difficult to verify, but it doesn’t feel far from the truth.
  • Consider, legacy-Dow and legacy-duPont announced their intention to form the largest… Read More »

Goodheart-Willcox Company (GWOX) Tender Offer Results Are In!

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Buying Companies with Great Products (CMI, SNA, GTX, FOXF) – Part I

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  • SNA and CMI both look pretty good, though, so we’ll look at them more in-depth.
  • You can see when you look at SNA’s price in the above chart, it bounced around the $155 range for 5 years — since May 2014 — despite increasing EPS, dividends per share, and owner earnings.
  • Add to all this the initial impetus for looking at the company — that it makes great products that its customers love — and this may well be worth your time and money, especially if you’re patient enough to look beyond the cycle.

(Ep.13) The Acquirers Podcast: Jim O’Shaughnessy – What Works, Legendary Entrepreneur, Investor And Author

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  • Tobias Carlisle: What factors were you looking at at that time?
  • Tobias Carlisle: You have the 12 year back test.
  • Jim O’Shaughnessy: At that time, I’d never worked for another company, I’d always had my own company.

Value portfolios formed on price-to-earnings are underperforming glamour for the longest time *EVER* going back to 1951 — 9 years

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  • For example, the second-worst period in the data was in the early 2000s run-up to the Dot Com peak, when value trailed glamour by 44 percent between May 1998 and February 2000.
  • If we count from the 2006 high, we’re now more than 13 years and 3 months into value’s underperformance.
  • Glamour portfolios have returned 9.5 percent compounded, which means the value decile has typically outperformed the glamour decile by an average of 9 percent per year.

Why did Enloe State Bank fail?

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  • They also have $3.2m secured by farmland and another $10m in loans to finance agricultural production.
  • I found a few on properties that were over 10 acres, which would be considered a very small farm.
  • And then there's that $2.3m loan.

Why did Enloe State Bank fail?

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