London Conference<\/a><\/strong><\/h4>\nThe next London Value Investor Conference\u00a0will take place on\u00a0May 12th 2020<\/p>\n
\nNew York Conference<\/a><\/strong><\/h4>\nThe speaker line-up for Value Invest New York on\u00a0December 3rd 2019\u00a0has been announced<\/p>\n
\n$700\u00a0VINY Discount<\/strong><\/a><\/h4>\nUse “VID-VINY-19” <\/strong>for\u00a0$700 off<\/strong> a ticket to Value Invest\u00a0New York (expires Sept 30th)<\/p>\n![\"\"](\"https:\/\/gallery.mailchimp.com\/027a17ca80d041a7e68d6b6b7\/images\/79c55666-a939-4bac-a2e8-5ebf5d749af2.png\")
<\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/h3>\n<\/h3>\nJohn Authers: Quality Stocks Are An Overcrowded Trade<\/a><\/h3>\n“We need to be careful with definitions. Everyone would like to describe their stock as a quality investment. And even the quants who have broken down equity investing into a series of factors that drive returns are not sure how to define the quality factor. Broadly, it tends to refer to reliable profitability, and a strong balance sheet, in some combination.”<\/em><\/p>\nValue Investor Insight\u00a0Interview With Mark Pearson of Arcus Investment<\/h3>\n
“Parts companies like Ahresty have followed\u00a0the big Japanese automobile manufacturers\u00a0overseas as they\u2019ve successfully\u00a0established global footprints. There was\u00a0always sort of a bargain struck, that if the\u00a0parts makers came along they would be\u00a0allowed to sell to others, and Ahresty has\u00a0built a good business selling to companies\u00a0such as General Motors and Volkswagen\u00a0as well. It supplies customers from its production\u00a0bases in Japan, China, Thailand,\u00a0India, Mexico and the U.S.”<\/em><\/p>\nThe Big Short\u2019s Michael Burry Sees a Bubble in Passive Investing<\/a><\/h3>\n“The bubble in passive investing through ETFs and index funds as well as the trend to very\u00a0large size among asset managers has orphaned smaller value-type securities globally…There is all this opportunity, but so few active managers are looking to take advantage.”<\/em><\/p>\nWarren Buffett on Berkshire’s Investments in US Banks<\/a><\/h3>\nBuffett covered a lot in\u00a0this new interview including comments on China, Costco, Elon Musk and more. Commenting on Berkshire’s investments in banks, he said: “They’re businesses I understand and I like the price at which they’re selling relative to their future prospects. I think 10 years from now that they will be worth more money and I feel there’s a very high probability that I’m right. I don’t think they will turn out to be the best investments at all, of the whole\u00a0panoply of things you could do, but I’m pretty sure that they won’t disappoint me.”<\/em>\u00a0[Comments on banks at 53:40]<\/a><\/p>\nJonathan Boyar in Forbes: Open Letter to James Dolan Outlining Ways to Unlock Shareholder Value<\/a><\/h3>\n“Sometimes I think of you as the Rodney Dangerfield of investing\u2014investors just don\u2019t give you the respect you deserve. They\u2019ve gone so far as to assign a ‘Dolan discount’ to entities you control\u2014even though long-term shareholders of both Cablevision and Madison Square Garden (MSG) (my firm included) have been handsomely rewarded thanks to your shareholder-friendly actions. But your latest plan to build a concert\/entertainment venue, the Sphere, in Las Vegas for $1.2 to $1.7 billion (and that\u2019s just for the Las Vegas version) makes me wonder whether a ‘Dolan discount\u201d’ is beginning to make sense.”<\/em><\/p>\nRajiv Jain Discusses Portfolio Management<\/a><\/h3>\n“I think the way to look at or to assess a portfolio manager or track record is [to ask] how do they do in different environments? So for example if you look at a ‘growth’ \u00a0manager today, most of them look like geniuses. Most of them won’t have a good track record – if you go back to the 2000-2003 era – how many of them actually did well? So the whole ‘growth and value’ debate I personally feel is nonsensical in a way because why would you consciously overpay for anything?”<\/em> [This discussion is at 31.30]<\/p>\nHow a Cheap, Brutally Efficient Grocery Chain is Upending America’s Supermarkets<\/a><\/h3>\n“When Walmart\u2019s US CEO Greg Foran invokes words like ‘fierce’, ‘good’ and ‘clever’ in speaking almost admiringly about one of his competitors, he\u2019s not referring to Amazon. He isn\u2019t pointing to large chains like Kroger or Albertsons, dollar stores like Dollar General or online entrants like FreshDirect and Instacart.\u00a0Foran is describing Aldi.”<\/em><\/p>\nBarron’s: History Says Apple and Amazon Probably Won\u2019t Be the Next Decade\u2019s Best Stocks<\/a><\/h3>\n“Research from Gavekal\u2019s Louis-Vincent Gave…looked at the top-10 stocks at the beginning of each decade since 1980. His findings demonstrated that the top-10 stocks by market cap rarely stay there during the following 10 years. Instead, prevalent investing patterns changed drastically, as the old winners were replaced with the new.”