This Week’s Best Investing Reads 2/1/2019

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Here’s a list of this week’s best investing reads:

Yuval Noah Harari: Why We Dominate the Earth (Farnam Street)

Who Owns All the Stocks & Bonds? (A Wealth of Common Sense)

Origins of Greed and Fear (Collaborative Fund)

The Single Greatest Error (The Irrelevant Investor)

Value investing is long on virtue but has been short on reward (The Economist)

Populism + Weakening Economy + Limited Central Bank Power to Ease + Elections = Risky Markets and Risky Economies (Ray Dalio)

This is why we suck at this (The Reformed Broker)

When Charlie Munger Calls, Listen and Learn (Jason Zweig)

Baseball and Stocks: Games of Failure (Global Investment Strategy)

The Futility of Market Timing (Albert Bridge Capital)

Howard Marks Latest Memo: Political Reality Meets Economic Reality (Howard Marks)

Tweedy Browne Q42018 Shareholder Letter (Tweedy Browne)

Ben Graham: Just Plain Lucky? (Safal Niveshak)

Sunken Treasures (Jamie Catherwood)

‘We Shall Not Pass This Way Again’ (The Felder Report)

Zurich to Nice (Vitaliy Katsenelson)

An Evolve-or-Die Moment for the World’s Great Investors (Fortune)

One Big Thing (Of Dollars & Data)

January 2019 Data Update 6: Profitability and Value Creation! (Aswath Damodaran)

Spending Happily (Humble Dollar)

The Insane Story of How an Early Quant Investor Went Rogue (Angelo Calvello)

Rush Hour and Short Cuts: How to Navigate Market Corrections (CFA Institute)

Investing in turnarounds, recovery stocks and corporate transformations (UK Value Investor)

Bridgewater and Renaissance Earn $13 billion for Investors (Validea)

Tightening the Uncertain Payout of Trend-Following (Flirting with Models)

Stock-Picking Contests Are No Way to Pick Stocks (Bloomberg)

3 Red Flags Telling You It’s a Bad Dividend Stock (The Dividend Guy Blog)

Latest 401(k) Balance By Age Versus Recommended Amount For A Comfortable Retirement (Financial Samurai)

The Best Investment – Travel (Pragmatic Capitalism)

Liquid or Illiquid: Are you getting paid enough for less liquidity? (Mark Rzepczynski)

Everything You Wanted To Know About MMT (But Were Afraid To Ask) (The Macro Tourist)


This week’s best investing research:

Buffett’s Alpha (papers.ssrn)

“The Failure of Factor Investing was Predictable” (Alpha Architect)

Central bank gold-buying reaches half-century high (The Financial Times)

U.S. Stocks At 70 Year High Versus Global Stocks (UPFINA)

Frank Holmes: Gold is Going to Have an Incredible Run (Palisade Research)

Fintech – Beyond the Buzzwords (Investment Innovation)

Have Investors Shifted Market Sentiment Too Quickly? (Advisor Perspectives)


This week’s best investing podcasts:

Episode #140: Ralph Acampora, “Don’t Ever Fight Papa Dow” (Meb Faber)

TIP227: Jesse Felder – Market Outlook 2019 (Stig Brodersen & Preston Pysh)

Alex Mittal – Early Stage Investing (Patrick O’Shaughnessy)

Animal Spirits Episode 66: Adverse Variance (Ben Carlson & Michael Batnick)

Donna Snider – Inside the Investment Process at the Kresge Foundation (Ted Seides)

Prem Watsa: Top 10 Holdings

Johnny HopkinsPortfolio Management, Prem WatsaLeave a Comment

One of the best resources for investors are the publicly available 13F-HR documents that each fund is required to submit to the SEC. These documents allow investors to track their favorite superinvestors, their fund’s current holdings, plus their new buys and sold out positions. We spend a lot of time here at The Acquirer’s Multiple digging through these 13F-HR documents to find out which superinvestors hold positions in the stocks listed in our Stock Screeners.

As a new weekly feature, we’re now providing the top 10 holdings from some of our favorite superinvestors based on their latest 13F-HR documents.

This week we’ll take a look at Prem Watsa (9-30-2018):

The current market value of his portfolio is $2,369,018,000.

