giofranchi Posted November 6, 2014 Share Posted November 6, 2014 I started my company in 2004 with 25,000 Euros in equity. Until the end of 2010 operating earnings were much larger than investments. At the end of 2010 investments reached 1 million Euros for the first time, and truly started to matter. I have zero debt. Yesterday the value of my firm’s investments exceeded 2 million Euros for the first time. Little more than a 20% cagr during the last 3 years and 10 months. I am particularly satisfied by the way I have reached such a goal. Always behaving very conservatively and keeping as detached from stock market gyrations as possible. 30% of my capital has always remained invested in Fairfax, and another 20%-30% always in cash. On the contrary, of course, if I had been more aggressive, by now I would probably be at 2.5 or 3 million Euros! ;) Cheers, Gio Link to comment Share on other sites More sharing options...
petec Posted November 6, 2014 Share Posted November 6, 2014 Great work Gio! Have you continued adding operating earnings to your investments or is that pure investment return? And, would you sell a stake in your business? ;) Link to comment Share on other sites More sharing options...
Sportgamma Posted November 6, 2014 Share Posted November 6, 2014 Congradulation Gio. What I'd be even more interested to kbow, is how you went from 25k to 1m in 6 years. That's a phenomenal performance. Link to comment Share on other sites More sharing options...
giofranchi Posted November 6, 2014 Author Share Posted November 6, 2014 Have you continued adding operating earnings to your investments or is that pure investment return? Yes, of course I have continued adding operating earnings to my investments! But since 2011 operating earnings and investment returns are of comparable amounts. ;) Gio Link to comment Share on other sites More sharing options...
nwoodman Posted November 6, 2014 Share Posted November 6, 2014 congratulations and keep up the great work Cheers nwoodman Link to comment Share on other sites More sharing options...
giofranchi Posted November 6, 2014 Author Share Posted November 6, 2014 What I'd be even more interested to kbow, is how you went from 25k to 1m in 6 years. That's a phenomenal performance. Well, that is easy to answer: good luck!! Two operating businesses that require almost no capital and generate very satisfactory levels of free cash flow. :) Gio Link to comment Share on other sites More sharing options...
bantrader Posted November 6, 2014 Share Posted November 6, 2014 Congrats Gio, well done :-) Link to comment Share on other sites More sharing options...
writser Posted November 6, 2014 Share Posted November 6, 2014 Congrats. You own 100% of the equity? Link to comment Share on other sites More sharing options...
dolce far niente Posted November 6, 2014 Share Posted November 6, 2014 Congrats Gio! Link to comment Share on other sites More sharing options...
ukvalueinvestment Posted November 6, 2014 Share Posted November 6, 2014 Congrats. I'd be interested to know your biggest winners and positions. Also, I'd love to know your portfolio today :) Link to comment Share on other sites More sharing options...
giofranchi Posted November 6, 2014 Author Share Posted November 6, 2014 You own 100% of the equity? My family owns it (me, my parents, and my sister). :) Gio Link to comment Share on other sites More sharing options...
giofranchi Posted November 6, 2014 Author Share Posted November 6, 2014 I'd be interested to know your biggest winners and positions. Also, I'd love to know your portfolio today :) I have at least doubled the capital invested in VRX, ENDP, and Third Point Offshore. I have made a lot of money with LMCA and OAK. I also have more than 150k Euros of capital gains in Fairfax, with 30k Euros more received as dividends. I have made some money with GLRE. Most of all I have lost practically no money (with the only exception of LRE, which took me by surprise…). My portfolio today: 33% Fairfax, 15% LMCA + LBRDA 15% BH (way undervalued imo!) 9% GLRE 28% very short term US treasuries Gio Link to comment Share on other sites More sharing options...
wescobrk Posted November 6, 2014 Share Posted November 6, 2014 Congrats! Very impressive! I made a nice amount in Red Robin the past few days but unfortunately other unexpected issues have caused a lot of spending this year. I'll need some time to build back up. Link to comment Share on other sites More sharing options...
cemadh Posted November 6, 2014 Share Posted November 6, 2014 Impressive record Gio. Congrats! Question for you - you are out of VRX because you are concerned that Pearson and Ackman may overpay for Allergan? Link to comment Share on other sites More sharing options...
