topofeaturellc

In my experience they tend to have a core-periphery approach to trading the book. For core names it's most trading around, but for the long tail it can be quite active with short holding periods.

As an overbroad generalization they would characterize themselves as Value, and certainly relative to pod shops they are. That said in a perfect world you'd say quality business trading at an entirely defensible valuation with a story that appeals, and you probably willing to hold so long as the story works and valuation isn't it insane, and the chosen metric can be entirely variable but not ridiculous. There are some shops that emphasize the value bit more where a value guy willing to work in the process can in theory work out, but I'm loathe to name names, partially because my info is pretty outdated. There are also places that have basically become stealth pod shops. That said I think pre gfc the tiger guys generated a decent amount of returns from balance sheet things that are mostly gone (like positive rebate on the short book) also the generally have to run with less leverage.

Lol. Consultant penetration of the institutional channel in the UK is nearly 100%.. most of the big value shops in the US similarly began as one man bands. The Spanish guys (who all came out of Bestinver) are retail only and given Parames performance if he were in a market with a natural bid he'd be managing 100 bn. There is also a component in the US asset management industry professionalizing probably a decade or more before the UK. Read Capital Ideas for that history.

It has a lot to do with the customers and the consultants. Even the value shops in London mostly have US clients on the institutional side. Institutions in the UK have historically been very consultant driven and the consultant community outside the US is much less style focused. Say what you will about style boxes, but the do create a natural bid for “value” Exacerbated of late by the trend to de-risk away from equities.

You have to look at turnover in context. Some places run a model where you hire young and have lots of churn years 3-5 but almost none post year five. Same with being a "PM". A place where lots of people make PM probably doesn't much value the title. If you have four "PMs" on a product chances are 1-2 of them do the thinking and the rest will be marketing/admin heavy. But at a place with one real PM (like Harris International for example) the non PMs can do a lot. Now the big issue is portability as an analyst vs as a PM, but from the firms perspective who cares.

What is your definition of supply chain? The only listed guy is Danieli which is worth a look. Eaf in Europe is a tire fire of irrational Spanish producers.

No it isn't. And certainly not via blast furnace. Which is mostly what the listed guys do. And you don't really want to own long steel generally as it's much more commodity. Don't mistake a cyclical upturn for a structural change in rates.

Eh. Not much to understand. Structurally oversupplied, no growth. But the world steel council has the data you want. Don't confuse the fact the stocks are up a lot with some structural change to the biz. And I say this as someone who owns a bunch of them and supply chain guys. This is just "China isn't insane". It's still a structurally<coc biz.

Different marathon..

What do you want a primer on? Like this is a broad question. Wikipedia will give you the basics of production and the respective industry groups produce a bunch of data. Aluminum is much more split up between upstream downstream rolling while steel is generally more integrated.

Not l/s but silchester and marathon have good lt tracks (as does Orbis but that's not really Europeans - it's ZA by heritage and I think Bermuda is their main hub but I'm not sure). Parames ex-Bestinver with a new startup Cobas - his numbers are incredible.

Residual aggressiveness peaked Q3/q4. I bought a car last October. Once I determined my model I went out to all of the dealers within about three hours of me and gave them the exact details. Because residuals were so aggressive I wanted to lease with an intent of buying it at a renegotiated price at the end of the term. I basically view it as a free option on them getting to aggressive on residuals. So I first had to figure out what the exact car they wanted to lease me was (my observation was that at a given trim line there was basically one set of options that all of the cars they wanted to lease you had, and trying to differentiate from that was suboptimal). My initial email contact basically said " this is what I want, and I want your quote back in the form of car price + fees, not monthly payment" because some guys think you want to target a payment so they'll play with numbers on the front or back end to get there. If I got an email back not on those terms I kicked them out. The reality is the residual value and money factor are fixed by the captive finance guys, so the only lever that matters is price+fees. I went through four rounds of bids and ended up materially below invoice, for a car the dealers really really didn't know the bid for yet. Basically after each round I went back to everyone and said "here is the bid- do you want to work with this" I could have gone lower ( I got an unsolicited counter where they didn't know where the market was) but the next step down was <2% of the value of the car and basically I chose a small family run dealership more conveniently located over a slight better deal from a larger corporate dealer.