<\/em><\/p>\nHollAnd Advisors: Open Letter to Mike Ashley<\/a><\/h3>\n“<\/strong>In recent years, as you have sought to change the direction of Sports Direct (SPD) and invest for its future, many of the fair weather shareholders of 2011-15 have left you. They have been replaced by those that see value in your business and the skills you bring to it. To be a SPD shareholder in 2019 is to be someone who is backing Mike Ashley and taking the longer term view. As such most of your investors today are aligned with you. Please treat us accordingly.”<\/em><\/p>\nAll of the World\u2019s Money and Markets in One Visualization<\/a><\/h3>\nThis interesting visualisation from The Money Project compares the size of various asset classes, companies, people and other items. Each block in the visualisation represents $100bn.<\/p>\n
John Authers:\u00a0Bonds Meet the Four Criteria for Defining a Bubble<\/a><\/h3>\n“There has been a tendency since the financial crisis to label any market that is rallying or deemed overvalued to be in a \u201cbubble.\u201d The word has become overused and debased. But if we treat it rigorously, the bubble concept is still vital in navigating financial markets. And the rigorous treatment reveals that bonds really are in a bubble.”<\/em><\/p>\nJohn Hempton: Thinking Aloud About Bank Margins – Part 2<\/a><\/h3>\n“<\/strong>Just over twenty one years ago The Economist wrote a glowing article about what was then a roll-up of British High Street banks. It was Lloyds TSB…And then it all went horribly wrong. The bank took only a decade to be nationalised.\u00a0What went wrong was competition. At the time Lloyds revenue to risk weighted assets was 8 percent. This was the highest number I have ever seen on a major bank anywhere.”<\/em><\/p>\nSimon Gergel:\u00a0Oil and Tobacco Aren’t Dead, Just Look at Their Profits<\/a><\/h3>\n\u201cI love the premise of that question [that oil and tobacco are sectors in decline], because oil actually isn\u2019t in decline. The world is using more oil every year and has done since oil started being used and we still aren\u2019t at peak oil. It may be another 10 or 15 years before we get to the peak and then I think you\u2019ll probably see a gentle decline in oil. At the same time demand for gas is growing extremely fast. If you look at companies such as BP and particularly Royal Dutch Shell they produce huge amounts of gas. Gas demand is growing structurally and will do for decades so these aren\u2019t necessarily businesses in decline.\u201d<\/em><\/p>\nRobert Shiller on US Housing: ‘We’re in 2005 Again’<\/a><\/h3>\n“I have seen this happen before. We\u2019re back in 2005 again when the rate of increase in home prices was slowing down a lot but still going up. It would not take me be any surprise at all if in the next year or two we saw modest declines in home prices and if things play out right, there could be bigger declines. It has happened before on a number of occasions.\u201d<\/em><\/p>\nDeloitte: The Decline and Rise of London<\/a><\/h3>\n“The familiar story of London as the powerhouse of the British economy is relatively new. Within living memory London was a city in decline. Its population peaked in the late 1930s before going into a long decline. London\u2019s population shrank by over a fifth between 1941 and 1992, losing two million people at a time of rapid growth in the UK\u2019s wider population. Its economy also underperformed. The economic historian, Professor Nicholas Crafts, estimates that the premium of London GDP per head over the UK average shrunk from a peak of 65% in 1911 to 23% by 1971.”<\/em><\/p>\nOaktree Insights: Structured Credit Primer<\/a><\/h3>\n“Structured credit got a bad rap in association with the excesses in the subprime mortgage market preceding the Global Financial Crisis (GFC). It should be noted, though, that not every structured product played the same role or was affected the same during the last recession. Plus, the asset class has undergone significant reform since then. Today it offers materially improved investor protections while presenting potential for differentiated returns and a favorable relative-value proposition.”<\/em><\/p>\n<\/p>","protected":false},"excerpt":{"rendered":"WELCOME TO THE 42ND EDITION OF VALUE INVESTOR DIGEST In this edition we feature two articles from John Authers; the first is titled “Quality Stocks Are An Overcrowded Trade”,\u00a0there’s also<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"_links":{"self":[{"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/posts\/692"}],"collection":[{"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/comments?post=692"}],"version-history":[{"count":1,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/posts\/692\/revisions"}],"predecessor-version":[{"id":693,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/posts\/692\/revisions\/693"}],"wp:attachment":[{"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/media?parent=692"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/categories?post=692"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/tags?post=692"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![\"\"](\"https:\/\/gallery.mailchimp.com\/027a17ca80d041a7e68d6b6b7\/images\/c1eadc5a-1561-4895-9b7e-0471a266934f.png\")