Top 10 Positions

Stock Shares Held Market Value
SSW / Seaspan Corp 102,601,099 $932,643,990
BB / Blackberry Limited 46,724,700 $531,103,000
RFP / Resolute Forest Products Inc. 30,548,190 $395,599,000
KW / Kennedy-Wilson Holdings, Inc. 13,322,009 $286,423,000
CTL / CenturyLink, Inc. 1,959,100 $41,533,000
HP / Helmerich & Payne, Inc. 344,000 $23,650,000
JNJ / Johnson & Johnson 146,800 $20,280,000
GM / General Motors Company 375,965 $12,659,000
PKX / POSCO 189,000 $12,472,000
GE / General Electric Co. 1,072,700 $12,111,000

Seth Klarman: How To Increase The Likelihood Of Achieving Sustainable Gains With Limited Downside Risk Over The Long-Run

Johnny HopkinsInvesting Strategy, Seth KlarmanLeave a Comment

In his latest Baupost Sharholder Letter, Seth Klarman provides some great advice for investors on how to increase the likelihood of achieving sustainable gains with limited downside risk over the long-run saying:

“We believe another key element in portfolio management is curtailing the duration (the weighted average life) of one’s portfolio through exposure to investments with catalysts for the realization of underlying value.”

“Catalytic events shift the outcome of investments from a reliance on future market multiples and macroeconomic developments (which are not at all under your control) to a dependence on your assessment of the outcomes, probabilities, and implications of announced or anticipated corporate events, including mergers and acquisitions, bond maturities, debt restructurings, bankruptcies, major corporate asset sales, spinoffs, and tender offers.”

“No strategy can avoid all risk of loss. But we believe our approach should increase the likelihood of achieving sustainable gains with limited downside risk over the long- run.”

“To put it differently, a portfolio of near infinite duration (such as an all equity portfolio without catalysts) can trade just about anywhere. With such exposures, if stock prices plummet, the odds go up that an investor will feel pressure to do the wrong thing and sell into market weakness.”

“A limited duration portfolio, both because of the hopefully truncated downside in a bad market as well as the beneficial cash inflows (buying power) that catalysts usually generate, is hugely advantageous in navigating through turmoil.”

You can read more notes from Baupost’s latest shareholder letter here – Baupost 2018 Year End Shareholder Letter.

Howard Marks: How Can Investors Become Effective Contrarians

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We’ve just been re-reading Howard Mark’s 2009 Memo – Touchstones. In the memo Marks provides some great insights into how investors can become more effective contrarians saying:

Resisting – and thereby achieving success as a contrarian – isn’t easy. Things combine to make it difficult, including natural herd tendencies and the pain imposed by being out of step, since momentum invariably makes pro-cyclical actions look correct for a while. (That’s why it’s essential to remember that “being too far ahead of your time is indistinguishable from being wrong.”) Given the uncertain nature of the future, and thus the difficulty of being confident your position is the right one – especially as price moves against you – it’s challenging to be a lonely contrarian.

A few things that can help, however. First, after even a little time spent in the investment business, everyone should know that the herd is usually wrong at the extremes and pays dearly for its error. Second, some contrarians have records that are very impressive. And third, an accurate reading of investor mood and behavior – perceptive inference of danger or opportunity based on what others are doing in the market – can give investors a good leg up toward being effective contrarians.

I say we never know where we’re going, but we sure as heck ought to know where we are. The cycle isn’t unknowable or unbeatable. Touchstones like those enumerated above are there for everyone to see, but few people take full advantage. The key is to be among those who do.

You can read Howard Mark’s complete 2009 memo here – Howard Marks, 2009 Memo, Touchstones.

Charles Munger: If Mozart Can’t Get By With This Kind Of Asinine Conduct I Don’t Think You Should Try

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Here’s some more classic Munger. During his USC Law Commencement Speech, Munger provides some insights into counteracting the self serving bias, which includes overspending ones income, saying:

(6:38) “Another thing of course that does one in is the self-serving bias to which we’re all subject.”

“You think that your ‘little me’ is entitled to do what it wants to do and for instance why shouldn’t the true ‘little me’ overspend my income. Well there once was a man who became the most famous composer in the world but he was utterly miserable most of the time.”

“One of the reasons was he always overspent his income – that was Mozart.”

“If Mozart can’t get by with this kind of asinine conduct I don’t think you should try.”


