kab60

I deleted my earlier reply as it was written in haste and didn't really bring any value. Just came across this blog post which has some interesting points: https://y0ungmoney.blogspot.dk/2017/07/five-reasons-not-to-buy-amazon.html

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Azo

Congratulations and best of luck, Packer. I've learned a great deal from your writings. Appreciate you're so willing to share your thoughts.

Bought my first Fairfax shares

Redknee Solutions (beaten up Canadian software company, rights offering coming up). Not for the faint of hearts. Looked at it a couple of months back, since been taken to the dumpster, and Greenhaven Road did a write up in his Q1 letter. There's also some decent articles on Seeking Alpha from Valsef Capital (don't know the guys record though). Basically, a privately owned software company (ESW) snatched the company from Constellation Software who had already agreed to buy the company, and now they put in of their turnaround experts to shed unprofitable business from acquisitions, shrink the company and focus. Old shareholders have really suffered and there's lots of dilution coming up, but I really like what I've heard from the new CEO who seems to focus extremely hard on customer satisfaction and expenses ("I'm a real operator, I just don't look at the top items on the expense line, I get down to items costing 5 dollar per month-sorta-thing"). We shall see.

I came across this blog the other day: http://offpisteinvesting.com/ The guy tracks Asian value investors like Webb and so far I really like the site and have found it quiet helpful. I'm sure he'll be able to tell you how he's doing all the tracking.

I think Nuclear blew it. It might have a safety (or optics problem?), but it definately has a cost problem. Look at the most recently proposed plant in the UK - Hinkley Point; it's guaranteed some 90 pounds/MWh for 35 years - inflation linked! And then you need state guarantees on top because no one will insurers it (I believe - might be a bit imprecise). In Denmark we're getting offshore wind (which was hugely expensive two years ago due to lack of competion) for less than 45 pound/MWh - for 10-12 years. And offshore wind is still much more expensive than onshore wind, and solar also keeps dropping like a rock. And then you also have the long lead times with Nuclear (ask the Finnish; some 10 years behind schedule?). Offshore wind takes a couple of years with the right regulatory frameworks, onshore wind less than that and you can put up a decent sized PV plant on a field in no time. Combined with a high baseload but really more need for flexibility and power that can quickly be turned on/off quickly in combination with renewables, I think Nuclear is dead, while gas will be needed for many years.

I think it makes sense to think of what Taleb calls "antifragility". Sure, some quiet expensive darlings will probably keep growing earnings in a downturn, but I'd like to own stuff for whom it presents an opportunity as well (unfortunately those are difficult to find at reasonable valuations). Anyway, I think that is companies (typically with owner-operator mindsets) that buys back stock opportunistically when it's "cheap" because they have a good handle on its intrinsic value and attractiveness compared to other capital allocation options. But I also prefer companies that know how to prosper from doing M&A - ie buying a struggling competitor in a downturn. Preferably something without too much integration risk (think Auto Nation buying car dealerships). I haven't experienced a major downturn, but I think I'd have an easier time riding it out knowing that my Companies are busy creating value while my screen is showing large losses.

Sold some GNCMA and VDTH and bought some SRG

Congrats. That's very impressive. I read your blog and think what you do seem very solid. I'm not advanced enough (nor have enough time) to do stuff like merger arbs/lots of small workouts, but I figure that'll come in very handy for you when/if there's a crash. Seems much wiser, from my pov, to do what you're doing that trying to market time or short broad indexes due to.macro concerns etc. Really impressive.

Videocon D2H (merging with Dishtv India, large merger spread). Pretty cheap on it's own, possibly more so together.

Just above 50% while having a large percentage in cash and adding money each month, so IRR would be higher. I pretty much market timed perfectly by coincidence (lots of cash in January) and bottom ticked a bunch of investments (HC2 WFC, IBKR and GNCMA late in the year, BCOR early on). I had no losers nor anything commodity related (except some WPT in a retirement account). I can't complain but I still made a bunch of mistakes and lucked out a couple of times (RELY) while missing a big windfall with DCI.

Norway already works as a battery for Denmark, and there's new interconnectors planned for UK, Germany and The Netherlands I seem to recall. It's a win-win because Norway gets access to very cheap electricity at times when there's lots of wind. Someplaces they can use electricity (when it's cheap) to pump water up into the reservoir, ie fill the battery.

It's really great news. I bet on the future development via SMA Solar, but we all know that a growing industry and capital intensity (Airlines, Cars, etc.) doesn't equal easy profits.

My thoughts exactly. Is there a reason to believe BV has decli ned or is this trading at 1xBV?

I'm thinking your problem may be that you buy companies too close to (your estimate) of fair value. I couldn't estimate a fair value for Priceline, but if I thought I could I'd still want more upside than 30 pct. I've sold a couple of positions this year for 20-30 % gains, but that was due to changes to the thesis (due mostly to mistakes on my part/wrong thesis to begin with). I sold a couple of positions too early this year when I resort to monday morning quarterbacking (BCOR after a double, would've been a triple as well as DirectCash just before buyout) but I think my proces was decent - at least the sell decision. So I don't sweat over it but go hunting for new buys instead and am just happy I now have more capital to put to work.

SMA Solar

Perhaps some anchor bias? Even though BAC might still be cheap, I'd have a hard time loading up @ 20 when I passed @ 12 back in February. But also; back then downside was protected by tangible equity - now I need to come up with assumptions. I loaded up on both WFC and IBKR and almost bottomticked 52 week lows prior to Trump, so I can't complain by the recent moves, but I have been trying to recall why I passed om BAC earlier this year. I think I was hoping for a screaming bargain, and in hindsight I was probably offered just that.

Some HC2 Holdings yesterday

Can you please elaborate on your process on how you got to awn FLU? There's a recent write up at OTC Adventures (which I'm sure you've seen). I've liked Airports as an investment since I've seen first hand in Copenhagen how much value one can extract from what's often a monopoly-like business, but the valuation of CPH Airports has me turned off, and I'm not allowed to invest in Danish equities anyway. I can't say I've done a deep dive into FLU but I like the valuation, the low leverage (opportunity to lever up if they're not too afraid), the structural growth and the opportunity it has to increase capacity as well as improve the retail experience (the ability to re-invest earnings at a high ROIC if management is decent). It's a bonus that you have an infrastructure fund that'll probably want to increase its ownership even further. Did you take a look yourself? What do you think?

Interactive Brokers Wells Fargo General Communications Videocon D2H Flughafen Wien Aimia Pref

Funny you should say that - I think 50% equities sounds alarmingly high. And a 7,5% return as well - wouldn't it be prudent at say the 10 y risk free rate?

GNCMA the other day

Why is that? Does he meet with management teams?