The 400% Man!

[Snorky]

Have fun reading

[racemize]

Has the PDF form of 2015 come out?  I created a compilation of all the letters I could get, so I'm hoping to keep the cleaner form rather than stick in Value Walk's version.

 

Thanks in advance.

 

 

[Travis Wiedower]

Has the PDF form of 2015 come out?  I created a compilation of all the letters I could get, so I'm hoping to keep the cleaner form rather than stick in Value Walk's version.

 

Thanks in advance.

 

I don't know the answer to your question, but if nothing else you could copy the annual letter from Value Walk into Word and save it as a PDF (make a couple formatting corrections if necessary).

[Snorky]

Has the PDF form of 2015 come out?  I created a compilation of all the letters I could get, so I'm hoping to keep the cleaner form rather than stick in Value Walk's version.

 

Thanks in advance.

 

I´ll post the 2015 version here as soon as i got them. Do u have pre 2008 letters ? If so, please post them here.

[racemize]

Has the PDF form of 2015 come out?  I created a compilation of all the letters I could get, so I'm hoping to keep the cleaner form rather than stick in Value Walk's version.

 

Thanks in advance.

 

I´ll post the 2015 version here as soon as i got them. Do u have pre 2008 letters ? If so, please post them here.

 

Thanks, I appreciate it.  I only had from 2010, so you had me beat already!  I'm trying to get the earlier ones too.

[intothebreach]

Snorky,

 

Thanks for taking the time to post these, much appreciated!

[Graham Osborn]

Nice article and seems like a smart guy who realizes that the real way to make money is through a secular trend along with a willingness to emphasize holding period over leverage.  That said, I find this article not that useful from an idea perspective.  Maybe in 2008-2009 you could navigate your way into consumer defensive sectors which as it happened were on there way to round out a bubble of their own in the strain for yield.  Even Burry had to go beyond stock picking for returns in that interval.  But where does the stock picker turn now?  I've been looking long enough to feel substantiated that there is not a single undervalued sector right now outside of commodities/ commodity businesses.  And after reading Hot Commodities I've decided commodities are in for quite a long winter before we hit the kind of under capacity that drives a secular bull market - barring some kind of shock.  So what strategy is the stock picker going to use to weather the next downturn?  Maybe real estate would carry you over a little while but that doesn't seem like much of a risk-averse or long-term strategy.  It will be interesting to see whether this fellow steps outside of equities over the next few years, given that he's seemingly not willing to buy the dips.

[Sionnach]

Nice article and seems like a smart guy who realizes that the real way to make money is through a secular trend along with a willingness to emphasize holding period over leverage.  That said, I find this article not that useful from an idea perspective.  Maybe in 2008-2009 you could navigate your way into consumer defensive sectors which as it happened were on there way to round out a bubble of their own in the strain for yield.  Even Burry had to go beyond stock picking for returns in that interval.  But where does the stock picker turn now?  I've been looking long enough to feel substantiated that there is not a single undervalued sector right now outside of commodities/ commodity businesses.  And after reading Hot Commodities I've decided commodities are in for quite a long winter before we hit the kind of under capacity that drives a secular bull market - barring some kind of shock.  So what strategy is the stock picker going to use to weather the next downturn?  Maybe real estate would carry you over a little while but that doesn't seem like much of a risk-averse or long-term strategy.  It will be interesting to see whether this fellow steps outside of equities over the next few years, given that he's seemingly not willing to buy the dips.

 

Allan gives you his answer for free in his 13F

[muscleman]

Have fun reading

 

Thanks a lot! It is very interesting to read his thoughts over these years.

 

If there is an interview opportunity next time, I would ask him about his commentary on SD in the 2011 letter. He quickly sold out SD in 2012 and luckily avoided catastrophic losses. What was his thinking process on this whole saga?

 

[MrB]

As soon as im on my desktop pc, I can post them here.

 

thanks!