(Source:YouTube)

This Week’s Best Investing Reads 1/25/2019

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Here’s a list of this week’s best investing reads:

The Biggest Returns (Collaborative Fund)

Samuel Andrews: The Man With the Billion Dollar Ego (Farnam Street)

Pulling In Their Horns (The Reformed Broker)

Diversification is (Almost) Undefeated (A Wealth of Common Sense)

The Investor Seth Klarman, in a Rare Interview, Offers a Warning. Davos Should Listen (The New Yorker)

Is the U.S. Stock Market Bubble Bursting? (GMO)

Why Blaming ‘Algos’ For The Decline Is Really Just An ‘Inverted Stock Tip’ (The Felder Report)

Robert Shiller – ‘Bear Market’ Is an Arbitrary Label, but Using It Can Hurt (The New York Times)

Great Collection of Q4 2018 Shareholder Letters (Dropbox)

In or Out (The Irrelevant Investor)

On Jack Bogle (1929-2019) (Jason Zweig)

The Untold Story of A Self-Made Investing Millionaire (Safal Niveshak)

January 2019 Data Update 5: Hurdle Rates and Costs of Financing (Aswath Damodaran)

CNBC’s Full Interview Eith JP Morgan Chase CEO Jamie Dimon – Davos 2019 (YouTube)

The Road to ETFs (Jamie Catherwood)

Has Value Investing Gone Out of Style? (Wisdom Tree)

Bridgewater’s Pure Alpha ends 2018 with 14.6 pct gain (Reuters)

[Presentation] What Does An Intelligent Fanatic Look Like? (MicroCap Club)

Repeat for Emphasis (Humble Dollar)

This Stable Value Stock Is Built To Weather Market Storms (Vitaliy Katsenelson)

Survival is the Ultimate Performance Measure of a Business (Intelligent Fanatics)

Drawdowns and Portfolio Longevity (Flirting with Models)

Best Way To Short China? (Macro Tourist)

Stock-Pickers Don’t Know How to Sell (Bloomberg)

How to Invest for the Long-Term in a Turbulent Market (Behavioral Value Investor)

Stupidity – Not acting on what is right in front of you (Mark Rzepczynski)

Tesla Model 3 is Brilliant, but very Californian: Grantham (Investment Innovation)

Einhorn’s Greenlight Extends Decline to 34% in Worst Year (Bloomberg)

Owning Quant Funds is Not Easy (Behavioural Investment)


This week’s best investing research reads:

Rankings and Risk-Taking in the Finance Industry (Alpha Architect)

David Skarica: Explosion in Gold Price on the Horizon (Palisade Research)

Some Thoughts on Multi-Factor Investing (Validea)

The Right to Remain Silent: A New Answer to an Old Question (SSRN Papers)

Next Move For The Dollar (UPFINA)

Big Data and Artificial Intelligence in Investment Management: FAQs and Answers (CFA Institute)

Fundamentally Speaking: 2019 Estimates Are Still Too High (Advisor Perspectives)


This week’s best investing podcasts:

Animal Spirits Episode 65: Stay the Course (Ben Carlson & Michael Batnick)

Ron Biscardi – Putting Hedge Funds in Context (EP.83) (Ted Seides)

Eugene Wei – Tech, Media, and Culture (Patrick O’Shaughnessy)

TIP226: Lessons Learned from Billionaire Charles Koch (Preston Pysh & Stig Brodersen)

Episode #139: Taz Turner and Nate Nienhuis, “We’re Really Driving At What We Feel Is The Holy Grail of Cannabis” (Meb Faber)

Josh Wolfe – Inventing the Future (Shane Parrish)

TAM Stock Screener – Stocks Appearing in Greenblatt, Cohen, Griffin Portfolios

Johnny HopkinsStock ScreenerLeave a Comment

Part of the weekly research here at The Acquirer’s Multiple features some of the top picks from our Stock Screeners and some top investors who are holding these same picks in their portfolios. Investors such as Warren Buffett, Joel Greenblatt, Carl Icahn, Jim Simons, Prem Watsa, Jeremy Grantham, Seth Klarman, Ray Dalio, and Howard Marks. The top investor data is provided from their latest 13F’s (dated 2018-9-30). This week we’ll take a look at:

Thor Industries, Inc. (NYSE: THO)

Thor Industries Inc is an American manufacturer of recreational vehicles through its subsidiaries. The company mainly sells vehicles in the United States and Canada. The company has two reporting segments: towable recreational vehicles and motorized recreational vehicles. The towable recreational vehicle reportable segment consists of the following operating segments: Airstream (towable), Bison, Heartland, CrossRoads, KZ, Keystone, and Livin’ Lite. The motorized recreational vehicle reportable segment consists of the following operating segments: Airstream (motorized) and Thor Motor Coach. The marketing and distribution is done through independent dealers that are generally not financed by the company.

