How About Another Catalyst? (Part IX)

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Anhui Chaodong Cement, catalyst, David Wong, Dhir India, FBD Holdings, German bunds, intrinsic value, major sale, NAV discount, Ovoca Gold, Polymetal, Prosperity Minerals Holdings, Sirius Real Estate, takeover offers, Tim McCutcheon, Trinity Biotech, wind-down

Continued from here. We were looking at a major sale as another catalyst.

Recently, I confess I’ve been less focused on this (and my next) catalyst. No bad reflection, it simply reflects my ‘bar-bell‘ approach – investing in lower-risk catalyst situations nicely balances out higher risk positions (like emerging & frontier market equities, as most would characterize them). This can mean higher risk catalyst stocks get crowded out of my portfolio… But if I want to shift overall risk lower, as I suspect I’ll continue to do, this catalyst category should make a nice comeback in my riskier portfolio allocation. Let’s illustrate with some examples:

i) I did a Dhir India (DHIR:LN, delisted) writeup last November. An initial catalyst attracted my attention in September – in their Final Results they stated: ‘…The Board has decided to seek to accelerate the process of returning value to shareholders through a review of the investment and realisation strategy and over the next twelve months steps will be taken to try and achieve this aim‘. Not quite definitive, but this obviously offered a wind-down strategy as a catalyst.

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A Greek Tragedy…?

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austerity, Big Brother, budget deficit, citizenship, Debt/GDP Ratio, default, Europe, European sovereign debt crisis, Greece, Occupy Wall Street, politicians, remittance economy, tragedy of the commons, US, venality

Two key (related) themes echo through recent articles about the Greek sovereign debt crisis. I’ve the distinct & nagging feeling something’s missing here? Hmmm… Anyway, the first theme is the expression of outrage at Greek politicians, their profligate ways and their general shiftiness. Sure, it’s always fun to criticize politicians, but why bother really? What exactly did you expect of them? I’m bemused by the air of superiority displayed in some articles – nah, nah, nah, my politicians are better than yours! Rubbish, there’s nothing unique about Greek politicians in a global context – they’re just a little further down the road to hell…

Let’s think about what makes them tick: Well, they say politics is an unpredictable business – true, you just can’t second-guess stupidity sometimes. But otherwise, you mostly just need to consider the actors’ motivations. Depressingly, this seems to boil down to Money, Power, or both! OK, Duty’s another possibility – reluctant leaders are often the best leaders. But how often, in the past decade or two, have you seen a politician consistently serve out of a clear sense of duty?

Hitting The Century: It’s Pretty Panties Time..! (II)

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absolute return, alternative assets, closed-end funds, currency allocation, distressed assets, emerging markets, frontier markets, FX rates, home bias investing, NAV discount, portfolio allocation, quantitative easing, real assets, special situations, value investing

Continued from here – we examined the true underlying currency allocation in my portfolio (incorporating other financial/investment assets & liabilities). I encourage you to perform a similar exercise (on an ongoing basis). Some will discover unexpected allocations, but more will discover how concentrated they are in a single currency! Of course, I’ve written about home bias before, but that was in relation to equities: I beg your indulgence as I take another brief look from a currency perspective.

If you suffer from single currency concentration (ouch…I think about the EUR/Eurozone so much it bloody hurts! ;-)), presumably it’s in your home currency? Think about the fact your job, your house, (much of) your wealth, the level of your taxes, even your (assumed) social order is already inextricably linked to that currency & country. How much do you want to keep adding to that bet? But the majority of readers live in developed markets, and may ask: ‘How seriously could my home currency decline?‘. Well, say you live in Japan: The USD/JPY‘s 80.53 right now – how outlandish is it to picture it at 120+, or even 150+, in 5-7 years?!

A Brief Diagnostic on Trinity Biotech

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Ex-Cash Ratios, intrinsic value, Medical Devices/Diagnostics, share repurchase, technical analysis, Trinity Biotech

I last wrote about Trinity Biotech (TRIB:US) here.

Since then, we’ve been rewarded with another good set of (Q1 2012) results – more good news-flow, plus steady progress on the sales & earnings front. The Boys from Bray really do continue to deliver! The shares have just gone xd, and an annual dividend of $0.15 per ADR will be paid on June 22nd. This is small (a 1.3% dividend yield) vs. the share price & their current cash pile (about $3.60 per ADR), but the 50% yoy increase is a confident signal. TRIB also confirmed their intention to continue with open market share repurchases up to a max. of about $25 mio, around 10% of their current market cap. Here’s their latest investor relations presentation.

