Business History l Investment Cases l Financial Data
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The Best Deal Charlie Munger Ever Saw
Conwood Case Study
Slide deck version: turtlebay.io/notes
I never expected to see distributions from EACO. But thanks to @alluvialcapital, this morning I received a payout equal to almost half my basis.
More importantly, the company now has stronger protections for minority owners.
Thanks for standing up for all shareholders, Dave!
Buffett ran a 30X+ leveraged trading operation?
Salomon is a window into how Warren Buffett thought about and managed a traditional market-making business. Richard’s FT article is worth a read. So are Buffett’s letters to Salomon shareholders.
Here’s Buffett’s first letter:
35 years ago this summer, Warren Buffet saved the storied investment bank Salomon Brothers. I spoke with Mr. Buffett and those who helped him out of the crises such as Eric Rosenfeld and John Macfarlane.
Here's the full story
ft.com/content/03686827-1e80…
Turtle Bay retweeted
The 1970s: Warren Buffett's Defining Decade
People don't realize how egregiously mispriced stocks were in the 70s.
Let's go through a buch of examples:
Turtle Bay retweeted
Yesterday I talked with Unemployed Capital Allocator (@atelicinvest) about where AI is and isn’t eating SaaS. Highlights:
- Portfolio is ~85% software, 5M-500M mcap, mostly outside the US
- Playbook is to buy software at 0.5x to 1.5x ARR, companies that the market expects to die in 2-3 years, that he doesn’t expect to die
- “Software” is too broad of a term, need to go higher resolution than that
- Likes protected niches, software for the real world economy, often with late adopter customers
- Sees real risks from AI with increased competition, software execs making dumb AI capex, and some workflows collapsing
- Built his own software to help him with his investing process
Edited transcript below:
One of the best investments ever:
In honor of 50 years of Apple, we're sharing - for the first time ever - Don Valentine's original 1977 memo for Sequoia's investment into Apple Computer. #Apple50
Apple’s long-term record:
drive.google.com/file/u/1/d/…
Onex taking control of Catlin's new insurer.
Bobby Le Blanc:
- Worked at Berkshire in the '90s
- Still a director at Berkshire's LifeCo
Worth watching what he does here.
bloomberg.com/news/articles/…
This is good advice from DCS.
Here's another area to look at: "coattails"
Small deals with thin floats where you can buy a few shares and tag along. Focus on situations where there's an exit baked into the deal.
One of my writeups from when I started investing:
If I had $100,000 I'd do this:
- Read every filing.
- Arb odd lot tenders, new releases, liquidations, etc.
- Own 2-3 tiny companies trading at ~3x earnings and less than net cash.
I bet a smart person could do ~50% CAGR.
Issue is it takes all your time. Not investment advice.
Abrams closed on ContextLogic yesterday
Interesting acquisition vehicle structure:
- Holding co: No CEO, no Abrams/BC comp
- Operating co's: Top talent, uncapped comp
- Assets: Niche, long-duration, "obvious" moat
- Model: Swedish serial acquirers
The company has $2.9B of NOLs.
Interesting topic.
Clean. Simple. Honest. These three things impact long-term thinking more than reporting frequency. Take Costco, Fastenal and Progressive. True examples of “taking a 50 to 100 year view.” Yet all report monthly.
The standard should be Costco. Not China.
Good article on Airbus from today's FT:
Airbus is one of Berkshire's undisclosed foreign holdings. They bought $750M of stock during COVID.
ft.com/content/929073a9-c012…