A quick look at the price chart below for Thor shows us that the stock is down 58% in the past twelve months. We currently have the stock trading on an Acquirer’s Multiple of 6.11 which means that it remains undervalued.

(Source: Google Finance)

Superinvestors who currently hold positions in Thor include:

Chuck Royce: 514,005 total shares

Steve Cohen: 139,396 total shares

Ken Griffin: 112,133 total shares

Joel Greenblatt: 65,621 total shares

Paul Tudor Jones: 31,521 total shares

Jim Simons: Top 10 Holdings

Johnny HopkinsJim Simons, Portfolio ManagementLeave a Comment

One of the best resources for investors are the publicly available 13F-HR documents that each fund is required to submit to the SEC. These documents allow investors to track their favorite superinvestors, their fund’s current holdings, plus their new buys and sold out positions. We spend a lot of time here at The Acquirer’s Multiple digging through these 13F-HR documents to find out which superinvestors hold positions in the stocks listed in our Stock Screeners.

As a new weekly feature, we’re now providing the top 10 holdings, new additions to the portfolio, and sold out positions from some of our favorite superinvestors based on their latest 13F-HR documents.

This week we’ll take a look at Jim Simons (9-30-2018):

The current market value of his portfolio is $97,270,691,000.

Top 10 Positions

Security Current
Shares
Current Value
($)
VRSN / VeriSign, Inc. 7,037,800 1,126,893,000
ALGN / Align Technology, Inc. 2,778,381 1,086,958,000
HUM / Humana, Inc. 3,174,800 1,074,733,000
PANW / Palo Alto Networks, Inc. 4,651,200 1,047,729,000
DPZ / Dominos Pizza Inc. 3,183,800 938,584,000
NVO / Novo-Nordisk A/S 19,666,671 927,087,000
AMGN / Amgen Inc. 4,115,145 853,028,000
VMW / VMWare, Inc. 5,136,168 801,550,000
VRTX / Vertex Pharmaceuticals Inc. 4,089,117 788,136,000
ABMD / ABIOMED, Inc. 1,719,023 773,131,000

Warren Buffett: There Is Only Three Ways A Smart Person Can Go Broke

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Over the years Warren Buffett has spoken about the absurdity of borrowing money to buy stocks. Here’s a great short video that encapsulates his thoughts. Our favorite quote from the clip is:

(1:47) – “My partner Charlie says there is only three ways a smart person can go broke: liquor, ladies, and leverage. Now the truth is, the first two he just added because they started with ‘L’ – It’s leverage.”

(Source:CNBC)

Peter Lynch: 13 Filters For Finding The Perfect Stock

Johnny HopkinsInvesting Strategy, Peter Lynch1 Comment

One of our favorite investing books is – One Up On Wall Street by Peter Lynch – It’s an investment classic! In Chapter Eight, Lynch provides thirteen filters for finding the perfect stock saying:

Getting the story on a company is a lot easier if you understand the basic business.

That’s why I’d rather invest in panty hose than in communications satellites, or in motel chains than in fiber optics. The simpler it is, the better I like it. When somebody says, “Any idiot could run this joint,” that’s a plus as far as I’m concerned, because sooner or later any idiot probably is going to be running it.

If it’s a choice between owning stock in a fine company with excellent management in a highly competitive and complex industry, or a humdrum company with mediocre management in a simpleminded industry with no competition, I’d take the latter. For one thing, it’s easier to follow. During a lifetime of eating donuts or buying tires, I’ve developed a feel for the product line that I’ll never have with laser beams or microprocessors.

“Any idiot can run this business” is one characteristic of the perfect company, the kind of stock I dream about. You never find the perfect company, but if you can imagine it, then you’ll know how to recognize favorable attributes, the most important thirteen of which are as follows:

1. It sounds dull – or, even better, ridiculous
2. It does something dull
3. It does something disagreeable
4. It’s a spin-off
5. The institutions don’t own it, and the analysts don’t follow it
6. The rumours abound: It’s involved with toxic waste and/or the mafia
7. There’s something depressing about it
8. It’s a no-growth industry
9. It’s got a niche
10. People have to keep buying it
11. It’s a user of technology
12. The insiders are buying
13. The company is buying back shares

Charles Munger: One Filter That’s Very Useful For Investors

Johnny HopkinsCharles Munger, Investing StrategyLeave a Comment

During the 1997 Berkshire Hathaway Shareholder Meeting, Warren Buffett and Charlie Munger were asked their thoughts on calculating intrinsic value. Here’s Munger’s response:

I would argue that one filter that’s useful in investing is the simple idea of opportunity cost.

