Foreign Tuffett

I continue to use a ouija board to calculate EV. All jokes aside, the economic reality hasn't changed, right? So I continue to calculate EV the same way.

Yeah, I agree with you that Castanza's post is all over the place. It conflates all sorts of different issues and games (Diablo Immortal hasn't even been released yet!) in ways that are not productive. The ATVI thread has lots of clear thinking on the video game industry in general. If it were up to me (and it's not) I would confine all video game related posts exclusively to that thread. Diablo Immortal is a huge disappointment before launch. They went against their entire player base by choosing to only launch it on mobile. That was my point. I recommend watching the Q&A. But if I'm wrong then I'm wrong. That's how I view the gaming industry and it's enough to keep me out of it. It's not that your conclusion is necessary wrong, it's that some of what you're posting doesn't make any sense. In your initial post you listed games that were "highly anticipated", but proved to be disappointing on release. I could quibble with a number of these, but only mentioned one in my earlier post: Diablo Immortal. Not only was Diablo Immortal not highly anticipated, Blizzard's core fan base didn't even want the game at all. They wanted a Diablo 4 announcement. Also, Diablo Immortal may prove to be a highly successful mobile game. As I mentioned before, it hasn't even launched yet. You seem to recognize most of this on some level, yet you are doubling down on your contention that it was a "highly anticipated" game that disappointed on release. This will probably be my last response in this thread. I'd rather eat a bucket full of sand than continue this inane and largely pointless conversation.

Yeah, I agree with you that Castanza's post is all over the place. It conflates all sorts of different issues and games (Diablo Immortal hasn't even been released yet!) in ways that are not productive. The ATVI thread has lots of clear thinking on the video game industry in general. If it were up to me (and it's not) I would confine all video game related posts exclusively to that thread.

Same here. That went well. I pushed the sell button on this one a little too quickly this morning, which was an unforced error. That said, it's hard to complain about the results for a position I held less than 48 hours. I thought it was a little too cheap in the mid $90s, but I'm not nearly as bullish on HHC as some of this forum are. I also sold my small Bayer position this morning.

"Cowboy hat from Gucci, Wrangler on my booty." I need to read that S-1, but I am lazy AF. Posted a deep dive on this yesterday: https://lowtideinvestments.com/2019/06/18/kontoor-brands/ Enjoyed reading that. Thanks for sharing. I suppose my similar, sort of opportunity cost for a KTB position might be CPRI or TPR. Thank you for sharing your research. I have been working on KTB as well. I was far from impressed with the Q1 results KTB released today. Not a total surprise that Q1 was weak though, since VF's Q1 earnings still included Kontoor.

David Webb has provided some thoughts on the current political situation in Hong Kong: https://webb-site.com/articles/lamexcuse.asp

In the absence of anyone else, I volunteer to mentor you. We can start....right now! "Drop and give me twenty DCFs!" "What would Buffett say!? He would say that model is a pile of hot garbage!" "Ben Graham would be disgusted if he knew that this is what value investing has become!" "Even Munger can see that's poor work, and he's nearly blind!"

Crush my enemies, see them driven before me, and hear the lamentations of their women!

Joban Kaihatsu (1782) update based in 3/31/19 financials. All #s are Japanese Yen. Stock Price: 5020 Per Share Dividend: 270 Market Cap: 3.936B NCAV: 4.651B Long Term Investment Securities: 1.364B TTM Operating Profit: $1.706B

Anyone willing to help me get up to speed on this? Is there a bull case at the current price? If so, what is it?

Note that Japanese markets are going to be closed until May 7th.

Below are two articles that I think are germane to this topic. As the founder of Varecs Partners, a Tokyo-based fund that specializes in small Japanese companies, Jiro Yasu has a good understanding of the types of companies mentioned in this thread. http://www.varecs.com/en/2015/necessity-is-the-mother-of-invention/ http://www.varecs.com/en/2017/necessity-is-the-mother-of-invention-vol-2/

Thank you for the update on this.

Very true. I would add that interest rates have stayed lower for longer, defying the expectations of many investors.