Except n>2 in the real world. The better counter argument is the index composition changes over time so survivorship biases returns of the index above average investor returns.

That sentence is not logical. You can't believe in factors and then say beta, alpha and CAPM are crap. Say the are overly simplistic or that they're explanatory power is overstated, but the theory itself is a just the very first step in the path to establishing a framework. I'd be pretty happy taking a net on the lack of real alpha generation in the world btw. Truly idiosyncratic outperformance is is so rare as to being basically impossible to distinguish from luck.

Before fees and on a dollar weighted basis half of investors have to outperform an index. Now they might outperform through beta or a factor exposure and so a quant might argue there is no alpha -which fine if you aren't paying fees. Value is essentially a priceable factor as is quality. You can argue there is no idiosyncratic alpha in what most people who post here are trying to do. But really I'm not sure that matters if you goal is to outperform and index I've the long-term and you are comfortable with your explanation for why the factors you've picked outperform. Pricing that is a different conversation.

I am both a Hoya and employed as an investment person at a value focused institutional asset manager. I would encourage you to hit up your network.

I don't know what the answer to your question is but have you looked at the statutory filings of the mutuals? It may help you answer your question? I think the big guys got into trouble on their annuity businesses - not their straight life insurance. Maybe the mutuals haduch less exposure? But I know f-all about life insurance.

one year returns for a strategy like this are really shorting the actual results. A longer-holding period is required. That said, absolutely naive quant value strategies can underperform for years at a time. Levering them seems really really silly.

all those things have been said multiple times since at least the mid-90s. Nothing has changed we're just closer to the end but no one knows when the end is. Or maybe it won't end? If it does though it won't be smooth. In the context of owning net-nets it's an interesting question though. It would tell you to own cheap things with lots of book in non-financial assets.

It is just as likely bass was just lucky with the timing on housing. Like the Japan thesis it was hardly novel. The Japan is done macro call had been around forever, and all that's happened is lots of lost premiums. Some day it'll probably happen but who knows when. A tremendous amount of that crazy debt is satisfying endogenous demand. As long as demand stays high the situation will persist. And when it no longer does that macro tourist du jour will look like a genius.

I am under the impression that if you charge a significant sum on your card out of character with historic spending you'll get a call. I put my wedding on it and got a phone call.

In practice, this means the one who's first keeps his monopoly (leaving aside regulators stepping in). I'd recommend every interview with John Malone within the last 5 years. He offers so much insight into the economies of the cable industry. He told Walt Mossberg back in 2009 that Netflix taking over cable was and is a pipe dream: http://www.wsj.com/video/liberty-media-chairman-john-malone-the-full-d7-session/0DF26270-8D40-40F0-B9F3-61893BEFBCFA.html He certainly is not underestimating Netflix but he knows the power of the cable economies of scale. Only because no one has had the balance sheet to do it all the way. Nor has there been the support of bubble needed to finance it. Look at the history of rails and power utilities in the US. Incumbency didn't protect the first movers there. If cable goes unchallenged it isn't going to be because of something intrinsic to cable. FTTH is a superior technology that once in place is sort of perpetually upgradeable with a relatively small Capital investment.

duopolies and oligopolies that can behave in concert are just monopolies. I think there is a very interesting conversation to have about the characteristics of cases where duopolies and oligopolies can't stay disciplined. Especially given the current range for investment theses that can boiled down to "Consolidation = oligopoly = high returns"

Isn't this just Schumpeter?

I meant youtube generating enough incremental revenue fror GOOG rolling out a meaningful fiber business priced around where we get broadband today such that GOOG is earning a decent return on the whole thing.