Here are some new valuable thoughts and articles that should be worth checking out:

• Robert Seawright with a proposition for good judgement, criticism for fully-automated investment processes and the risk of fooling yourself.
• On the change of Warren Buffet’s investment philosophy and how a price that exceeds book value can be a good or a bad sign.
• This one should preferrably be called “disruption through entrepreneurs“, it does provide some great ideas though.
• A very recent talk by Mohnish Pabrai with some more basic investment knowledge, for we sometimes like to watch a video, too.
• A set of videos on activist investing that claim to cover facts that are not commonly known.

One last thought I want to share is that, as I have learned myself, it will always pay off to put a little extra effort into everything you do, even if it is an uncomfortable thing to do. Whenever I am confronted with a spreadsheet with hundreds of numbers and multiplicators and I ask myself whether I really see through all of this, two Einstein quote comes to my mind:  

 Do not worry about your difficulties in mathematics; I can assure you that mine are still greater. It’s not that I’m so smart, it’s just I stay with problems longer.

 

Have a great weekend.

This post originates by a comment of reader S., who has mentioned the book “the Outsiders, Eight unconventional CEOs”. Actually the book review was  my first blog post which I ever had accomplished, and MMI was so kind to publish it in his outstanding blog. As this book is really worth reading here is the old post again with some extensions which I have learnt in the year after having read the book. Especially I could recommend the links at the end of the post which will help you to achieve a deeper understanding of “Outsider thinking”. Perhaps William N. Thorndike Jr. itself is an outsider, he is the founder and managing general partner of Housatonic Partners a private equity firm. After Motley Fool Housatonic Partners has returned around 25% in the last 20 years, the approach of Thorndike is to spend 30% of his research time on the CEO and management of a company,   So first of all, let’s start with the book review and the wrap up of the idea. read more

This is the continuation of our analysis of the Vetropack Holding.   At first, we will show you the strategic positioning of the company by giving you a geographical overview including Vetropack’s and competing sites. Keep in mind that for most products the maximum transport distance is 150 km. We also added the total sales per country in mio pieces. It has become clearer that Vetropack is in good company at almost every production site. That explains why the management announced they were not able to push thru price adjustments, competition is strong enough in most regions.     Furthermore, as you probably know, political events in the Ukraine have influenced its currency risks and Ukraine may need a devaluation in order to pay its debt and re-establish its exports.  

• http://www.nytimes.com/2014/03/08/world/europe/russias-move-into-ukraine-said-to-be-born-in-shadows.html?ref=world
• http://www.nytimes.com/interactive/2014/02/27/world/europe/ukraine-divisions-crimea.html
• http://www.reuters.com/article/2013/12/02/us-ukraine-markets-idUSBRE9B10ZC20131202

read more

This is a rather unusual post for us, because it’s event-driven. Carmat S.A. is a 2008 founded company that produces advanced biological materials. The founder of the company is the 80 year-old surgeon Alain Carpentier who invented the scientific Carpentier-Edwards ® heart valves in the year 1968, which are the most used in the world. The company describes itself with the words: Carmat S.A. is the designer and developer of the world’s most advanced total artificial heart project, providing an alternative for people suffering from end-stage heart failure. Due to the company this disease currently affects over 100 000 patients in developed countries.   The first implantation of the Carmat S.A. bioprosthetic artificial heart in a human was performed on December 18, 2013 at the Georges Pompidou European Hospital in Paris, by the medical-surgical team headed by Professor Alain Carpentier and consisting of Professors Christian Latrémouille (HEGP), Daniel Duveau (Nantes University Hospital), Bernard Cholley (HEGP) and Doctor Denis Méléard (HEGP). Today the newspaper reported that the first client died 75 days after the surgery. That led to a trading stop of the stock. read more

VALUE ESSENTIALS: MARGIN OF SAFETY (SETH KLARMAN)   This post is essentially going to cover the most important points of the well-known “Margin of Safety” by Seth Klarman. It might be just as useful for people new to the topic as to those who have read it several times and would like a short summary.   The first chapters basically explain how institutional investors can cause market inefficiency or, in other words, says why value investing works. To keep the length of this post appropriate and not to go into every detail (we do still recommend reading the book!), we would like to jump to the overview of value investing that Klarman gives. Three elements are crucial:   The bottom-up strategy separates the value investor from others; the investment focus should lie on specific investment opportunities. Know a few companies really well instead of knowing little about very many. In the best case, you can focus on just one company at a time, by trying to buy a bargain and to wait.   Focus on absolute instead of relative performance. You cannot beat the market every year. In fact, most of the time you are going to be wrong. But every investment that has been valuated correctly has the potential to help you beat the market in the long-term, which are you are very likely to do. It is necessary to tolerate long periods of underperformance. Cash reserves are crucial when no bargain is available. If the portfolio is fully invested and an opportunity comes along, get rid of companies closest to being fully valued.   read more