2006_annual_letter.pdf

2007_Annual_letter.pdf

[vikx01]

Snorky and MrB,

 

Thanks for posting the letters. Very nice reads indeed.

[Evolveus]

Snorky and MrB,

 

Thanks for posting the letters. Very nice reads indeed.

 

+1  Looking forward to reading the 2015 annual if it surfaces.

[valuefinder0525]

http://www.valuewalk.com/2016/03/arlington-value-capital-2015-annual-letter/

[Graham Osborn]

Nice article and seems like a smart guy who realizes that the real way to make money is through a secular trend along with a willingness to emphasize holding period over leverage.  That said, I find this article not that useful from an idea perspective.  Maybe in 2008-2009 you could navigate your way into consumer defensive sectors which as it happened were on there way to round out a bubble of their own in the strain for yield.  Even Burry had to go beyond stock picking for returns in that interval.  But where does the stock picker turn now?  I've been looking long enough to feel substantiated that there is not a single undervalued sector right now outside of commodities/ commodity businesses.  And after reading Hot Commodities I've decided commodities are in for quite a long winter before we hit the kind of under capacity that drives a secular bull market - barring some kind of shock.  So what strategy is the stock picker going to use to weather the next downturn?  Maybe real estate would carry you over a little while but that doesn't seem like much of a risk-averse or long-term strategy.  It will be interesting to see whether this fellow steps outside of equities over the next few years, given that he's seemingly not willing to buy the dips.

 

Allan gives you his answer for free in his 13F

 

Yes, he is still heavy on consumer defensives.  Do they still look technically robust?  Sure, a lot of them do.  Would I consider any of these value buys now?  Probably not.  The stock with such a moat that it deserves a defensive PE of 25 is pretty darn rare IMO even during Buffett's "haystacks of gold" period.  Assuming Allan's portfolio still looks like this now - which would not be inconsistent with his low turnover strategy - I would expect him to beat the S&P this year.  He might even come out positive.  But if I'd been coasting the past 7 years and was sitting atop that portfolio I'd probably be doing a lot of incremental selling on a value basis.  And I'll bet he is.  Which makes these disclosures not that useful for prospective buyers.

[muscleman]

As soon as im on my desktop pc, I can post them here.

 

thanks!

 

Thanks a lot! Do you have his earlier year letters, from 1999 to 2005?

[muscleman]

Does anyone understand AVM's investment philosophy? I examined the historical trades in dataroma and found most of his positions as high P/E businesses. CHEF, TRIP, CMPR etc.

I haven't seen any value investors buying such high P/E stocks.

Can anyone help me understand his approach?

[CalvinL]

Does anyone understand AVM's investment philosophy? I examined the historical trades in dataroma and found most of his positions as high P/E businesses. CHEF, TRIP, CMPR etc.

I haven't seen any value investors buying such high P/E stocks.

Can anyone help me understand his approach?

 

CMPR or the old VPRT - was a fair price to pay for a growing, industry roll-up strategy. It is the amazon of printshop that no one talks about. Roll-up - I mean businesses begin transferred from traditional brick and mortar high cost print shop to online print shop. Lowest price, lowest cost producer advantage, reputation (repeat customers) advantage, marketing $ scale (google adsense) advantage, Robert Keane who can clearly articulate and execute this strategy. Its IT system is the real secret sauce that no one can just come in and kill their business. Given the total print market is shrinking, no one is going to come in and compete so they are likely going to dominate a slowly shinking pie. And it was traded lower when it experimented higher prices and that writedown that hurt earnings back in 2012. Needless to say, he became my hero since.

 

Chef is a specialty food supplier that has the widest catalog of specialty food in the US, sourcing mostly from small European suppliers. no one comes even close. There's a new foodie trend going on and consumers start to demand 200 different variety of cheese from restaurants beyond what sysco could provide. They are the only one in US that could deliver that, so price isn't the biggest problem. once restaurants start ordering from them it's easier just to stick to them for everything. so there's customer captivity and suppliers captivity. They manage their inventory well and even if things get worse, Sysco seems like a logical buyer.

