Books

The Behavior of Stock Market Manias

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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 […]

Case Studies

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

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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 […]

Case Studies

The Competitive Advantage of an Owner-Operator

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I gave a talk at an investing conference in Philadelphia last week where I discussed my overall approach to investment along with three broad categories where I think investors could focus to gain an edge (I’ll share the slides in a later post). I don’t attend many of these industry events, but it is fun to attend them occasionally, as I got to meet with a few Saber Capital clients who live in the NYC/NJ/Philly area as well as other […]

Case Studies

Notes on Credit Acceptance Corp (CACC)

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I recently made a list of a few shareholder letters I want to read, and one that I completed a few days ago was Credit Acceptance Corp (CACC). This post is not a comprehensive review of the business, as I just started reading about the company. But I thought some readers might be interested in some initial notes. (I am thinking about putting more of these “scratch notes” up as posts. If this is interesting to readers, please let me […]

Case Studies

Buffett’s Investment in Dempster Mill–A Cigar Butt

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I came across a case study that discusses Dempster Mill recently. I thought I’d post a brief summary of some notes I jotted down while reading it. Dempster Mill is a company that Buffett bought in the early 1960’s when operating his partnership. The company manufactured farm equipment, specifically windmills and water irrigation systems. It was a difficult business because the farm equipment it made was not much different than its competitors’ products, and because of these commodity-like economics, the […]

Case Studies

Lessons from the Fall of SunEdison

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“The boom is drawn out and accelerates gradually; the bust is sudden and often catastrophic.” – George Soros, Alchemy of Finance There was a very interesting article in the Wall Street Journal a few days ago on the story of “the swift rise and calamitous fall” of SunEdison (SUNE). Like a number of other promotional, Wall Street-fueled rise and falls, SunEdison became a victim of its own financial engineering, among other things. SUNE saw rapid growth thanks in large part […]

Case Studies

Base Hits vs. Swinging for the Fences

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I just got done reading Jeff Bezos’ annual letter to shareholders, which is outstanding as it always it. As I finished it, I spent a few minutes thinking about it. He references Amazon’s style of “portfolio management”. He doesn’t call it that of course, but this passage got me thinking about it. Since I wrote a post earlier in the week about portfolio management, I thought using Bezos’ letter would allow me to expand on a few other random thoughts. […]

Case Studies

Comments on Mistakes and Buffett’s Original Berkshire Purchase

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I was reading through the 2014 (last year’s) Berkshire Hathaway annual report and 10-K looking for a few things, and happened to reread Buffett’s letter from last year. I wrote a post a couple weeks ago concerning buybacks and Outerwall, and how a company that is buying back stock of a dying business is not a good use of capital. I noticed a passage in last year’s letter that is relevant to the topic—Buffett himself was attracted to buybacks on a […]

Case Studies

Outerwall, Buybacks, and Activists

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Outerwall is a stock that has been struggling as the cash flows from Red Box are drying up much faster than investors have expected. Not only that, but Outerwall management has had the troubling habit of throwing good money after bad by “investing” in things like ecoATM–kiosks that allow you to turn in your old cell phones for cash, a concept that doesn’t seem to be gaining traction. This spending on business lines that were unlikely to succeed was all in an […]

Case Studies

Some Notes on Fastenal’s Results

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I wrote a post a few months ago on Fastenal’s quarterly results. As I mentioned then, it’s one of the few companies that puts out an earnings press release that is more like a quarterly investor letter than a typical corporate press release. As I did last quarter, I thought I’d basically share some of the notes I wrote down in my FAST file as I read through the press release. This isn’t comprehensive, but I’ll probably get into the […]