<\/a><\/td>\nNew York Conference<\/a><\/strong><\/h4>\nThe speaker line-up for Value Invest New York on\u00a0December 3rd 2019\u00a0has been announced<\/p>\n
\n$700\u00a0VINY Discount<\/strong><\/a><\/h4>\nUse “VID-VINY-19” <\/strong>for\u00a0$700 off<\/strong> a ticket to Value Invest\u00a0New York (expires Sept 30th)<\/p>\n<\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/h3>\n<\/h3>\nJohn Authers: Quality Stocks Are An Overcrowded Trade<\/a><\/h3>\n“We need to be careful with definitions. Everyone would like to describe their stock as a quality investment. And even the quants who have broken down equity investing into a series of factors that drive returns are not sure how to define the quality factor. Broadly, it tends to refer to reliable profitability, and a strong balance sheet, in some combination.”<\/em><\/p>\nValue Investor Insight\u00a0Interview With Mark Pearson of Arcus Investment<\/h3>\n
“Parts companies like Ahresty have followed\u00a0the big Japanese automobile manufacturers\u00a0overseas as they\u2019ve successfully\u00a0established global footprints. There was\u00a0always sort of a bargain struck, that if the\u00a0parts makers came along they would be\u00a0allowed to sell to others, and Ahresty has\u00a0built a good business selling to companies\u00a0such as General Motors and Volkswagen\u00a0as well. It supplies customers from its production\u00a0bases in Japan, China, Thailand,\u00a0India, Mexico and the U.S.”<\/em><\/p>\nThe Big Short\u2019s Michael Burry Sees a Bubble in Passive Investing<\/a><\/h3>\n“The bubble in passive investing through ETFs and index funds as well as the trend to very\u00a0large size among asset managers has orphaned smaller value-type securities globally…There is all this opportunity, but so few active managers are looking to take advantage.”<\/em><\/p>\nWarren Buffett on Berkshire’s Investments in US Banks<\/a><\/h3>\nBuffett covered a lot in\u00a0this new interview including comments on China, Costco, Elon Musk and more. Commenting on Berkshire’s investments in banks, he said: “They’re businesses I understand and I like the price at which they’re selling relative to their future prospects. I think 10 years from now that they will be worth more money and I feel there’s a very high probability that I’m right. I don’t think they will turn out to be the best investments at all, of the whole\u00a0panoply of things you could do, but I’m pretty sure that they won’t disappoint me.”<\/em>\u00a0[Comments on banks at 53:40]<\/a><\/p>\nJonathan Boyar in Forbes: Open Letter to James Dolan Outlining Ways to Unlock Shareholder Value<\/a><\/h3>\n“Sometimes I think of you as the Rodney Dangerfield of investing\u2014investors just don\u2019t give you the respect you deserve. They\u2019ve gone so far as to assign a ‘Dolan discount’ to entities you control\u2014even though long-term shareholders of both Cablevision and Madison Square Garden (MSG) (my firm included) have been handsomely rewarded thanks to your shareholder-friendly actions. But your latest plan to build a concert\/entertainment venue, the Sphere, in Las Vegas for $1.2 to $1.7 billion (and that\u2019s just for the Las Vegas version) makes me wonder whether a ‘Dolan discount\u201d’ is beginning to make sense.”<\/em><\/p>\nRajiv Jain Discusses Portfolio Management<\/a><\/h3>\n“I think the way to look at or to assess a portfolio manager or track record is [to ask] how do they do in different environments? So for example if you look at a ‘growth’ \u00a0manager today, most of them look like geniuses. Most of them won’t have a good track record – if you go back to the 2000-2003 era – how many of them actually did well? So the whole ‘growth and value’ debate I personally feel is nonsensical in a way because why would you consciously overpay for anything?”<\/em> [This discussion is at 31.30]<\/p>\nHow a Cheap, Brutally Efficient Grocery Chain is Upending America’s Supermarkets<\/a><\/h3>\n“When Walmart\u2019s US CEO Greg Foran invokes words like ‘fierce’, ‘good’ and ‘clever’ in speaking almost admiringly about one of his competitors, he\u2019s not referring to Amazon. He isn\u2019t pointing to large chains like Kroger or Albertsons, dollar stores like Dollar General or online entrants like FreshDirect and Instacart.\u00a0Foran is describing Aldi.”<\/em><\/p>\nBarron’s: History Says Apple and Amazon Probably Won\u2019t Be the Next Decade\u2019s Best Stocks<\/a><\/h3>\n“Research from Gavekal\u2019s Louis-Vincent Gave…looked at the top-10 stocks at the beginning of each decade since 1980. His findings demonstrated that the top-10 stocks by market cap rarely stay there during the following 10 years. Instead, prevalent investing patterns changed drastically, as the old winners were replaced with the new.”