Fortress Investment Group #NeverForgetNeverForgive

Looks like you may have been right to sell when you did, as the company has sold down by maybe ~15% over the past few trading days after an earnings report that featured 1) slowing revenue growth 2) weak gross margins due to higher raw materials costs and tariffs 3) A $0.06 HKD final dividend 4) more details on a plan to purchase four "nanospider" machines from a company based in the Czech Republic. These appear to be some sort of cutting-edge textile weaving machines that King's Flair thinks will provide them with a leg up (8 legs up?) on the competition. I'm skeptical of an asset light business making a large capital expenditure like this, but management seems competent, so I'm inclined to give them the benefit of the doubt. I am going to hold, as my thesis isn't broken. This is still cheap and still cash generative.

This name has already been mentioned by mjohn707, rukawa, and Janeo, but I figured I would throw my two cents in. Sanko Co (6964) (per Bloomberg) "manufactures, assembles, and markets metal molding, press, and mechatronics products. The Company also makes electronic power tools, precision parts for automobiles, air-conditioning units, and plastic moldings." Sanko is based in Shiojiri , Japan. If you've never heard of Shiojiri, that's probably because it's population is well under 100K. With all due respect to the residents of Shiojiri, this is a boring business based in a boring place. @ 449 a share Sanko trades at a ~57% discount to $0 enterprise value. If you add the long-term investment securities it owns to current assets, it trades ~55% below NCAV. Company has been solidly profitable over the last several years. However, as mjohn707 mentioned earlier in this thread, results in fiscal years 2015 and 2016 were around break even. Finally, this is a very small company, the market cap is the equivalent of just over $36 million USD.

Joban Kaihatsu (1782) is a construction contractor based in Iwaki, Japan. Pays a decent dividend, is currently generating solid operating profits, trades at a ~23% discount to NCAV, and, once you factor the investment securities it owns, trades ~39% below enterprise value. Hat tip to "Blue Tower Asset Management" for this idea.

That's an interesting point about the IPO. It looks like they planned on using nearly 50% of the proceeds to buy a HQ property, but never followed through. This is a rare example of company in Greater China not pulling the trigger on a real estate purchase. Page #217 below https://www.kingsflair.com.hk/wp-content/uploads/2019/01/Prospectus-ENG.pdf

I know this isn't answering your question, but I would be careful with this particular spinoff unless it sells off severely post-spin. From the Form 10: "In fiscal year 2017, sales to our largest customer, Planet Fitness, made pursuant to an exclusive contract, accounted for approximately 12% of our total sales. In 2018, we were involved in contract negotiations with Planet Fitness. The resulting new contract with Planet Fitness is not exclusive to us, but allows Planet Fitness franchises to purchase from Life Fitness or two of its competitors."

Not a David Webb holding, but looks promising..... Kings Flair International @ $1.69 -- trades ~50% above NCAV / 5.15X EV/TTM OP / ~8.3% TTM dividend yield. This business has consistently generated strong cash flows. Forager Funds (no affiliation), an Australian asset management fund, owns shares. If you dig around their website you can find some brief commentary. https://foragerfunds.com/

Would you care to expand on this? While I only spent about 5 minutes looking at it earlier this week, my first impression was that it is a more-or-less fairly valued. What's the special sauce here? Why is it a high quality business? What make the capital allocation so good?

Has anyone else gone through his list of holdings from late last year? He definitely holds some cheap stocks. https://webb-site.com/dbpub/webbchips.asp Sun Hing Vision @ 2.89 -- Trades ~40% above NCAV / ~6.5x EV/TTM OP / over 6% TTM dividend yield / Recently bought a property to use as its HQ starting in 2021 Lung Kee @ $3.48 -- Trades ~44% above NCAV / ~5.25x EV/TTM OP / ~11.5% TTM dividend yield / Also owns some excess real estate Ming Fai @ $1.09 -- Trades ~28% above NCAV / ~4.6X EV/TTM OP / ~6.4% TTM dividend yield /

This hits on an issue I have with super concentrated buy-and-hold strategies: It's tough to figure out if you're generating actual alpha, or if you're just experiencing positive/negative variance.

Would you be willing to share the thought process behind the ~$50 million # ?