If you have one opportunity that you already have available in large quantity and you like it better than 98% of the other things you see, you can just screen out the other 98% because you already know something better.

So that people who have a lot of opportunities tend to make better investments than people that don’t have a lot of opportunities, and people who have very good opportunities, and using a concept of opportunity costs, they can make better decisions about what to buy.

With this attitude you get a concentrated portfolio which we don’t mind.

That practice of ours, which is so simple, is not widely copied. I do not know why. Now it’s copied among the Berkshire shareholders. I mean all you people have learned it but it’s not the standard in investment management, even at great universities and other intellectual institutions.

If we’re right why are so many eminent places so wrong?

You can watch more of the presentation here:


(Source:YouTube)

Warren Buffett: Jack Bogle – Thank You On Behalf Of American Investors

Johnny HopkinsJohn Bogle, Warren BuffettLeave a Comment

With the sad death of John (Jack) Bogle last week we thought it would be a great time to remember Warren Buffett’s public adulation of Bogle at the 2017 Berkshire Hathaway Shareholder Meeting in which Buffett said:

There’s one more person I would like to introduce to you today and that is Jack Bogle who I talked about in the annual report. Jack Bogle has probably done more for the American investor than any man in the country.

Jack Bogle many years ago, he wasn’t the only one that was talking about an index fund, but it wouldn’t have happened without him. I mean Paul Samuelson talked about it. Ben Graham even talked about it.

But the truth is it was not in the interest of the investment industry, of Wall Street. It was not in their interest actually to have the development of an index fund because it brought down fees dramatically.

And as we’ve talked about, some in the reports, and other people have commented, that index funds overall have delivered for shareholders a result that has been better than Wall Street profession as a whole, and part of the reason for that is that they’ve brought down the costs very significantly.

So when Jack started, very few people, certainly Wall Street did not applaud him. He was the subject of some derision and a lot of attacks. Now we’re talking trillions when we get into index funds and we’re talking a few basis points when we talk about investment fees in the case of index funds, but still hundreds of basis points when we talk about fees elsewhere.

I estimate that Jack at a minimum has saved, left in the pockets of investors, without hurting them overall in terms of performance at all, most performance. He’s put tens and tens and tens of billions into their pockets and those numbers are gonna be hundreds and hundreds of billions over time.

So it’s Jack’s 88th birthday on Monday… So I just say Happy Birthday Jack and thank you on behalf of American investors… And Jack I’ve got great news for you, you’re gonna be 88 on Monday and in only two years you’ll be eligible for an executive position at Berkshire, hang in there buddy…


(Source:YouTube)

This Week’s Best Investing Reads 1/18/2019

Johnny HopkinsValue Investing News1 Comment

Here’s a list of this week’s best investing reads:

How to Do Great Things (Farnam Street)

What I Learned From Jack Bogle (A Wealth of Common Sense)

Stock Markets and the Rule of Law (The Reformed Broker)

Caveat Investor? (Cliff Asness)

Buy Low, Buy High (The Irrelevant Investor)

Billionaire Sam Zell Buys Gold for First Time in Bet on Tight Supply (Bloomberg)

Notes From Sohn London Investment Conference (Market Folly)

Back to Class: A Teaching Manifesto! (Aswath Damodaran)

FY-2018: What The Market Gods Giveth, They Also Taketh Away… (Wexboy)

The Worst Possible Environment For Stock Market Investors (The Felder Report)

When It’s Time To Do Something (Collaborative Fund)

What Amazon’s Rise to No. 1 Says About the Stock Market (Jason Zweig)

Beware the Gatekeeper (Of Dollars & Data)

Paul Lountzis on Qualitative Investing and Lessons Learned (MicroCap Club)

Saint Jack (Humble Dollar)

Ray Dalio Sees Investors Ill-Prepared to Weather Next Bear Market (Chief Investment Officer)

Stress and Investing: A 20-Point Checklist (Safal Niveshak)

The Intangible Valuation Renaissance: Five Methods (CFA Institute)

Success is only obvious in hindsight (Oddball Stocks)

Beats & Misses, Seen & Unseen (Vitaliy Katsenelson)

Hedge Fund Baupost Has a Complex $1 Billion Bet on PG&E (Bloomberg)

O’Shaughnessy Quarterly Investor Letter Q4 2018 (OSAM)

i3 Insights: In Search of Temperament II – Contrarianism (Market Fox)