giofranchi Posted November 6, 2014 Author Share Posted November 6, 2014 Question for you - you are out of VRX because you are concerned that Pearson and Ackman may overpay for Allergan? No… Thinking about it, I really don’t know why I am out of VRX… In retrospect I think it will prove to be a very dumb decision… I have sold it because of its debt level and because I think there is not yet evidence enough the organic growth of the companies Pearson acquires keeps being strong enough, after the acquisition and the changes implemented by Pearson and his team. A high debt level without a crystal clear track record is something I am not comfortable with… But, again, I sincerely think I am making a mistake here. Gio Link to comment Share on other sites More sharing options...
DCG Posted November 6, 2014 Share Posted November 6, 2014 I've asked this before on here (and don't think you've answered), but what type of business(s) do you own? Care to share the name/websites? I'm interested in checking them out. Link to comment Share on other sites More sharing options...
giofranchi Posted November 6, 2014 Author Share Posted November 6, 2014 I've asked this before on here (and don't think you've answered), but what type of business(s) do you own? Care to share the name/websites? I'm interested in checking them out. You may find the websites of both just below my avatar! :) 1) Civil Engineering Services: www.agenziamilanostrutture.it 2) For Profit Higher Education: www.masterpesenti.polimi.it Cheers, Gio Link to comment Share on other sites More sharing options...
frommi Posted November 6, 2014 Share Posted November 6, 2014 Congrats, very well done! Is your family actively working in these businesses and why did you choose to accumulate capital in the business instead of getting it out via income? Is this more tax efficient in italy? Link to comment Share on other sites More sharing options...
Packer16 Posted November 6, 2014 Share Posted November 6, 2014 Congrats. It sounds like you have the beginnings of a nice compounding machine. Packer Link to comment Share on other sites More sharing options...
giofranchi Posted November 6, 2014 Author Share Posted November 6, 2014 Is your family actively working in these businesses and why did you choose to accumulate capital in the business instead of getting it out via income? My parents are still involved in 2), my sister runs her own medical clinic! :) Actually, I have a third company through which I gather all the earnings of 1) and 2) and invest them in the stock market. I think this solution is very tax efficient. Surely much more efficient than if I were to take out earnings as an individual via income. Gio Link to comment Share on other sites More sharing options...
giofranchi Posted November 6, 2014 Author Share Posted November 6, 2014 Congrats. It sounds like you have the beginnings of a nice compounding machine. Thank you Packer! Let’s just hope I won’t find a way to screw things up!! ;D Gio Link to comment Share on other sites More sharing options...
phil_Buffett Posted November 6, 2014 Share Posted November 6, 2014 congrats gio!! on your achievements :) sounds very nice! altius is quite down after you sold your Shares, when you will buy it again? phil Link to comment Share on other sites More sharing options...
giofranchi Posted November 6, 2014 Author Share Posted November 6, 2014 altius is quite down after you sold your Shares, when you will buy it again? Thank you, Phil! I keep following Altius with great interest. And I liked Dalton’s latest letter to shareholders. If the Liberty Broadband spin-off pays off, I will probably cash in some gains and reinvest the proceeds in Altius. We will see. ;) Gio Link to comment Share on other sites More sharing options...
frommi Posted November 6, 2014 Share Posted November 6, 2014 I think this solution is very tax efficient. Surely much more efficient than if I were to take out earnings as an individual via income. Sounds good, i thought about a similar structure for my business some years ago. But i have thrown that idea away because of the additional work/costs involved with a second company and i thought that the advantage in germany is rather small because i pay around 25% on all capital gains/42% income tax as an individual and the company would have to pay around 26% on all the earnings. And my thought was that when i want to pull the money out of the company i get taxed a second time. But perhaps there was a flaw in my thinking or are the numbers in italy so much different? Link to comment Share on other sites More sharing options...
Liberty Posted November 6, 2014 Share Posted November 6, 2014 Congrats Gio, well done. I'm happy for you :) "There is only one success - to be able to spend your life in your own way." - Christopher Morley Looks like you're doing exactly that! Link to comment Share on other sites More sharing options...
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