<\/em><\/p>\nHollAnd Advisors: Open Letter to Mike Ashley<\/a><\/h3>\n“<\/strong>In recent years, as you have sought to change the direction of Sports Direct (SPD) and invest for its future, many of the fair weather shareholders of 2011-15 have left you. They have been replaced by those that see value in your business and the skills you bring to it. To be a SPD shareholder in 2019 is to be someone who is backing Mike Ashley and taking the longer term view. As such most of your investors today are aligned with you. Please treat us accordingly.”<\/em><\/p>\nAll of the World\u2019s Money and Markets in One Visualization<\/a><\/h3>\nThis interesting visualisation from The Money Project compares the size of various asset classes, companies, people and other items. Each block in the visualisation represents $100bn.<\/p>\n
John Authers:\u00a0Bonds Meet the Four Criteria for Defining a Bubble<\/a><\/h3>\n“There has been a tendency since the financial crisis to label any market that is rallying or deemed overvalued to be in a \u201cbubble.\u201d The word has become overused and debased. But if we treat it rigorously, the bubble concept is still vital in navigating financial markets. And the rigorous treatment reveals that bonds really are in a bubble.”<\/em><\/p>\nJohn Hempton: Thinking Aloud About Bank Margins – Part 2<\/a><\/h3>\n“<\/strong>Just over twenty one years ago The Economist wrote a glowing article about what was then a roll-up of British High Street banks. It was Lloyds TSB…And then it all went horribly wrong. The bank took only a decade to be nationalised.\u00a0What went wrong was competition. At the time Lloyds revenue to risk weighted assets was 8 percent. This was the highest number I have ever seen on a major bank anywhere.”<\/em><\/p>\nSimon Gergel:\u00a0Oil and Tobacco Aren’t Dead, Just Look at Their Profits<\/a><\/h3>\n\u201cI love the premise of that question [that oil and tobacco are sectors in decline], because oil actually isn\u2019t in decline. The world is using more oil every year and has done since oil started being used and we still aren\u2019t at peak oil. It may be another 10 or 15 years before we get to the peak and then I think you\u2019ll probably see a gentle decline in oil. At the same time demand for gas is growing extremely fast. If you look at companies such as BP and particularly Royal Dutch Shell they produce huge amounts of gas. Gas demand is growing structurally and will do for decades so these aren\u2019t necessarily businesses in decline.\u201d<\/em><\/p>\nRobert Shiller on US Housing: ‘We’re in 2005 Again’<\/a><\/h3>\n“I have seen this happen before. We\u2019re back in 2005 again when the rate of increase in home prices was slowing down a lot but still going up. It would not take me be any surprise at all if in the next year or two we saw modest declines in home prices and if things play out right, there could be bigger declines. It has happened before on a number of occasions.\u201d<\/em><\/p>\nDeloitte: The Decline and Rise of London<\/a><\/h3>\n“The familiar story of London as the powerhouse of the British economy is relatively new. Within living memory London was a city in decline. Its population peaked in the late 1930s before going into a long decline. London\u2019s population shrank by over a fifth between 1941 and 1992, losing two million people at a time of rapid growth in the UK\u2019s wider population. Its economy also underperformed. The economic historian, Professor Nicholas Crafts, estimates that the premium of London GDP per head over the UK average shrunk from a peak of 65% in 1911 to 23% by 1971.”<\/em><\/p>\nOaktree Insights: Structured Credit Primer<\/a><\/h3>\n“Structured credit got a bad rap in association with the excesses in the subprime mortgage market preceding the Global Financial Crisis (GFC). It should be noted, though, that not every structured product played the same role or was affected the same during the last recession. Plus, the asset class has undergone significant reform since then. Today it offers materially improved investor protections while presenting potential for differentiated returns and a favorable relative-value proposition.”<\/em><\/p>\n<\/p>","protected":false},"excerpt":{"rendered":"WELCOME TO THE 42ND EDITION OF VALUE INVESTOR DIGEST In this edition we feature two articles from John Authers; the first is titled “Quality Stocks Are An Overcrowded Trade”,\u00a0there’s also<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"_links":{"self":[{"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/posts\/692"}],"collection":[{"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/comments?post=692"}],"version-history":[{"count":1,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/posts\/692\/revisions"}],"predecessor-version":[{"id":693,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/posts\/692\/revisions\/693"}],"wp:attachment":[{"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/media?parent=692"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/categories?post=692"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/tags?post=692"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
