One of the World’s Widest Moats

Posted on 13 CommentsPosted in Investment Ideas & Company Research, Saber Capital Management

A year ago today, I wrote a short post on a company called Tencent Holdings (TCEHY), a dominant internet company in China and its ubiquitous crown jewel of an app platform called WeChat. I began studying that company for a few months, and last fall I bought some shares for the first time, adding some more shares in December. The stock has risen this year, but still offers significant value in my opinion, and I plan to hold my shares […]

Returns on Capital and an Investment Idea

Posted on 5 CommentsPosted in Investment Ideas & Company Research, Investment Philosophy, Investor Letters

A couple years back, I wrote a series on the topic of returns on capital (ROIC) and how significant its impact is on the long-term value of a business. As a long-term shareholder of a business, your ultimate investment result will be determined by the quality of that business over time. One way to measure quality is to figure out the rate of return that the company achieves on its own internal investments (as well as what that company does […]

The Most Important Moat

Posted on 23 CommentsPosted in General Thoughts, Investment Philosophy, Investor Letters, Saber Capital Management

I recently wrote an investor note on some thoughts I have on customer value, and why I think it’s important when analyzing businesses. I thought I’d share that letter here: Saber Capital Investor Note: “Most Important Moat” (6/13/2017) In the note, I outline why I think that when you’re evaluating the durability of a company’s moat, it’s critically important to consider the value of a company’s product from the customer’s perspective. It’s a concept I’ve been thinking about for the last […]

Berkshire Meeting Notes – Daily Improvement, Business Evolution, and Investment Strategy

Posted on 10 CommentsPosted in Charlie Munger, Investment Philosophy, Saber Capital Management, Think Differently, Warren Buffett

Last week I headed to Omaha to attend Berkshire Hathaway’s annual meeting. Nowadays, there is less of a reason to attend the meeting in person because it is available to watch online, but I love attending the event for all of the peripheral meetings that occur. It was a great weekend, and I got to connect with a few Saber Capital clients, as well as some good friends that I don’t see very often. No matter how long you’ve been […]

The Behavior of Stock Market Manias

Posted on 30 CommentsPosted in Books, Case Studies

I’ve heard more and more commentary/concern about the level of the overall market lately. With the market relentlessly marching to new all-time highs just about every day, I’ve even begun to hear the word “bubble” being used. While I certainly don’t think the market overall is cheap, and while I certainly believe it’s very possible that a bear market could occur at any time, we are definitely not in a bubble. Anyone who thinks that the current market is reaching […]

Charlie Munger’s Most Important Concept (Takeaways from the DJCO Meeting)

Posted on 14 CommentsPosted in Charlie Munger, Investment Philosophy, Think Differently

A couple weeks ago, I flew to Los Angeles to listen to Charlie Munger at the Daily Journal annual meeting. These days, you can read the transcript of these events or even watch it on YouTube, so there is less of a practical reason to attend the actual event. But the main reason I enjoy these events is to meet with people. I have as much fun at the peripheral gatherings as I do at the main event. It’s nice […]

Saber Capital 2016 Investor Letter

Posted on Leave a commentPosted in Uncategorized

I recently wrote my annual investor letter to my clients at Saber Capital Management. I thought I’d share that letter with readers, since I posted it to my firm’s website. If you’re interested, you can view the letter here: Saber Capital Investor Letter – 2016 Review I am also in the process of updating my firm’s website. This page will occasionally be updated with investor letters and other write-ups, notes, and commentary: Saber Capital Letters and Commentary If you’re interested in […]

Analyst Ratings and the Institutional Imperative

Posted on 12 CommentsPosted in General Thoughts, Investment Quotes, Think Differently, Warren Buffett

Buffett talks a lot about the concept he calls the “institutional imperative”. In his 1989 shareholder letter, when he was describing his mistakes of the first 25 years managing Berkshire, he outlines what he means by this (emphasis mine): “My most surprising discovery: the overwhelming importance in business of an unseen force that we might call “the institutional imperative.” In business school, I was given no hint of the imperative’s existence and I did not intuitively understand it when I […]

Importance of Knowing Your Investment Boundaries (Sears Mini-Case Study)

Posted on 21 CommentsPosted in Case Studies, Charlie Munger, Investment Philosophy

A few months ago we had an interesting post/discussion on the site where Matt Brice and I share some of our research and investment ideas. The topic was Munger’s ability to quickly discard an investment opportunity if it was something he didn’t understand or a business he didn’t like. The comment that Munger made regarding the business of cattle ranching was one of the key takeaways that stayed with me from the 2016 Berkshire Annual Meeting—in short, the discipline that […]

What is Your Edge?

Posted on 30 CommentsPosted in Industry-Banks, Investment Philosophy, Saber Capital Management

A couple months ago I read an investment write-up on a large-cap stock that is one of the most widely followed and largest companies in the S&P 500. There was a comment that basically asked the following question: “What is your edge with this stock?” The implication of this question is that there isn’t any edge to be had with large, well-followed stocks, but there is an edge to be gained with small, underfollowed stocks. This is a commonly held […]