 

none of these 2 stocks are exactly cheap now...but AVM got in at much lower prices. His strategy seems to be focusing on small/mid size growing businesses with competitive advantages at a fair value. I really wish to talk to him one day.

[kab60]

Does anyone understand AVM's investment philosophy? I examined the historical trades in dataroma and found most of his positions as high P/E businesses. CHEF, TRIP, CMPR etc.

I haven't seen any value investors buying such high P/E stocks.

Can anyone help me understand his approach?

I think you have to do a bit of work to see the value. Cimpress might not screen well, but if you tinker with the numbers and believe the long term thesis it's apparent why the company is more valuable than the stock price indicates. He has a pretty qualitative approach and says he thinks very long term. I really really recommend his letters.

[Graham Osborn]

Does anyone understand AVM's investment philosophy? I examined the historical trades in dataroma and found most of his positions as high P/E businesses. CHEF, TRIP, CMPR etc.

I haven't seen any value investors buying such high P/E stocks.

Can anyone help me understand his approach?

I think you have to do a bit of work to see the value. Cimpress might not screen well, but if you tinker with the numbers and believe the long term thesis it's apparent why the company is more valuable than the stock price indicates. He has a pretty qualitative approach and says he thinks very long term. I really really recommend his letters.

 

It's a good example of how "value" means different things to different people.  But some of these were definitely chapter in the past.  Allan's strategy has obviously worked to date, but I disagree with him that the strategy is working because the businesses have unusually great long-term fundamentals in any market-independent sense.  For me it's more of a sector rotation strategy - betting where the institutions will go next.  Consumer defensives and healthcare were a great play post 08 because we were in an economic recession - to hell with the indices.  The indices went up because of QE and not because an emergence from recession was anticipated.  That's a problem because having "another" recession doesn't mean consumer defensives will be a great place to invest.

[Homestead31]

meacham references the information about the best performing funds over long periods lagging pretty regularly over shorter periods of time... i know i have seen a few articles that reference that fact, but i can't remember where.... does anyone have a link or some data etc?

 

thanks

[AzCactus]

In one of his letters (I think 2011) he mentioned that Arlington only outperformed the S&P 55% of the months.  I think someone previously uploaded it...but I added it just in case.

2011_Annual_letter.pdf

[Guest notorious546]

Does anyone understand AVM's investment philosophy? I examined the historical trades in dataroma and found most of his positions as high P/E businesses. CHEF, TRIP, CMPR etc.

I haven't seen any value investors buying such high P/E stocks.

Can anyone help me understand his approach?

 

Isn't that part of the "point". He's able to see and understand things different than us?

[muscleman]

Does anyone understand AVM's investment philosophy? I examined the historical trades in dataroma and found most of his positions as high P/E businesses. CHEF, TRIP, CMPR etc.

I haven't seen any value investors buying such high P/E stocks.

Can anyone help me understand his approach?

 

Isn't that part of the "point". He's able to see and understand things different than us?

 

That's true, but I wish someone could walk me through the numbers and get to Allen's conclusion. Well I bet I had better discuss the numbers in the CMPR thread.

[KCLarkin]

I examined the historical trades in dataroma and found most of his positions as high P/E businesses. CHEF, TRIP, CMPR etc.

 

He takes advantage of the volatility when starting these positions. Off the top of my head, CHEF, CMPR, and MSM all traded down to 15x operating earnings this year. BRK basically touched the 1.2x P/B "put". If you pay market-level prices for above average businesses, you are getting good value. LUK, OUTR, and SNE are more classical value plays. DNOW was pricey (for a cyclical) when he bought it but traded at ~ book value more recently

 

I think the steady inflows of cash are wreaking havoc on his discipline though. It becomes harder to take advantage of market volatility when you have a steady stream of cash piling up.

[TorontoRaptorsFan]

He's wasting his time with Leucadia. I don't have any faith in the existing management.