$700\u00a0VINY Discount<\/strong><\/a><\/h4>\nUse “VID-VINY-19” <\/strong>for\u00a0$700 off<\/strong> a ticket to Value Invest\u00a0New York (expires Sept 30th)<\/p>\n<\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/h3>\n<\/h3>\nJohn Authers: Quality Stocks Are An Overcrowded Trade<\/a><\/h3>\n“We need to be careful with definitions. Everyone would like to describe their stock as a quality investment. And even the quants who have broken down equity investing into a series of factors that drive returns are not sure how to define the quality factor. Broadly, it tends to refer to reliable profitability, and a strong balance sheet, in some combination.”<\/em><\/p>\nValue Investor Insight\u00a0Interview With Mark Pearson of Arcus Investment<\/h3>\n
“Parts companies like Ahresty have followed\u00a0the big Japanese automobile manufacturers\u00a0overseas as they\u2019ve successfully\u00a0established global footprints. There was\u00a0always sort of a bargain struck, that if the\u00a0parts makers came along they would be\u00a0allowed to sell to others, and Ahresty has\u00a0built a good business selling to companies\u00a0such as General Motors and Volkswagen\u00a0as well. It supplies customers from its production\u00a0bases in Japan, China, Thailand,\u00a0India, Mexico and the U.S.”<\/em><\/p>\nThe Big Short\u2019s Michael Burry Sees a Bubble in Passive Investing<\/a><\/h3>\n“The bubble in passive investing through ETFs and index funds as well as the trend to very\u00a0large size among asset managers has orphaned smaller value-type securities globally…There is all this opportunity, but so few active managers are looking to take advantage.”<\/em><\/p>\nWarren Buffett on Berkshire’s Investments in US Banks<\/a><\/h3>\nBuffett covered a lot in\u00a0this new interview including comments on China, Costco, Elon Musk and more. Commenting on Berkshire’s investments in banks, he said: “They’re businesses I understand and I like the price at which they’re selling relative to their future prospects. I think 10 years from now that they will be worth more money and I feel there’s a very high probability that I’m right. I don’t think they will turn out to be the best investments at all, of the whole\u00a0panoply of things you could do, but I’m pretty sure that they won’t disappoint me.”<\/em>\u00a0[Comments on banks at 53:40]<\/a><\/p>\nJonathan Boyar in Forbes: Open Letter to James Dolan Outlining Ways to Unlock Shareholder Value<\/a><\/h3>\n“Sometimes I think of you as the Rodney Dangerfield of investing\u2014investors just don\u2019t give you the respect you deserve. They\u2019ve gone so far as to assign a ‘Dolan discount’ to entities you control\u2014even though long-term shareholders of both Cablevision and Madison Square Garden (MSG) (my firm included) have been handsomely rewarded thanks to your shareholder-friendly actions. But your latest plan to build a concert\/entertainment venue, the Sphere, in Las Vegas for $1.2 to $1.7 billion (and that\u2019s just for the Las Vegas version) makes me wonder whether a ‘Dolan discount\u201d’ is beginning to make sense.”<\/em><\/p>\nRajiv Jain Discusses Portfolio Management<\/a><\/h3>\n“I think the way to look at or to assess a portfolio manager or track record is [to ask] how do they do in different environments? So for example if you look at a ‘growth’ \u00a0manager today, most of them look like geniuses. Most of them won’t have a good track record – if you go back to the 2000-2003 era – how many of them actually did well? So the whole ‘growth and value’ debate I personally feel is nonsensical in a way because why would you consciously overpay for anything?”<\/em> [This discussion is at 31.30]<\/p>\nHow a Cheap, Brutally Efficient Grocery Chain is Upending America’s Supermarkets<\/a><\/h3>\n“When Walmart\u2019s US CEO Greg Foran invokes words like ‘fierce’, ‘good’ and ‘clever’ in speaking almost admiringly about one of his competitors, he\u2019s not referring to Amazon. He isn\u2019t pointing to large chains like Kroger or Albertsons, dollar stores like Dollar General or online entrants like FreshDirect and Instacart.\u00a0Foran is describing Aldi.”<\/em><\/p>\nBarron’s: History Says Apple and Amazon Probably Won\u2019t Be the Next Decade\u2019s Best Stocks<\/a><\/h3>\n“Research from Gavekal\u2019s Louis-Vincent Gave…looked at the top-10 stocks at the beginning of each decade since 1980. His findings demonstrated that the top-10 stocks by market cap rarely stay there during the following 10 years. Instead, prevalent investing patterns changed drastically, as the old winners were replaced with the new.”