VALUE INVESTING READING LINKS FROM FEBRUARY

Here are some links I have found interesting to read over the last month or so.

They may cover a wide range of topics. Some strategies / aspects of investing that may feature more often here are deep value, activism, LICs, special situation, FIRE, dividends, & global asset allocation.

I hope you find something new and useful from these.

A couple of articles from myself are at the end.

https://mattjoass.com/2019/02/09/when-to-sell/

  • A good post to think about when to sell, an often underexplored area in investing. I’ve had a tough start to 2019 and could relate to the old “thesis creep” trap! 

 

http://www.vltavafund.com/dopisy-akcionarum/short

  • If you are thinking of expanding your toolkit to short individual stocks, I would read this first. It can be a difficult, time consuming, and a stressful method to add value. I have enough trouble on the long side! 

https://mebfaber.com/2019/01/25/the-biggest-valuation-spread-in-40-years/

  • Perhaps a consensus view but I find it hard to argue against it.

 

https://theirrelevantinvestor.com/2019/02/08/miss-the-worst-days-miss-the-best-days/

  • A bit of a twist to the “time in the market” posts we always read. Having some awareness of trend following with your investing may not be totally crazy. 

 

https://ethicalboardroom.com/australias-activist-awakening/

  • An article from Sandon Capital on activism, company boards and corporate governance. I would also like to see company boards formed with more of an influence from shareholders rather than more of a “mates club” look. I have been disappointed with the board of the Australian Leaders Fund (ALF). On the other hand very pleased with how Spicers (SRS) has gone, where the new board involved key shareholders with real skin in the game.

https://scholar.harvard.edu/files/shleifer/files/investorsentiment.pdf

  • Warning very long academic read for investing geeks interested about the US equivalent of LICs, Closed End Funds (CEFs). Written in 1991 but I see the same trends in LICs today, perhaps nothing much has changed?

https://www.businesswire.com/news/home/20190225005536/en/Voce-Capital-

  • A shareholder activist letter that gets personal! Sometimes I wish my struggling stocks I own and their management teams were subject to some hard truths with a letter like this. Some say Australia is the defamation capital of the world so probably unlikely.

 

https://www.theemergingmarketsinvestor.com/active-vs-passive-in-emerging-markets/

  • Thanks to reader John for this link above and below. It is an area I want to learn more about whether active managers in general are doing better in less developed markets? Their marketing teams like spinning the story that they can!

https://www.credit-suisse.com/corporate/en/articles/news-and-expertise/global-investment-returns-yearbook-201902.html

  • I consider the CS yearbook a must read for investors for the big picture overview. A very long term historical view. Think twice before you extrapolate and easy 7% real return when planning your retirement. Don’t forget taxes, fees and the fact you will unfortunately not likely pick the best countries over the next 50 years. And it will be a volatile ride! Good luck anyway 😊

https://www.activistinsight.com/wp-content/uploads/2017/02/AIAnnualReview_2019.pdf?x43166

  • If you think the CS yearbook is a long read then be careful of the above. Those interested in activist investing may enjoy this yearly review. Seems to be a view that activists are turning their focus to Europe and Asia, as less opportunities present themselves in the US.

https://lmialerts.blogspot.com/2019/02/did-ellerston-asian-investments-mislead.html?m=1

  • This blog article raises some questions over Ellerston Asian Investments (EAI) and their communications and decision to partially underwrite the recent option issue.

 

Finally a couple of articles from me

https://www.raskmedia.com.au/2019/02/07/heres-how-labors-franking-credit-plan-could-affect-wam-capital-asxwam-shares/

https://www.raskmedia.com.au/2019/02/25/are-ellerston-asian-investments-asxeai-shares-a-buy-after-options-expiry/

(Note I was less than impressed by the small underwriting of the options they did shortly after I wrote this article. It doesn’t change my views much (minor extra supply and dilution after all), but I think Ellerston should give up these games letting in new shareholders who dilute existing shareholders. They did something similar with EGI a year or so ago. They will of course mention the usual benefits of a larger fund size and say they know what is best. Perhaps they do. I would guess though if they asked existing shareholders in a poll that a large majority would disapprove of the underwriting. 

As usual thanks for dropping by on the blog and please feel welcome to share your opinions below.

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