1. The super early bird rate expires tomorrow (Friday) at midnight for both our upcoming webinars on How to Launch and Build an Investment Fund (Sept. 14, 17 and 18, 7:00-9:30am each morning) and an Advanced Seminar on Short Selling (Sept. 19-21) as well as our five-full-day, in-person program in NYC (Sept. 24-28), which starts with our three-day Lessons from the Trenches bootcamp followed by the two seminars. Further information including agendas for each program is posted at www.tilsonfunds.com/KaseLearning.pdf
Please email me and let me know which program(s) you're interested in and I will send you the rates and registration link (I'm also happy to answer any questions via email or a phone call).
2. Glenn and I will be teaching two free 2-hour seminars in NYC on Wednesday and Thursday, Sept. 12-13, from 5:30-7:30pm, followed by cocktails:
- An Introduction to Value Investing (Sept. 12)
This will be a two-hour overview of value investing and will address various topics including: what is value investing, intrinsic value, margin of safety, three ways to beat the market, the three steps to evaluating stocks, valuation techniques, traits of successful investors, how to develop an edge, and an example of a stock pitch of a current favorite idea.
- Understanding Financial Statements (Sept. 13)
Using the actual financial statements of well-known companies like Costco, we will go through the income statement, balance sheet and cash flow statement, defining and explaining the major line items such as revenue, COGS, SG&A, net income, share count, inventories, account receivable, accounts payable, assets, liabilities, debt, equity and capital expenditures. Then we will show how to do basic analyses of the financial statements, calculating growth rates, margins, EBIT, EBITDA, current and quick ratios, debt to equity ratio, return on equity and free cash flow. Finally, we will show how the financial statements tell a story about a company, how a company is raising and allocating capital, and potential warning flags.
There will be plenty of time for Q&A during each seminar as well as the cocktail hours afterward.
The location is the IESE Business School, 165 West 57th Street.
Capacity is limited and the last time we did this, it sold out so register now here: www.eventbrite.com/e/new-york-city-kase-learnings-free-seminars-registration-47726400950
3. On his 88th birthday today, Buffett did a 22-min interview with CNBC, covering various topics. Shortly thereafter, they interviewed me by phone for seven minutes: https://youtu.be/yMiAEzcCl20. Here's an excerpt:
The buyback news was welcome to at least one shareholder who has followed the company for decades. Whitney Tilson, the former head of Kase Capital hedge fund, told CNBC he was "delighted" to hear Buffett say the company had abandoned the book value metric for buybacks.
"Today I believe is the first time that Buffett has ever disclosed that they have bought back any shares above 1.2 times book," said Tilson, who has attended the last 21 annual Berkshire shareholder meetings held in Omaha, Nebraska. "And I think this is a major, material new piece of information because it means he's been buying back stock at 1.4 times book at least, which is where the stock has traded since then."
Tilson said the remarks implied a "soft floor" for Berkshire's A stock "north of $300,000 a share," compared to the $317,000 where it opened Thursday.
4. Speaking of Buffett, here's an article by Guy Spier about the lunch he and Mohnish Pabrai had with him a decade ago: What lunch with Warren Buffett taught me about investing and life, https://www.marketwatch.com/story/what-lunch-with-warren-buffett-taught-me-about-investing-and-life-2018-06-11. Excerpt:
Buffett offered up another, more profound lesson: In order to see the best opportunities in life, it's important that others also get a good deal — ideally one even better than they bargained for. Nowadays this way of negotiating is ingrained into my behavior and habits, but that wasn't the case 10 years ago. At the time, I still had this idea that being good in business was about gaining an edge and winning more than the other guy. Taken to its extreme, you become the guy where, after you shake someone's hand, they want to check if they still have five fingers.
But the man I met at Smith & Wollensky's steakhouse in New York that day 10 years ago had a completely opposite mindset. I can't tell you how startling it was for me: there was Warren Buffett, one of the richest men in the world, and all he wanted to do was serve us and please us. He told us that he was going to make damned sure this lunch was worth our while. And for the three or so hours he was with us, he enthusiastically focused on what we wanted to talk about, and shared as much as he could.
This taught me something very important. If Warren Buffett was working so hard to please me, how much harder should I work to please people around me — even if they are less wealthy, less able, less powerful?
While this question seems on the surface to have nothing to do with value investing, it may be the only thing. Because I have learned that, sooner or later, the only thing we have to go on is others' willingness to share back to us. And, over time, their willingness will have less to do with how smart, rich, powerful, or good-looking we are.
5. An excellent article in Barron's about a phenomenal website, ValueInvestorsClub.com. I know the founders, was one of the first members, and have been telling everyone ever since that they should apply and become a member (even if you're not, guests can still get a lot of value). Even Wall Street Pros Have a Tough Time Getting Into This Club, www.barrons.com/articles/even-wall-street-pros-have-a-tough-time-getting-into-this-club-1535143468. I was quoted here:
"The beauty of VIC is that it offers anonymity in a carefully monitored environment," says Whitney Tilson, a former hedge fund manager who has been a member since the site was started in 1999. "You can talk to people who would never speak publicly. It's the smartest collection of investors I've ever seen."
... Investors also use the site to get valuable criticism. "If you're a billionaire fund manager, worried your analysts won't stand up to you, you can pitch an idea on VIC and people at opposite ends of the spectrum will shoot holes in it," says Tilson.
My friend, former student, and speaker from the shorting conference, Berna Barshay of Viola Capital, is quoted at the end:
Berna Barshay, a hedge fund manager, didn't make it in with her first pitch of apparel company Tommy Hilfiger. The stock wasn't cheap enough to be a good value, she was told in her rejection letter. But she appealed the decision, sending in a follow-up analysis with a detailed rebuttal. "Eventually, they relented and said, 'We still don't think it's a good value, but you argued your case so well that we'll let you in.' " The stock ended up being acquired a few months later, in 2005, at a steep premium.
Barshay, who recently launched a new fund, Viola Capital Management, says VIC is one of the few places on Wall Street where gender bias isn't an issue. The industry remains a boys club where women aren't always invited to meetings or events where deal-making happens, she says. On VIC, no one knows if they are talking to a male or female. That focuses conversations solely on the investment idea.
"When people don't know if you're a man or a woman, if you're young or old, you stand on the quality of your idea," Barshay says. "I've never had trouble being taken seriously once I have a seat at the table with other investors. The problem is getting a seat in the first place."