Kip Johann-Berkel
@BerkelKip
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Small cap investor. Enjoy flipping rocks.
San Mateo, CA
Joined February 2021
@puppyeh1 Do the companies typically cancel the bought back share or just leave them in treasury?
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This was also my main takeaway from “Buffett’s Early Investments” - significantly better to have the ability to close the discount on a cheap stock vs. just cheap. If you can’t be an activist, find some investments by activists that like cheap stocks and can push for change…
I am obviously partial to this theme but I think it’s v important to distinguish between stupid cheap stocks and stupid cheap stocks with an actionable mechanism to close the discount. If liquidity is near zero for anyone who would be motivated to close the discount - ie activists, even small ones - then buying cheapness prob works but only on an insanely long timeline. Also you can’t stop the takeout outcome where you get your arbitrary 30% premium at the worst possible time. Ie liquidity, and shape of register, is far far more important than absolute cheapness imo.
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@jbulltard1 Similar to the $UNTC thesis: cash generated from reserves > EV and all being given back to shareholders instead of used to buy more reserves (what typical E&P execs do)
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@Josh_Young_1 As crazy as that sounds, if you invert it - has the US ever tried to assassinate a foreign president/leader - maybe it doesn’t sound as crazy…
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@MikeFritzell How much of their business is in China which presumably isn’t captured with Google Trends?
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“We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten.” - Bill Gates
@JohnHuber72 Solow's paradox comes to mind: In the early 1980s, investment in PCs and IT infrastructure was justified by an impending productivity boom, which stubbornly refused to show up in productivity statistics. It took until the late 90s to materialize.
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@ArenaManCapital Thanks. I used to code (Comp Sci major!) but it’s been like 20 years, ha. I should probably pick it up again for stuff like this
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@weenink_arnold The way I read the release is that they’ll also “pay” the amount of cash they have on top of the 25M. E.g. if Sharp has 2M net cash on close total price paid would be 27M. So wouldn’t change the EV/S multiples. Do you read it differently?
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@willschoebs Thanks will do. I know I’ve looked at them in the past and passed but will take another look. Thanks
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@orrdavid Emergency vehicles and RVs significantly less commoditized than autos. $MLR has done pretty well for a long time in emergency vehicles while RVs have a slew of long term winners (albeit cyclical), e.g. $THO, $PATK, $LCII, $WGO, etc.
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@turtlebay_io I had the pleasure of covering them during my first assignment after bschool. Truly an amazing business and great people.
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@ValleyFallsRI @SebKrog Sweden by far the best. UK pretty good but they typically hate buybacks. Italy ok. Poland can be a bit sketch but nothing egregious comes to mind. Japan probably the worst but getting incrementally better.
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