<\/em><\/p>\nHollAnd Advisors: Open Letter to Mike Ashley<\/a><\/h3>\n“<\/strong>In recent years, as you have sought to change the direction of Sports Direct (SPD) and invest for its future, many of the fair weather shareholders of 2011-15 have left you. They have been replaced by those that see value in your business and the skills you bring to it. To be a SPD shareholder in 2019 is to be someone who is backing Mike Ashley and taking the longer term view. As such most of your investors today are aligned with you. Please treat us accordingly.”<\/em><\/p>\nAll of the World\u2019s Money and Markets in One Visualization<\/a><\/h3>\nThis interesting visualisation from The Money Project compares the size of various asset classes, companies, people and other items. Each block in the visualisation represents $100bn.<\/p>\n
John Authers:\u00a0Bonds Meet the Four Criteria for Defining a Bubble<\/a><\/h3>\n“There has been a tendency since the financial crisis to label any market that is rallying or deemed overvalued to be in a \u201cbubble.\u201d The word has become overused and debased. But if we treat it rigorously, the bubble concept is still vital in navigating financial markets. And the rigorous treatment reveals that bonds really are in a bubble.”<\/em><\/p>\nJohn Hempton: Thinking Aloud About Bank Margins – Part 2<\/a><\/h3>\n“<\/strong>Just over twenty one years ago The Economist wrote a glowing article about what was then a roll-up of British High Street banks. It was Lloyds TSB…And then it all went horribly wrong. The bank took only a decade to be nationalised.\u00a0What went wrong was competition. At the time Lloyds revenue to risk weighted assets was 8 percent. This was the highest number I have ever seen on a major bank anywhere.”<\/em><\/p>\nSimon Gergel:\u00a0Oil and Tobacco Aren’t Dead, Just Look at Their Profits<\/a><\/h3>\n\u201cI love the premise of that question [that oil and tobacco are sectors in decline], because oil actually isn\u2019t in decline. The world is using more oil every year and has done since oil started being used and we still aren\u2019t at peak oil. It may be another 10 or 15 years before we get to the peak and then I think you\u2019ll probably see a gentle decline in oil. At the same time demand for gas is growing extremely fast. If you look at companies such as BP and particularly Royal Dutch Shell they produce huge amounts of gas. Gas demand is growing structurally and will do for decades so these aren\u2019t necessarily businesses in decline.\u201d<\/em><\/p>\nRobert Shiller on US Housing: ‘We’re in 2005 Again’<\/a><\/h3>\n“I have seen this happen before. We\u2019re back in 2005 again when the rate of increase in home prices was slowing down a lot but still going up. It would not take me be any surprise at all if in the next year or two we saw modest declines in home prices and if things play out right, there could be bigger declines. It has happened before on a number of occasions.\u201d<\/em><\/p>\nDeloitte: The Decline and Rise of London<\/a><\/h3>\n“The familiar story of London as the powerhouse of the British economy is relatively new. Within living memory London was a city in decline. Its population peaked in the late 1930s before going into a long decline. London\u2019s population shrank by over a fifth between 1941 and 1992, losing two million people at a time of rapid growth in the UK\u2019s wider population. Its economy also underperformed. The economic historian, Professor Nicholas Crafts, estimates that the premium of London GDP per head over the UK average shrunk from a peak of 65% in 1911 to 23% by 1971.”<\/em><\/p>\nOaktree Insights: Structured Credit Primer<\/a><\/h3>\n“Structured credit got a bad rap in association with the excesses in the subprime mortgage market preceding the Global Financial Crisis (GFC). It should be noted, though, that not every structured product played the same role or was affected the same during the last recession. Plus, the asset class has undergone significant reform since then. Today it offers materially improved investor protections while presenting potential for differentiated returns and a favorable relative-value proposition.”<\/em><\/p>\n<\/p>","protected":false},"excerpt":{"rendered":"WELCOME TO THE 42ND EDITION OF VALUE INVESTOR DIGEST In this edition we feature two articles from John Authers; the first is titled “Quality Stocks Are An Overcrowded Trade”,\u00a0there’s also<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"_links":{"self":[{"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/posts\/692"}],"collection":[{"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/comments?post=692"}],"version-history":[{"count":1,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/posts\/692\/revisions"}],"predecessor-version":[{"id":693,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/posts\/692\/revisions\/693"}],"wp:attachment":[{"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/media?parent=692"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/categories?post=692"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/tags?post=692"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
