Investment thesis on Merlin Entertainments (UK: MERL)
Published in December 2017 at a price of £3.55 per share.
Thesis highlight: After a 33% share price fall since June 2017, due in part to UK terror attacks, LEGOLAND licensee Merlin finally represents an attractive compounding opportunity based on the LEGO success story.
A critique of the activist long thesis on Sotheby’s (NYSE: BID)
Published in September 2013 at a price of $48 per share, the critique questioned the long thesis of 13D shareholders at the time.
Two and a half years later, by February 2016, Sotheby’s share price was as low as $19. By April 2017, it was still below $48.
Published Commentary (September 2013)
The recent stake-building in Sotheby’s by so-called activist investors Marcato Capital Management and Third Point made me curious to revisit the investment case for this intriguing company. Of course, as Sotheby’s share price has climbed from $6 in 2009 to nearly $50 recently, my interest as an investor has waned accordingly over the last few years…
Value Ideas in Action is a reflection of the personal investment philosophy and approach of Oliver Mihaljevic. As this approach is essentially unconstrained in terms of investment universe, the featured investment ideas vary greatly in terms of market capitalization, industry, geography, and similar identifiers. We are guided solely by mispricings, or in Charlie Munger’s words: “We look for a horse with one chance in two of winning, and which pays you three to one.”
The above research examples show the limitations of focusing solely on point-in-time investment ideas. Irrespective of the idea analysis itself, key questions are left unanswered such as how to think about initial position-sizing or how to adjust the thesis and position-sizing over time. We created Value Ideas in Action to answer these questions as well, and so to better serve investors throughout the entire investment process.
We are fond of Marty Whitman’s saying that “rarely do more than three or four variables really count. Everything else is noise.” Accordingly, for each of our investment ideas, we include a one-page thesis in addition to more detailed research analyses which we typically add to over time as we deem necessary. In doing so, we aim not to create noise for you or for ourselves.
If helpful to our investment case – and not violating the above “no noise” requirement – we will initiate direct conversations with model portfolio companies and/or related companies. Similar to the above examples of Lender Processing Services and Thomas Properties, we aim to record such conversations for the benefit of our subscribers.