The Quarterly Guidance Trap Bites Apple (The Rational Walk)

What will be the cause of the next recession? (Mark Rzepczynsk)

How To Choose An Investment Manager (Behavioral Value Investor)

An Ode to Crowding (Investment Innovation)

The Myth of Capitalism: Monopolies and the Death of Competition. Jonathan Tepper and Denise Hearn. A review… (Bronte Capital)


This week’s best investing research reads:

Equity investing is Riskier than You Probably Expected (Alpha Architect)

Is Multi-Manager Diversification Worth It? (Flirting with Models)

Stocks Rally, But Fundamentals Get Worse (UPFINA)

High-Yield Credit Spread Blowout (The Macro Tourist)

Flat Yield Curve Inverted in December (Validea)

Anthony Milewski: 2018 Was The Tipping Point For Electric Vehicles (Palisade Research)

Multiple Narratives (Advisor Perspectives)


This week’s best investing podcasts:

Animal Spirits Episode 64: The Richest 50% (Ben Carlson & Michael Batnick)

Michael Duda – Investing In Brands (Patrick O’Shaughnessy)

Winning at the Great Game (Part 2) (Shane Parrish)

TIP225: Billionaire Peter Thiel Lessons Learned (Preston Pysh & Stig Brodersen)

Scott Malpass – The Fighting Irish’s Twelfth Man (Ted Seides)

Episode #138: Yariv Haim, “You Should Never Try To Reassess Your Risk Appetite When Markets Crash” (Meb Faber)

TAM Stock Screener – Stocks Appearing in Marks, Greenblatt, Grantham Portfolios

Johnny HopkinsStock ScreenerLeave a Comment

Part of the weekly research here at The Acquirer’s Multiple features some of the top picks from our Stock Screeners and some top investors who are holding these same picks in their portfolios. Investors such as Warren Buffett, Joel Greenblatt, Carl Icahn, Jim Simons, Prem Watsa, Jeremy Grantham, Seth Klarman, Ray Dalio, and Howard Marks.

The top investor data is provided from their latest 13F’s (dated 2018-9-30). This week we’ll take a look at:

Cemex SAB de CV ADR (NYSE: CX)

Cemex is the largest ready-mix concrete company and one of the largest aggregates companies in the world. In 2017, the company sold roughly 68.5 million tons of cement, 52 million cubic meters of ready-mix, and 147 million tons of aggregates. As of Dec. 31, 2016, the company had annual cement production capacity of 92.9 million tons. The company generates roughly 26% of sales in Europe, 23% in Mexico, 26% in the United States, 14% in South America and the Caribbean, and 10% in Asia, Middle East, and Africa.

A quick look at the price chart below for Cemex shows us that the stock is down 36% in the past twelve months. We currently have the stock trading on an Acquirer’s Multiple of 5.58 which means that it remains undervalued.

(Source: Google Finance)

Superinvestors who currently hold positions in Cemex include:

Charles Brandes – 52,792,531 total shares

Ken Fisher – 7,594,476 total shares

Howard Marks – 4,808,700 total shares

Jeremy Grantham – 2,825,300 total shares

Cliff Asness – 274,907 total shares

Ken Griffin – 147,311 total shares

Joel Greenblatt – 36,930 total shares

Carl Icahn – Top 10 Holdings

Johnny HopkinsStock ScreenerLeave a Comment

One of the best resources for investors are the publicly available 13F-HR documents that each fund is required to submit to the SEC. These documents allow investors to track their favorite superinvestors, their fund’s current holdings, plus their new buys and sold out positions. We spend a lot of time here at The Acquirer’s Multiple digging through these 13F-HR documents to find out which superinvestors hold positions in the stocks listed in our Stock Screeners.

As a new weekly feature, we’re now providing the top 10 holdings, new additions to the portfolio, and sold out positions from some of our favorite superinvestors based on their latest 13F-HR documents.

This week we’ll take a look at Carl Icahn (9-30-2018):

The current market value of his portfolio is $25.217 Billion.