“We need to be careful with definitions. Everyone would like to describe their stock as a quality investment. And even the quants who have broken down equity investing into a series of factors that drive returns are not sure how to define the quality factor. Broadly, it tends to refer to reliable profitability, and a strong balance sheet, in some combination.”<\/em><\/p>\n “Parts companies like Ahresty have followed\u00a0the big Japanese automobile manufacturers\u00a0overseas as they\u2019ve successfully\u00a0established global footprints. There was\u00a0always sort of a bargain struck, that if the\u00a0parts makers came along they would be\u00a0allowed to sell to others, and Ahresty has\u00a0built a good business selling to companies\u00a0such as General Motors and Volkswagen\u00a0as well. It supplies customers from its production\u00a0bases in Japan, China, Thailand,\u00a0India, Mexico and the U.S.”<\/em><\/p>\n “The bubble in passive investing through ETFs and index funds as well as the trend to very\u00a0large size among asset managers has orphaned smaller value-type securities globally…There is all this opportunity, but so few active managers are looking to take advantage.”<\/em><\/p>\n Buffett covered a lot in\u00a0this new interview including comments on China, Costco, Elon Musk and more. Commenting on Berkshire’s investments in banks, he said: “They’re businesses I understand and I like the price at which they’re selling relative to their future prospects. I think 10 years from now that they will be worth more money and I feel there’s a very high probability that I’m right. I don’t think they will turn out to be the best investments at all, of the whole\u00a0panoply of things you could do, but I’m pretty sure that they won’t disappoint me.”<\/em>\u00a0[Comments on banks at 53:40]<\/a><\/p>\n “Sometimes I think of you as the Rodney Dangerfield of investing\u2014investors just don\u2019t give you the respect you deserve. They\u2019ve gone so far as to assign a ‘Dolan discount’ to entities you control\u2014even though long-term shareholders of both Cablevision and Madison Square Garden (MSG) (my firm included) have been handsomely rewarded thanks to your shareholder-friendly actions. But your latest plan to build a concert\/entertainment venue, the Sphere, in Las Vegas for $1.2 to $1.7 billion (and that\u2019s just for the Las Vegas version) makes me wonder whether a ‘Dolan discount\u201d’ is beginning to make sense.”<\/em><\/p>\n “I think the way to look at or to assess a portfolio manager or track record is [to ask] how do they do in different environments? So for example if you look at a ‘growth’ \u00a0manager today, most of them look like geniuses. Most of them won’t have a good track record – if you go back to the 2000-2003 era – how many of them actually did well? So the whole ‘growth and value’ debate I personally feel is nonsensical in a way because why would you consciously overpay for anything?”<\/em> [This discussion is at 31.30]<\/p>\n “When Walmart\u2019s US CEO Greg Foran invokes words like ‘fierce’, ‘good’ and ‘clever’ in speaking almost admiringly about one of his competitors, he\u2019s not referring to Amazon. He isn\u2019t pointing to large chains like Kroger or Albertsons, dollar stores like Dollar General or online entrants like FreshDirect and Instacart.\u00a0Foran is describing Aldi.”<\/em><\/p>\n “Research from Gavekal\u2019s Louis-Vincent Gave…looked at the top-10 stocks at the beginning of each decade since 1980. His findings demonstrated that the top-10 stocks by market cap rarely stay there during the following 10 years. Instead, prevalent investing patterns changed drastically, as the old winners were replaced with the new.”<\/em><\/p>\n “<\/strong>In recent years, as you have sought to change the direction of Sports Direct (SPD) and invest for its future, many of the fair weather shareholders of 2011-15 have left you. They have been replaced by those that see value in your business and the skills you bring to it. To be a SPD shareholder in 2019 is to be someone who is backing Mike Ashley and taking the longer term view. As such most of your investors today are aligned with you. Please treat us accordingly.”<\/em><\/p>\n This interesting visualisation from The Money Project compares the size of various asset classes, companies, people and other items. Each block in the visualisation represents $100bn.<\/p>\n “There has been a tendency since the financial crisis to label any market that is rallying or deemed overvalued to be in a \u201cbubble.\u201d The word has become overused and debased. But if we treat it rigorously, the bubble concept is still vital in navigating financial markets. And the rigorous treatment reveals that bonds really are in a bubble.”