My take on Weight Watchers ($WTW)

My take on Weight Watchers ($WTW)

Conscious that I haven’t written a post for over a couple of weeks, and without any good prospective investments to write about, I thought I would do an article on the flip side of the coin – i.e. find a terrible company, selling at an absurd valuation and metaphorically tear it to pieces. But then I got thinking, it isn’t hard to find a rubbish investment, neither is it particularly useful to you, the reader, for me to point out that selling at 100x sales is ludicrous. You already know it (I hope).

It would be more useful for me to review a company that I believe is a poor investment, but that others may view as a value investment. When I got to thinking which company to cover, there was one that stood out in my mind that I have seen recommended on some other blogs, Weight Watchers (NYSE:WTW).read more

Codan Limited ($CDA.AX)

Codan Limited ($CDA.AX)

I went over the investment thesis for Codan Limited ($CDA.AX) in one of my portfolio updates in June. Codan is a company that earned $45m in 2013 and now has a market cap of just $140m. I bought shares at $0.78 and since then shares are only slightly ahead at $0.85, so this is still a good investment opportunity in my opinion. This post isn’t to go over the investment thesis again, but to briefly highlight the recent AGM and chairman’s statement, which I think make this investment even more compelling than before.read more

Berkshire Hathaway ($BRK)

Berkshire Hathaway ($BRK)

I first bought Berkshire Hathaway shares 3 years ago, and a few days ago I sold the entire position. This might be a somewhat controversial decision and when I first bought shares I envisaged holding them forever. But I don’t see that much upside to Berkshire at the moment. That’s not to say I am not a fan of Buffett. I think his investment success speaks for itself and Berkshire has been a highly profitable investment over the last few decades. But there are several reasons I have exited this position, many of which are probably at odds with value investors’ opinions in general. Here is my reasoningread more

Portfolio Update

Portfolio Update

This is a painful portfolio update for me, two of my holdings are down considerably and I’m sitting on losses not because of an error in judgement (I will happily admit I made errors but I had realized that) but because of greed. I risked a lot of money to make a further 1% on a trade. That greed for a fraction has cost me over 40% on each position. Lucky for me (or possibly due to intelligent position sizing), these positions were not large and haven’t cost my portfolio much. My pride has taken the brunt of the hit as opposed to my wallet. Hopefully by telling the tale of my woes readers will avoid similar pitfalls themselves.read more

Legacy Oil – $LEG.TO

Legacy Oil – $LEG.TO

Stocks have been moving down recently, and none more so than Oil & Gas companies. Lots of names in the industry are trading at just half their 52 week highs. The reason often given in the news is forecast lower global demand for oil which is being interpreted as bearish for stocks in general. However it has, in mine and others opinion, more to do with the big increase in supply and production from North America predicted in the future. The USA is on track to become the largest producer of oil in the world.

Legacy Oil is a low cost North American producer that can remain profitable at low oil prices and has large upside if oil prices are high in the future.read more

Why was Buffett wrong on Tesco?

Why was Buffett wrong on Tesco?

Last week Warren Buffett was frank on CNBC and admitted that he made a mistake investing in Tesco ($TSCO.L). It’s hard to argue with him, shares in Tesco have gone only one way since he first invested in them in 2007.

I myself am among the unlucky Tesco shareholders, however was fortunate in early 2013 to realize my folly and sell almost all my shares (and even make a small profit). Though Tesco made many obvious mistakes such as its failed entry into the US market, it is actually its home market, the UK, which has contributed to its disastrous share price performance. I think the tale of Tesco highlights some important areas of danger that investors often fall foul of, particularly relying on financial metrics while giving too little thought to qualitative factors of a company and how it does business.read more

Brief intro to Dark Pools

Brief intro to Dark Pools

The readership of this blog is quite varied both in geographical terms, but also I think in investment experience. Many people that manage their own money don’t actually have any formal qualifications in finance. So I’m sure many readers will respond the same way I did some time ago when I asked a friend what was he doing his Masters dissertation on and he replied ‘Dark pools’ – by pulling a confused grimace. I think it’s worth introducing these dark pools to those of you that know little or nothing about them.read more

Mecom Group – $MEC.L

Mecom Group – $MEC.L

Mecom Group is a newspaper publisher I’ve been looking at over the last couple of days. It is an interesting special situation which looks appealing. A cash offer has been made for the shares at 155p and the shares currently trade at 140p. The takeover has already been approved by shareholders, but the deal has been delayed while a regulator conducts an investigation into whether it will impede competition. Their preliminary findings were that it does which is why the market is pricing in a big discount.

Regardless of whether the takeover happens, the company currently trades at an EV/EBITDA (adjusted) of just 2.5 and will surely be an acquisition target for other companies if this deal falls through. If the takeover fails you will be left holding a cheap company and can probably buy more shares even cheaper after it is announced. Alternatively if it happens you’ll net an 11% gain, probably in around 2-3 months.read more

Bouvet Thesis – $BOUVET.OL

Bouvet Thesis – $BOUVET.OL

One of my most successful investments over the last couple of years was in Kentz, which was a typical Buffett buy and hold forever type stock. Kentz operates in the oil and gas industry, offering engineering and construction services with high returns on capital. I bought it at a time when the oil & gas industry wasn’t doing too well and it was around a P/E of 13, but Kentz went from strength to strength and netted me a 134% gain in just over a year. If they hadn’t been taken over I would still hold them.

But moving onto Bouvet, this is a Norwegian IT consultant and bears some similarities to Kentz.read more

Independence Options Play

Independence Options Play

This week is all about independence in the UK. Scotland votes on Thursday over whether it wants to become an independent country or not. Both sides of the campaign have been releasing “information” [read: propaganda] about what independence means for Scotland and also the UK. Leaving aside my personal views on the politics, I believe that independence will be incredibly damaging economically to Scotland in the short term and that will have knock on effects for the UK and hence my portfolio. I believe that the ‘Yes’ campaign is deceiving a lot of people, blinding them to the harsh reality that independence will bring. I have no objection to independence, I just think people should know what they are voting for. Here are my random thoughts on the consequences and how to profit from any market turmoil via options.read more


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