JayGatsby

Awesome, thanks! I'll see if I can get through to someone there.

So a few years ago I bought an ADR in a New Zealand microcap (NZO). The shares had low liquidity at the time and now have absolutely none. There's currently a tender offer outstanding for the underlying shares. Does anyone have suggestions for how I can realize that value? I checked with Schwab and they said the ADR has no voting rights and they don't know who actually owns the shares. I have an email into the company to see if they have any idea, as the ADR has "sponsored" in the name. ADR is NZEOY and the stock is NZO. If anyone can trade New Zealand shares it's actually an interesting situation. There's a tender at 0.74 and shares are currently at 0.715. The acquiring company has 40% accepted so far and says as soon as they get to 50% they'll close the tender. The stub equity will then remain publicly traded. So if you have the ability to buy NZ shares you should be able to flip them in the tender pretty quickly. Worst case I guess I just hold forever! It's a tiny company so likelihood the remaining shares are bought eventually seems pretty high. Not sure why they're only tendering for some... perhaps they think they can buy those shares cheaper than offering a full takeover premium. Thanks

Any idea how much the international add-on to Rocket costs? Found one data error on Rocket after just a few clicks (The EV calc on this page: http://www.rocketfinancial.com/Overview.aspx?fID=4722&pw=155784). Probably has less errors than Google, but still a bit disconcerting if you end up paying for it.

Hmm this could be fairly annoying actually. Definitely seems like a strange tactic for a company that wants to host all your data to start deleting certain data ??? .

Agree that EVTC is the best of the lot. Pre-Maria, I think most people who looked at it would have said it's a pretty incredible business. Their core business is very sticky, they have secular tailwinds of people using credit cards more often, and cash uses seem pretty shareholder friendly (mix of acquisitions, share repurchases and dividends). The secular headwind they had was a shrinking population of Puerto Rico, is their largest market (they operate throughout the Caribbean and South America). On the last call they said transactions are currently at 70% of prior volumes (half the people there still don't have electricity at home... hard to imagine). They say they don't expect debt/covenant issues, but that could be a risk depending on how long it takes for the country to get back to normal. They operated at ~4x debt/EBITDA pre-hurricane, which given the nature of their revenue was pretty manageable. The other risk there is the longer the utilities are dysfunctional, the more people move away. On the call they said estimates are as high as 500k people will move (~15% of the population). That adds to the headwind of an already shrinking population (https://www.google.com/publicdata/explore?ds=kf7tgg1uo9ude_&met_y=population&idim=state:43000&hl=en&dl=en). Last call: https://seekingalpha.com/article/4122015-evertecs-evtc-ceo-morgan-schuessler-q3-2017-results-earnings-call-transcript?part=single

Thanks for pointing these out. I hadn't looked into Puerto Rico, but you're right that it seems interesting. I'll spend some time looking at these tomorrow. Evertec looks pretty interesting at first glance... on a $1B market cap they've done roughly $150M of OCF the last few years. There's some debt but doesn't seem unmanageable.

Nice performance. Well done.

That's a good idea. I think WSJ, Bloomberg, and Reuters would have it pretty well covered to start.

I think that's a great idea and would definitely use it. I use seekingalpha today. Their news feed is best I've been able to find. It aggregates press releases and articles from their community. The press releases are really helpful, as well as the bulleted content that they write (example: https://seekingalpha.com/news/3303504-chipotle-limps-q3-results). Mixed in there is a ton of user generated content, most of which is low quality. The user generated articles on less covered companies are usually decent, but if you also follow more popular large cap companies there ends up being way too many articles on them. Most of the large cap articles have nothing new to say. I think as an SA author you get paid per view so if you can crank out articles on Chipotle's queso it's more profitable than a deep dive analysis of Macro's new pipeline contract. That looks like a really good set of features. One feature modification I think would be really nice is if you could filter type of content to include. Most of the time I don't want to see every SEC filing for a large cap because I don't want to see every change in beneficial ownership. Sometimes it's helpful to see though. Also, seekingalpha doesn't really work with international listings. That probably isn't something you'd include in stage 1, but would be nice at some point.