<\/em><\/p>\n “<\/strong>Just over twenty one years ago The Economist wrote a glowing article about what was then a roll-up of British High Street banks. It was Lloyds TSB…And then it all went horribly wrong. The bank took only a decade to be nationalised.\u00a0What went wrong was competition. At the time Lloyds revenue to risk weighted assets was 8 percent. This was the highest number I have ever seen on a major bank anywhere.”<\/em><\/p>\n \u201cI love the premise of that question [that oil and tobacco are sectors in decline], because oil actually isn\u2019t in decline. The world is using more oil every year and has done since oil started being used and we still aren\u2019t at peak oil. It may be another 10 or 15 years before we get to the peak and then I think you\u2019ll probably see a gentle decline in oil. At the same time demand for gas is growing extremely fast. If you look at companies such as BP and particularly Royal Dutch Shell they produce huge amounts of gas. Gas demand is growing structurally and will do for decades so these aren\u2019t necessarily businesses in decline.\u201d<\/em><\/p>\n “I have seen this happen before. We\u2019re back in 2005 again when the rate of increase in home prices was slowing down a lot but still going up. It would not take me be any surprise at all if in the next year or two we saw modest declines in home prices and if things play out right, there could be bigger declines. It has happened before on a number of occasions.\u201d<\/em><\/p>\n “The familiar story of London as the powerhouse of the British economy is relatively new. Within living memory London was a city in decline. Its population peaked in the late 1930s before going into a long decline. London\u2019s population shrank by over a fifth between 1941 and 1992, losing two million people at a time of rapid growth in the UK\u2019s wider population. Its economy also underperformed. The economic historian, Professor Nicholas Crafts, estimates that the premium of London GDP per head over the UK average shrunk from a peak of 65% in 1911 to 23% by 1971.”<\/em><\/p>\n “Structured credit got a bad rap in association with the excesses in the subprime mortgage market preceding the Global Financial Crisis (GFC). It should be noted, though, that not every structured product played the same role or was affected the same during the last recession. Plus, the asset class has undergone significant reform since then. Today it offers materially improved investor protections while presenting potential for differentiated returns and a favorable relative-value proposition.”<\/em><\/p>\n<\/p>","protected":false},"excerpt":{"rendered":" WELCOME TO THE 42ND EDITION OF VALUE INVESTOR DIGEST In this edition we feature two articles from John Authers; the first is titled “Quality Stocks Are An Overcrowded Trade”,\u00a0there’s also<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"_links":{"self":[{"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/posts\/692"}],"collection":[{"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/comments?post=692"}],"version-history":[{"count":1,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/posts\/692\/revisions"}],"predecessor-version":[{"id":693,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/posts\/692\/revisions\/693"}],"wp:attachment":[{"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/media?parent=692"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/categories?post=692"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.valueinvest.com\/hongkong\/wp-json\/wp\/v2\/tags?post=692"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}<\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/h3>\n
<\/h3>\n
John Authers: Quality Stocks Are An Overcrowded Trade<\/a><\/h3>\n
Value Investor Insight\u00a0Interview With Mark Pearson of Arcus Investment<\/h3>\n
The Big Short\u2019s Michael Burry Sees a Bubble in Passive Investing<\/a><\/h3>\n
Warren Buffett on Berkshire’s Investments in US Banks<\/a><\/h3>\n
Jonathan Boyar in Forbes: Open Letter to James Dolan Outlining Ways to Unlock Shareholder Value<\/a><\/h3>\n
Rajiv Jain Discusses Portfolio Management<\/a><\/h3>\n
How a Cheap, Brutally Efficient Grocery Chain is Upending America’s Supermarkets<\/a><\/h3>\n
Barron’s: History Says Apple and Amazon Probably Won\u2019t Be the Next Decade\u2019s Best Stocks<\/a><\/h3>\n
HollAnd Advisors: Open Letter to Mike Ashley<\/a><\/h3>\n
All of the World\u2019s Money and Markets in One Visualization<\/a><\/h3>\n
John Authers:\u00a0Bonds Meet the Four Criteria for Defining a Bubble<\/a><\/h3>\n
John Hempton: Thinking Aloud About Bank Margins – Part 2<\/a><\/h3>\n
Simon Gergel:\u00a0Oil and Tobacco Aren’t Dead, Just Look at Their Profits<\/a><\/h3>\n
Robert Shiller on US Housing: ‘We’re in 2005 Again’<\/a><\/h3>\n
Deloitte: The Decline and Rise of London<\/a><\/h3>\n
Oaktree Insights: Structured Credit Primer<\/a><\/h3>\n