Food for Thought #20 // Links🔗

This time the most interesting content I stumbled over includes: value factor vs value investing, drivers of value creation, twitter, section 230, Farfetch, Bitcoin, regrets, L’Occitane, Sberbank, …

Investment philosophy: Michael Mauboussin explains Why value investing still works in markets and reminds us about the difference between value investing and the value factor.

Steven Wood with part three of their series on drivers of value creation.

Swen Lorenz with his newest weekly dispatch about Twitter and Section 230. (if you want to become a paying member to his world-class content please use my affiliate link)

globalstockpicking with his Portfolio walkthrough. A very important investors’ exercise.

Forager with Far Fetched Reasons for Holding your Growth Stocks (video on Farfetch)

Kuppy about Grayscale Bitcoin Trust (GBTC) explaining Why This Reflexive Ponzi Scheme Will Continue …

Marc Rubinstein from netinterest asks Where Did All the Rogue Traders Go?

German: Axel Krohne about the Asian century and RCEP.

Tech-behemoths: The UK is setting up a separate regulatory entity that will have powers to impose fines to rein in the dominance of the largest tech companies. The Digital Markets Unit will be a part of the antitrust regulator from Aprilmaking life for tech giants a bit harder (maybe).

Cyber-warfare: Japan’s nuclear regulator was hit by a cyberattack in October. Sensitive information stored in its system was likely viewed, but reportedly, nuclear plant blueprints were stored separately – let’s all hope so. Such incidents are rather shocking and probably way underreported. Cyber security is becoming much more important and should act as a strong tailwind for CHKP US for coming decades.

Regrets: When I looked at Quadient in my Quicky #11 at Friday, November 13th, I was pretty sure that the stock (QDT FP) was a good bet risk/reward based, looking at the underlying various segments (some showing good solid growth). So I placed a limit buy order a bit below price on Nov 13, believing there is a good chance for the shares to touch my buy price. Right from Monday morning, the shares traded higher. Worse, Accel/KKR were interested in a business division. Yet worse, QDT reported rather good Q3 results. The shares trade +43% higher after 8 days, as of Nov 25th.

  • Teleios, an activist major investor, wrote a letter urging Quadient’s management to consider the offer more rationally (i.e. creating shareholder value), after rejecting the offer due to its business strategy

Generational differences: Sometimes I like to listen to Jim Simons, especially after reading The man who solved the markets. It simply reminds me, that trading is a game that I (and probably you) should never play. It is won by smart machines and statisticians, mostly with a non-business background! Here I watched the part about alpha vs. beta (46:25) and had to laugh 😀 when he starts smoking.

Company news

  • How the parent of BMW‘s China partner arrived at the brink of bankruptcy
  • L’Occitane (973 HK) reported 6m results, ending Sept. Sales and profitability is still affected by the global pandemic. Asia rebounded strongly in the second quarter with China getting ever more important. The stock rallied strongly over two days.
  • Sberbank (SBER RU) presented its Strategy 2023. So far I like what I see, and the market agress with shares performing strongly.
    • Thesis from my Quicky #9 seems confirmed. Sber is able to invest from a position of strength building its future business/digital ecosystem. And it will face challenges similar to western banks (NIM declining by 100bps in three years)
    • Being the core of its ecosystem, Sber’s highly-profitable financial business is a solid base allowing the company to invest in its tech development and new non-financial services.

Best and happy investing, s4v

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