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Frederik Gieschen Profile picture
@NeckarValue
Jan 30, 2018 • 8 tweets • 3 min read • Read on X
Scrolly
Graham Doddsville Winter 2018
Cooperman bashing Ackman ($ADT)
Sequoia on $GOOG, $CACC
Vulcan Value on $ORCL
Oasis on activism in Japan/China
Pitches: Staples 2025 bond, $FLT, $FDC

www8.gsb.columbia.edu/valueinvesting…
Cooperman: don't talk about your shorts (we'll let the last sentence slide)
Cooperman: clear ex-ante expectations. Analysts won't take a loss by themselves
Cooperman: leave $ADT alone
Sequoia: don't stick your head into the sand. This is not the 70's and See's Candies better figure out their instagram strategy
Sequoia: before you even think about your information #edge make sure you're not the sucker buying based on a hot tip
Sequoia: the case for growth investing. Pleasant long-term surprises
Vulcan Value: pick quality (stability) over valuation

• • •

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More from @NeckarValue

Frederik Gieschen Profile picture
Oct 6, 2018
Robert Vinall’s 10-year anniversary letter is a fantastic read

Evolution:
Deep value
To great businesses
To great managers

“the surprises with managers I trust are generally positive, whereas those with managers I do not are nearly always negative.”

bit.ly/2y01IcD
“Tech” paradigm shift

“the single most difficult transition I made as an investor over the last ten years.”

Value investor’s circle of competence vs.
“the growing evidence that companies on the receiving end of the disruptive forces ..were increasingly looking like roadkill.”
“'Tech' was the wrong term: creates impression that companies are one part of the economy...whereas they were becoming the fabric of economy as a whole.”

“I was also too focused on the width of the moat and not sufficiently focused on whether moat was growing”
Read 5 tweets
Frederik Gieschen Profile picture
Sep 27, 2018
Richard Jenrette in 1966
When performance measurement became a thing

Clients: you can’t benchmark against S&P 500 because “you can’t invest in the averages”
(you couldn’t until the early 1970’s)

“for a large institution… equalling the market is a very good performance”
Higher relative earnings growth
At reasonable price
Consider current valuation relative to market vs. historical relationship

1960’s: calculate this on a quarterly basis

“The chief advantage of relatively growing earnings at a reasonable relative multiple is its adaptability”
“Directional change and general environment are far more important than detailed forecast of GNP”

“what segments of the economy are most vigorous?”
“you are trying to decide which stream to be fishing in”
Read 4 tweets
Frederik Gieschen Profile picture
Sep 22, 2018
Bill Miller during the dot-com years

1997: looking past traditional value
"retains a scholarly bent"
complex adaptive systems
"changes are context-dependent"

Forward-looking, focus on free cash flow

Low turnover, "positively glacial"
1998: outperformed for 7 years
Concentrated portfolio
Financials & tech stocks
Out of favor stocks, Brady bonds

"central tendency valuation"
1999: "a class of its own" "massacred the S&P"

but "not a value fund in the traditional sense"
owning both DELL and AOL
and Citi and Fannie Mae

Turnover down to 15%
Read 10 tweets
Frederik Gieschen Profile picture
Sep 19, 2018
Extensive overview of academic research on market efficiency, behavioral effects, valuation

"economics of alpha extraction, the costs and incentives of informational arbitrage as a sustainable business proposition"

h/t @mjmauboussin

pdfs.semanticscholar.org/435a/8ad41300e…
"prices do not adjust to fundamental value instantly by fiat"
"continuous flow of information and rumors disguised as information"

"because information is costly, prices cannot perfectly reflect the information which is available"
Ocean analogy

"training surfers, does it make sense to being by assuming that waves do not exist?"

"constant state of restlessness, continuous state of adjustment"

"market efficiency is a journey, not a destination"
Read 11 tweets
Frederik Gieschen Profile picture
Aug 12, 2018
from one of my favorites, the Money Game

"This is a book about image and reality and identity and anxiety and money. If that doesn't scare you off, nothing will"
"we are taught that money is A Very Serious Business

Keynes
"the game of professional investment is intolerably boring to anyone who is entirely exempt from the gambling instinct"

"Does that sound like Owning a Share of American Industry? No, but it sounds like the stock market
"a fascinating, totally absorbing experience"
"if it is not, you are not likely to be among the most successful"

"this is a money game... but the real object of the Game is not money, it is the playing of the Game itself"
"as long as there is a way to keep score, they will play"
Read 12 tweets
Frederik Gieschen Profile picture
Aug 10, 2018
Everyone hits a rough patch now and then

Druckenmiller on the cover of Institutional Investor in early 1998 with a deflated balloon: "Quantum limp"

A defiant Soros:
"we are not ready for extinction yet"

drive.google.com/open?id=1Tgk9z…
1996: first annual loss since 1981
"an ongoing misanalysis of Japan"

Risk management & opportunity cost
"hurt us by lowering risk where we should have had it,
and by never letting the fund be aggressive in those areas where I had a view"
1997 Asian crisis:
"This was probably the greatest opportunity to make money this decade for a fund like ours"
"I just blew it"
"It was the biggest mistake of my career"

Size hurt:
"We're not going to do over 30% at this size. I've been saying this since 1991"
Read 9 tweets

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