Latticework Investor

Value Investing

Tom Russo of Semper: global value equity investing.

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Notes from the Value Investing Congress Twitter feed.

Tom Russo of Semper: global value equity investing.

  • International markets very attractive because of emerging market growth
  • No way out: American companies are exposed to foreign currencies and you’ll have the same fluctuations as foreign businesses.
  • Allocated a lot of capital to emerging markets when they collapsed in late 2008.
  • Nestle has the ability to invest large sums of money at very high rates of return in emerging markets.
  • Pernod Ricard: tremendous leadership in China and leading positions in brands around the world. Became #1 shorted stock in Euronext in 2008.
  • SABMiller has burdened EBITDA margins in Africa because of investments. Commendable: not many companies can think long term.

Written by latticework01

May 6, 2010 at 9:56 am

David Nierenberg of D3 Funds

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Notes from the Value Investing Congress Twitter feed.

David Nierenberg of D3 Funds

  • D3 invests in microcap growth companies, takes concentrated positions, and engages constructively with management
  • Nierenberg talking about opportunities in emerging markets
  • Six of Nine public companies Nierenberg holds have Emerging Market exposure
  • Nierenberg holds RadiSys (RSYS), a leader in embedded computing
  • Sells into telecomm, multi media, defense, medical mkts
  • RSYS #1 mkt share in Media Server and ATCA
  • RSYS has made 3 acqs since 2006
  • RSYS strong balance sheet
  • $3+ per share net cash
  • RSYS followed by just 2 analysts
  • Revenues have been stagnant, but “next generation” revenue is growing rapidly
  • Sees continual gross margin improvement
  • RSYS will have outsourced 100% production by Q2
  • Sees 39% 3 year earnings CAGR
  • Nierenberg now taking questions with partner Cara Denver
  • Denver says thesis on MOVE is still intact
  • D3 owns 18% of MOVE

Written by latticework01

May 6, 2010 at 9:54 am

Eric Sprott: Investing in Precious Metals.

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Notes from the Value Investing Congress Twitter feed.

Eric Sprott: Investing in Precious Metals.

  • We live in a world with a busted formula, and the formula is that governments spend money solely to boost GDP.
  • Race to the bottom on currencies. Right now the US Dollar is winning but it may not win forever. Beware of fiat currencies.
  • Quantitative easing: as a gold bull, those are my favorite words.
  • Interesting idea: East Asia Minerals Corp. Could be a 10-bagger or more based on gold reserves discovered.

Written by latticework01

May 6, 2010 at 9:53 am

Mohnish Pabrai

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Notes from the Value Investing Congress Twitter feed.

Mohnish Pabrai

  • Pabrai presenting: “Leveraging Checklists to Dramatically Improve Investing Results”
  • Pabrai contrasts success of Federal Aviation Administration, which has adapted to tragedys, vs US Nuclear Industry which has not
  • Pabrai has developed investment checklist base on mistakes made by other value investors
  • Pabrai has 80 mistakes on his checklist so far
  • No comapnies will pass all of Pabrai’s 80 questions on checklist
  • Checklist has helped Pabrai with position sizing
  • Pabrai-prop and casualty market very soft, but value to be found there; cites Markel
  • Pabrai says checklist would have changed some of his prior decisions had it been in place

Written by latticework01

May 6, 2010 at 9:52 am

Alatus Capital

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Notes from the Value Investing Congress Twitter feed.

Richard Vogel of Alatus Capital

  • Looking for 8-10% free cash flow yields with an “inflection point” (new market, product, etc).
  • European countries are in a sea of red ink: all have budget deficits, except for Switzerland.
  • GDP growth in Europe has been negligible in past 10 years. Alatus Capital did much better. Good stock picking really adds value.
  • Valora – Swiss based company. Switzerland has highest density of rails of any place in the world. Estimated FCF yield of 11%.
  • Largest kiosk operator in Switzerland and Luxembourg with 1,175 outlets. New management is restructuring and improving margins.

Written by latticework01

May 6, 2010 at 9:51 am

Lloyd Khaner of Knaner Capital

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Notes from the Value Investing Congress Twitter feed.

Lloyd Khaner of Knaner Capital

  • Khaner’s presentation: “Why some of the Best Value Investors Own Gold”
  • Khaner formerly shunned gold, until mid 2000’s
  • Gold to oil ratio typically 1 oz gold to 15 bbl of oil
  • Gold to DJIA typically 1-2 oz of gold to DJIA; currently 13
  • World Gold supply dropping, producing 2500 tons per year, consuming 4000 tons
  • Central banks net buyers of gold last year first time since 1980
  • Khaner- gold is safe haven even if it does not appreciate; holds value
  • Deflation: Homerun for gold in the 1930’s was to own mining stocks
  • Same inflation trajectory as last gold bubble would put price near $5k/oz
  • Gold is the last currency standing–can’t print it
  • #1 reason value investors own gold: currency devaluation
  • Khaner does not specify best way to get exposure to gold; lists ETF, physical gold, mining companies
  • But if you buy mining company’s, look for good mgmt, good history, low prod costs, mgmt that has skin in the game

Written by latticework01

May 6, 2010 at 9:49 am

Carlo Cannell

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Notes from the Value Investing Congress Twitter feed.

Carlo Cannell

  • I’m too lazy to look at RIMM. I’d rather buy stuff at 1x EBITDA.
  • Example of a gem: Coremark.

Written by latticework01

May 6, 2010 at 9:48 am