Top 10 Holdings

Security Current
Shares
Current Value
($1000)
IEP / Icahn Enterprises L.P. 175,441,588 10,452,809,813
CVI / CVR Energy, Inc. 71,198,718 2,863,612,000
HLF / Herbalife Ltd. 35,227,904 1,921,683,000
LNG / Cheniere Energy, Inc. 23,380,490 1,624,710,000
NWL / Newell Brands Inc. 41,832,250 853,377,900
FCX / Freeport-McMoRan Inc. 50,161,354 698,246,000
NAV / Navistar International Corp. 16,729,960 644,104,000
XRX / Xerox Corp. 23,456,087 632,845,000
HTZ / Hertz Global Holdings, Inc. 29,263,869 477,879,000
CNDT / Conduent 24,586,540 325,771,655

Stanley Druckenmiller – Bulls Make Money, Bears Make Money, And Pigs Get Slaughtered – I’m Here To Tell You I Was A Pig

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We’ve just been re-reading one of our favorite speeches from legendary investor Stanley Druckenmiller at the Lost Tree Club some years ago. During the speech ‘The Druck’ provides some great insights into the mindset necessary to become a successful investor, saying:

The third thing I’d say is I developed partly through dumb luck – I’ll get into that – a very unique risk management system. The first thing I heard when I got in the business, not from my mentor, was bulls make money, bears make money, and pigs get slaughtered. I’m here to tell you I was a pig. And I strongly believe the only way to make long-term returns in our business that are superior is by being a pig. I think diversification and all the stuff they’re teaching at business school today is probably the most misguided concept everywhere.

And if you look at all the great investors that are as different as Warren Buffett, Carl Icahn, Ken Langone, they tend to be very, very concentrated bets. They see something, they bet it, and they bet the ranch on it. And that’s kind of the way my philosophy evolved, which was if you see – only maybe one or two times a year do you see something that really, really excites you.

And if you look at what excites you and then you look down the road, your record on those particular transactions is far superior to everything else, but the mistake I’d say 98 percent of money managers and individuals make is they feel like they got to be playing in a bunch of stuff. And if you really see it, put all your eggs in one basket and then watch the basket very carefully.

You can read the entire speech here – Stanley Druckenmiller – Lost Tree Club – 1—18—15

Michael Burry: How Can Investors Get Even After Suffering A Loss

Johnny HopkinsInvesting Strategy, MIchael BurryLeave a Comment

We’ve just been re-reading Michael Burry’s MSN Case Studies in which Burry provides some great insights into what investors should do after suffering a loss saying:

How to get even

An outsider might find investors’ thinking odd. Presented with new money to invest, most set goals of growing that money. They set targets of 20%, 30% or sometimes much more. And they set off fully intending to do so. Not so odd, yet.

However, once having lost money, investors tend to set a seemingly conservative new goal: breakeven. The irony is that breakeven math is one of life’s crueler realities. That is, breakeven requires a percentage gain in excess of the percentage loss incurred. Not so conservative.

Moreover, losses are the ultimate slippery slope. If one has lost 20%, then one requires a 25% gain to break even. If one has lost 50%, one requires a 100% gain to break even.

As a result, the goal of breakeven is often much more aggressive than one’s initial investment assumption. In an attempt to get back to breakeven, most investors simply ratchet up the risks they take. Of course this usually just ratchets up the losses – and increases the required return back to even. Talk about a death spiral.

My experience is that when one has losses that look other than temporary, there is usually a reason. The appropriate corrective action is to investigate the reason for the loss. More often than not, I find that I have strayed from the consistent method of investment that has served me so well for so long. Indeed, this finding often needs no investigation – I knew at the onset of the investment operation that I was straying, yet foolishly plowed ahead anyway.

All investors stumble. Usually some stubborn insistence plays a role. But fools will not be suffered lightly in a bear market. The risk of ruin is real. As investors, we must continually guard against the missteps that might lead to losses – and react rationally if we find ourselves down.

Acting like a fool after the fact will only compound the error.

You can find Michael Burry’s MSN Case Studies here – Michael Burry’s MSN Case Studies.

This Week’s Best Investing Reads 1/11/2019

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Here’s a list of this week’s best investing reads:

How Not to Be Stupid (Farnam Street)

10 Things Investors Can Expect in 2019 (A Wealth of Common Sense)

The Art of the Deal, 2019 (The Reformed Broker)

Wild Expectations (Collaborative Fund)

Seven Big Ideas from Fooled by Randomness (Safal Niveshak)

A History of Bear Market Bottoms (The Irrelevant Investor)

‘You Have To Know The Past To Understand The Present’ (The Felder Report)

Investing is hard. Big Mistakes and Moats (csinvesting)

Bridgewater’s New Brain is a Millennial Woman (Validea)

Resetting Defaults (Vitaliy Katsenelson)