I'm always skeptical of franchises. Some people do really well by finding the right concepts, but I've heard more negatives than positives from people that have done them. If there's a business you think is truly great and can be replicated I think those can be very attractive. As someone said, bizbuysell.com is quite good if you're looking to buy a "main street" type business. If you want to work in a business full-time (effectively buying a good job) the number of reasonably attractive opportunities is fairly plentiful. If you want a semi-passive compounder the opportunities are far more limited. Yes, they're sellers and you have to understand why, but often there's a good/real reason. These aren't Nebraska Furniture Marts that get bought by Berkshire, so often the choice when it's time to move on is either to sell the business to another owner/operator or wind it down. Feel free to reach out if you choose to look into this route further. I've spent a fair amount of time looking at these businesses, but my challenge was that I didn't want to work there full time.

I agree with BG 100%. The only thing that could change that is if you think these guys are truly great operators and/or it's a concept that has room to grow. If you look at it as a cigar butt value investment there's probably better opportunities. If it's more of a venture capital / growth investment it could work out really well. As an American I found the English parts of Europe to be lacking for good fast food / fast casual. Ireland was better than the UK I thought. Somehow places like Pret a Manger are blanketing the UK with those awful factory sandwiches (http://www.mirror.co.uk/news/uk-news/sandwich-factory-workers-make-three-5844492). Maybe people actually like those though. If you choose to proceed be sure to confirm that they're taking a salary now and that the breakeven earnings are after that (I assume it is). You should also know how that will change going forward, what your cash is being used for, and what they intend to do with any excess cash flow. Ultimately with a business of this size you're investing in them. Someone posted this on twitter recently... it's talking about higher end restaurants I think, but still an interesting read: https://www.newyorker.com/business/currency/the-thrill-of-losing-money-by-investing-in-a-manhattan-restaurant

No 2 is the most common I see. For cigar butt type companies I've done best when they do pay a dividend, regardless of geography. That sets a minimum return and forces management to do something fairly productive with the cash. Most cigar butts don't have great track records of reinvestment, so all else equal I'd rather they just return the cash in a tax inefficient dividend.

Buffett talks about it a bit here: . Basically the people who want the insurance are likely to be flooded so it doesn't really work as a financial product. At some point I guess you're just just paying the same amount of the house. If you had a $500k house I'd insure it for $500k, but that doesn't help you much.

I have a Google alert for "share buyback". Don't think I've bought anything it's turned up, but it can be interesting. I'm not as diligent about reviewing all the names it turns up as I should be. Intel (INTC) I think is an interesting cannibal. Never really gets discussed as anything other than the company that AMD is going to rise up and destroy tomorrow, but they've repurchased something like half their shares over the years and are repurchasing something like 10% this year.

Interesting. Thanks for posting. Interesting Jobs was saying that about RIM in 2010 and it really wasn't until this year that they tackled the problem by moving fully to Android, and that was only done when they licensed production to other companies. I bought RIM a few years ago with a pretty simple thesis that they made great hardware and they'd have to get on Android soon to fix their software issues... a few BB10 phones later I gave up. The author did a podcast that was worth listening to: http://investorfieldguide.com/alex/

What are you using to trade these? Will you have to set up an account with a local bank or do you have a local bank that will do it? IB doesn't look like it offers those particular countries for me. Also how will you read the financials? There's an old video on the internet that I can't find of Jim Rogers buying shares in China with cash back in the 90s or so... I've had good luck with international microcaps, but have mainly done Australia and UK. Seems like they may get less attention than US microcaps.. not sure. To answer the original question, I've found those mostly through screens (one came through a blog that I tried to track down later to thank the writer but couldn't find... stock was Northern Bear Plc if anyone knows who profiled that one...).

