Q3 2019 Letters

The Fund returned -7.60% for the third quarter 2019. This compares to returns of 1.73% for the S&P and 0.77% for the Russell 2000. While underperformance is never fun, it is a requirement if we want to generate outsized (and differentiated) returns over the standard benchmarks. The price paid for long-term outperformance will be short-term … Continue reading Q3 2019 Letters

A Cheap, Illiquid South African Timber Company At Basement Prices (YRK)

This post is inspired by Rudi van Niekerk. Rudi runs Desert Lion Capital, an investment partnership dedicated to South African stocks. Scott Miller (of Greenhaven Road Capital) and Chuck Royce seeded Rudi's fund. Desert Lion gives US investors a chance to capitalize on the many price dislocations within the region. After reading some of Rudi's … Continue reading A Cheap, Illiquid South African Timber Company At Basement Prices (YRK)

Butler National Corp (BUKS): Two Good Businesses & Lots of Hair

Butler National Corp (BUKS) is a micro-cap company ($25M market cap) operating two very different businesses: Aerospace / Avionics and Casino Gaming Management. Both businesses generate healthy cashflows and shares are currently trading less than 6x next years earnings. Furthermore, we believe current share prices offer investors a chance to buy the Aerospace business for 10x 2019 … Continue reading Butler National Corp (BUKS): Two Good Businesses & Lots of Hair

Arlington Value Investors Letters: Five Invaluable Lessons

**As you may know, like Batman, I lead a double-life. Let me explain. I write for this blog but am also the value investing writer for Macro-Ops.com. Below is my latest post from Macro-Ops. Check out the original here: https://macro-ops.com/arlington-value-investor-letters-five-invaluable-lessons-on-value-investing/** There aren’t many investors compounding capital at double digits over the course of decades and … Continue reading Arlington Value Investors Letters: Five Invaluable Lessons

Corteva (CTVA): Valuing The Seed & Crop Protector As It Rings The Bell

Corteva, Inc. (CTVA) is a leader in global seed and crop protection products. The company provides farmers with the right mix of seeds, crop protection and digital solutions to maximize yields and increase profitability. Their mission is to ensure an abundant food supply for the growing global population. Corteva is going public on Monday, June … Continue reading Corteva (CTVA): Valuing The Seed & Crop Protector As It Rings The Bell

When Models Fail: How Financial Models Subsidize Poor Valuation Work (TSLA & Ark Invest)

Valuation is a vital step in the process of investment analysis. Without proper valuation work, an investor cannot fully gauge the validity of their ideas. There are various tools investors have at their disposal in order to value companies, such as multiple valuation (EV/EBITDA), net asset value, sum-of-the-parts (SOTP), discounted cash flow (DCF), book value, … Continue reading When Models Fail: How Financial Models Subsidize Poor Valuation Work (TSLA & Ark Invest)