January 2019 Data Update 1: A reminder that equities are risky, in case you forgot! (Aswath Damodaran)

You Would Have Missed 961% In Gains Using The CAPE Ratio, And That’s A Good Thing (Meb Faber)

The Best Lessons of 2018 – Patience & Discipline (Pragmatic Capitalsm)

Investment guides come and go, but the best advice stays the same (MoneyWeek)

Robert J. Shiller on Bubbles, Reflexivity, and Narrative Economics (CFA Institute)

Beyond Cheap (Humble Dollar)

When Your Neighbors Move In to Your Investment Portfolio (Jason Zweig)

When Markets Are Tough, Don’t Look (Morningstar)

The Price of Greed (Of Dollars & Data)

Don’t Be Your Worst Enemy: Self-Inflicted Wounds Are Terribly Unnecessary (Financial Samurai)

If only a company did… then things would be better (Oddball Stocks)

Dart-Throwing Monkeys and Process Diversification (Flirting with Models)

Fear Not (Above The Market)

Modern Monopolies (Barel Karsan)

Can More Information Lead to Worse Investment Decisions? (Behavioural Investment)


This week’s best investing research:

Discipline: A Necessary Condition for Successful Investing (Alpha Architect)

“Death-Cross Getting Close in 10-Year Note Yield” (Price Action Lab)

The Most Crowded Trade + Consumer Expectations Signal Recession (UPFINA)

Precious Metals Video Update: Gold & Gold Stocks Moving Towards Bull Market (Palisade Research)

Analyst Forecasts: Lessons in Futility (CFA Institute)

What are shadow interest rates telling us? (DSGMV)

2019 Outlook – Party On or Party Over? (Advisor Perspectives)


This week’s best investing podcasts:

Animal Spirits Episode 63: Record Outflows (Ben Carlson & Michael Batnick)

i3 Podcast Ep 18: Tadas Viskanta (Daniel Grioli)

Episode #137: Emily and Morgan Paxhia, “The Growers Who Focused On Creating Efficient Operations Are The Ones That Are Still Around Today” (Meb Faber)

Abby Johnson – Future of Finance – [Invest Like the Best, EP.116] (Patrick O’Shaughnessy)

Goal Mining – Brent Gilchrist (Shane Parrish)

TIP224: Billionaire Ray Dalio’s Book – Big Debt Crises (Stig Brodersen & Preston Pysh)

Diego Parrilla On The Perpetual Search For Extreme Optionality (Jesse Felder)

Jennifer Prosek – Branding an Asset Management Firm (EP.81) (Ted Seides)

TAM Stock Screener – Stocks Appearing in Tepper, Griffin, Grantham Portfolios

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Part of the weekly research here at The Acquirer’s Multiple features some of the top picks from our Stock Screeners and some top investors who are holding these same picks in their portfolios. Investors such as Warren Buffett, Joel Greenblatt, Carl Icahn, Jim Simons, Prem Watsa, Jeremy Grantham, Seth Klarman, Ray Dalio, and Howard Marks.

The top investor data is provided from their latest 13F’s (dated 2018-9-30). This week we’ll take a look at:

Huntsman Corporation (NYSE: HUN)

Huntsman Corp is a US-based manufacturer of differentiated organic chemical products. Its product portfolio comprises of the methylene diphenyl diisocyanate (MDI), amines, surfactants, maleic anhydride, epoxy-based polymer formulations, textile chemicals, dyes and others. The company’s products are used in the adhesives, aerospace, automotive, construction products, among others. Its operating segments are Polyurethanes, Performance Products, Advanced Materials and Textile Effects. It derives a majority of the revenue from the Polyurethanes segment which includes product used to produce rigid and flexible foams, as well as coatings, adhesives, sealants, and elastomers.

A quick look at the price chart below for Huntsman Corp shows us that the stock is down 40% in the past twelve months. We currently have the stock trading on an Acquirer’s Multiple of 6.97 which means that it remains undervalued.

(Source: Google Finance)

Superinvestors who currently hold positions in Huntsman Corp include:

Cliff Asness: 3,771,721 total shares

Alexander Roepers: 2,805,697 total shares

David Tepper: 2,030,039 total shares

Jean-Marie Eveillard: 1,541,939 total shares

D E Shaw: 761,423 total shares

Jim Simons: 672,100 total shares

Ken Griffin: 405,486 total shares

Jeremy Grantham: 297,692 total shares

Mario Gabelli: 138,000 total shares

Paul Tudor Jones: 112,689 total shares