When I downloaded Sam Zell's audiobook I ended up wandering around the neighborhood aimlessly for a day while I listened. It's read by him in his raspy voice. Definitely worth it if you haven't read it. Also enjoyed Ted Turner's autobiography on audiobook (also read by him).

They're helpful as a proxy when valuing a private company or a segment of one company. Probably less useful for comparing whole public companies.

Thanks for sharing. The twitter link here should work for those without Barron's:

If you go back to the mid-2000's (the Bush era), earnings for gun companies would imply significantly more risk than 30-40% of earnings. Both of those companies were averaging EBITDA in the teens versus current LTM of ~$150M (RGR) and ~$250M (AOBC). There's a lot of theories on how the market's changed (boy scout gun merit badges have increased as an example), but just be careful basing a downside on 30-40% downside. I know at least AOBC has been diversifying, so maybe that helps.

A big part of Redfin's business model is offering a partial rebate on that transaction fee. I think other brokers will do that as well.

Also, I think long vix is an extremely expensive trade. The cost of rolling over the contracts monthly or whenever they do it makes it tough as a long term trade if I remember right. So most of these traders that are "short vix" aren't really betting that volatility will stay at record lows, they're just betting that transaction expenses will continue to be high and vix wont swing too dramatically. I think most derivative-linked ETFs are like that. I thought about buying the 3X long oiat one point, but the chart didn't seem to match up with the "3X". Of the two companies I've reduced positions in this week one is now up 75% and one is now up 20%. So if helpful I can just post what I'm doing and everyone can do the opposite. 8)

His first four books are free on Kindle now. Any reviews from the board?

Peter Thiel's book has a good discussion on this if you haven't read it: https://smile.amazon.com/gp/product/B00J6YBOFQ/ He's really skeptical of "the market is huge/growing and we just need to be a part of it" theses. Typically these result in crowded markets and many losers. This same statement re solar was made in the mid 2000s with a lot of venture capital money raised around it (remember Al Gore at Kleiner Perkins) with mediocre (negative?) results.

These businesses are good because people choose a product/brand and stick with it for a long time. I think generally people choose the product though. Although that's influenced by their preconceived notion of the brand, the product is more important than the brand. In Charles Koch's book he describes a theory that businesses have to keep innovating and putting themselves out of business, otherwise somebody else will. Largely the businesses that are being discussed stopped innovating and tried to rely solely on name recognition to earn an outsized profit. Gillette: I remember when the Mach 3 came out. That took the razor blade up a notch. Then they added the single blade to the side. That also took the razor up a notch (order may be reversed between the two). Then they did nothing for 10 years. Competitors caught up and made a 3 blade razor a commodity. Tide: Tide is the same as it was 20 years ago (I think... if not they've failed to convince me. If i search for "Tide" on Google the product that pops up is "Original). While others were making environmentally friendly / more natural detergents, P&G missed it. There was a good article a few weeks ago about how the budget customer has moved to private label, the high end customer has moved to these new brands (Method, Seventh Generation, etc), and Tide is stuck in a shrinking middle. P&G thought it was a fad and hoped it would pass. I can't seem to find it now, but this article is from 1994, the same year Seventh Generation launched their retail detergent. It looks like Tide finally became phosphate free in 2015. http://www.independent.co.uk/news/uk/detergents-are-bad-for-health-and-environment-study-says-people-wash-clothes-too-often-1422265.html Coke: Coke is terribly unhealthy. I'm surprised Coke doesn't acquire more concept companies and push them through their distribution. I keep thinking Coke or Pepsi will buy La Croix. Instead they're pushing Dasani sparkling, which nobody wants (including Kroger based on shelf space). While Coke was pushing sweet drinks and trying to find the next artificial sugar, some tiny little soda beverage created a bubbly drink that tastes good without any sweeteners. Long story short, I don't think there's anything particularly new here. I think it has less to do with the distribution system and more that they haven't innovated. Any product that doesn't innovate either gets disrupted or becomes commoditized (Heinz ketchup being a rare exception).