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Horizon Kinetics Q4 2012 Commentary


giofranchi
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Guest hellsten

Thanks. Colfax, Jarden and Dundee Corp. look interesting. I added them to the list of companies that I receive alerts for when they reach 52-week lows. Too bad I didn't buy them during 2009 or 10 years ago.

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Thanks. Colfax, Jarden and Dundee Corp. look interesting. I added them to the list of companies that I receive alerts for when they reach 52-week lows. Too bad I didn't buy them during 2009 or 10 years ago.

 

What do use to get those types of alerts?

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Guest hellsten

Thanks. Colfax, Jarden and Dundee Corp. look interesting. I added them to the list of companies that I receive alerts for when they reach 52-week lows. Too bad I didn't buy them during 2009 or 10 years ago.

 

What do use to get those types of alerts?

 

I use http://zignals.com. It's far from perfect, but it's free. If anyone knows of better alternatives then let me know. I also tried Yahoo Alerts, but they are no good.

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I found the commentary very interesting and their perspective on owner operators a convincing. HOWEVER, as I read through some previous commentary, specifically the treatise on owner-operators, I did not find their arguments convincing. (http://www.frmocorp.com/_content/essays/The_Owner_Operator_Company.pdf)  The counter-point to owner-operator companies, such as Apple or BRK, was...owner operator Netflix and Salesforce and Chipotle, WTF?????  The founders of the companies are still at the helm and they are most certainly not "agent-operators" to quote the letter.

 

I guess I should give these guys the benefit of the doubt;  the caveat for owner operator companies is watch out for those that have significant insider selling, which was the case with Netflix, etc.

 

But, I don't really know what I think about their research after gross errors like that.

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I roughly agree with you NetNet.

 

I think Horizon/Kinetics does some really excellent intellectual work, along the lines of the work Michael Mauboussin would do when associated with Bill Miller's group. 

 

I think this work has real value, but it is a mistake to blindly invest based on it - it is really more useful as a jumping of point than a conclusion.  Do some owner operators post much better results? YES.  It is a good screen, but it doesn't mean you can invest in just any of them (ATPG anyone?). 

 

I'm not sure how Horizon/Kinetics has done over the years, but I definitely respect their work intellectually.  They were always fascinated with "croupier" investments like stock exchanges - and were very wrong on them in 2008-2010 as high speed traders ate their margins.  However, Buffett's bid for NYX probably shows that they were right in the long run. 

 

I suspect that their position sizing is more in line with that of a seasoned portfolio manager (i.e. one who has been wrong enough times to give up on certainty), despite the high levels of conviction they express in some of their more intellectual pieces.

 

In short, I think they do great work and I would probably invest with these guys - but I think they paint a lot of things as black and white that are not . . .  maybe that is just good marketing.

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