Hitting The Century: It’s Pretty Panties Time..! (I)

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alpha, catalyst, developed markets, emerging markets, EUR/USD, European sovereign debt crisis, foreign exchange trading, foreign stock listings, frontier markets, FX rates, Human Capital, macro perspectives, Margin of Safety, portfolio allocation, portfolio performance, stock screener, value investing, value investing bloggers

Oh Gawd, when will I learn..?! Last time ’round, the ‘pretty panties‘ phrase grabbed a whole new wave of (doubly) frustrated web searchers & readers. Who knew? But perverts¹ are people too! A majority even have jobs, I suspect. And many of these hand shandy artists are probably good savers (limited range of interests, they stay home a lot…). They might just appreciate some investing insight! In fact, gentlemen, we can rebuild them. With their powers of concentration, and attention to detail, surely they’d make excellent value investors?! My dear mother would be so proud if I converted even one of these bishop buffers…

So we’ve reached Post 100 – time to show off my pretty panties a little?! This blog’s mostly been about my stock picks and, more recently, I’ve stepped back to write more about macro perspectives. What’s perhaps been missing, as I’ve noticed with many other blogs, is a closer look at portfolio construction, allocation and metrics. This is a big oversight on my part – if you’re a regular reader, you already know this aspect of investing is actually v important to me!

How About Another Catalyst? (Part VIII)

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acquisitions, catalyst, intrinsic value, IRR, Leverage, major sale, principal-agent problem

Continued from here, and here’s the first post in the series.

Well, what the hell have I been up to..? Yes, I know I’ve owed a couple more posts on catalysts for some time now. But that’s the luxury of being a blogger, I’m master of my domain! Oh, er…I mean I can write about whatever I fancy each day/week. But damnit, Carstairs, a gentleman always finishes what he starts..! OK, OK, here we go: btw While I believe my final two catalysts are genuine catalysts, note they’re harder to spot/evaluate, riskier and may require a longer time frame to crystallize. [You may have noticed I’ve broadly laid out this series in terms of increasing risk & timelines].

The Second Coming

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The Second Coming, William Butler Yeats

The Second Coming

Turning and turning in the widening gyre   
The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world,
The blood-dimmed tide is loosed, and everywhere   
The ceremony of innocence is drowned;
The best lack all conviction, while the worst   
Are full of passionate intensity.

Surely some revelation is at hand;
Surely the Second Coming is at hand.   
The Second Coming! Hardly are those words out   
When a vast image out of Spiritus Mundi
Troubles my sight: somewhere in sands of the desert   
A shape with lion body and the head of a man,   
A gaze blank and pitiless as the sun,   
Is moving its slow thighs, while all about it   
Reel shadows of the indignant desert birds.   
The darkness drops again; but now I know   
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,   
And what rough beast, its hour come round at last,   
Slouches towards Bethlehem to be born?

William Butler Yeats (1919)

 

A Simple Eurobond Proposal

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Debt/GDP Ratio, default, ECB, ESFS, Eurobonds, European Fiscal Compact, European sovereign debt crisi, Eurozone, fiscal deficits, Ireland, LTRO

I’ve tried my best to ignore all European news and hysteria in the past couple of years. It’s been a wonderful time/sanity-saver for me! And really, what have I missed in the way of concrete political progress?! But enough is enough, how about a real bloody solution now..?

I was never impressed with the old chestnut that sovereign debt’s superior (to corporate) due to a government’s ability to impose & collect taxes. Sure, and it can spend just about any level of revenues too, among other failings..! Whatever the argument, you can’t escape the fact a nation is the embodiment of ‘Us vs. Them‘. When it comes to the crunch, government can always re-write, or tear up, any contract they wish – the ‘Us‘ inevitably comes first . [Hmm, I guess Ireland’s the exception that proves the rule? God, the half-wits in power couldn’t even fail properly..!]. So any type of in-country sovereign enhancement is pointless. And talk of, say, collateralization or sale of Greek islands is just plain ludicrous!

US Economy, Government Finances & Debt – The Final Gory Details (IV)

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% of GDP, average debt maturity, baby boomers, budget deficit, Debt/GDP Ratio, European sovereign debt crisi, fiscal cliff, fiscal deficits, Intragovernmental Holdings, Reinhart & Rogoff, Sell in May, Social Security, US Congress, US government finances, US government revenues, US government spending, US Treasury

Continued from here.

Apologies, readers. Deficits left me feeling a little nauseated, I had to take a little breather on this series! In my last post, I highlighted the 2010 total US budget deficit (ignore the primary deficit, it’s irrelevant) was a whopping 8.9% of GDP. In the past half-century, this is the 2nd largest deficit on record (2009 being the winner), but it’s in good company. Nine of every 10 years politicians have outspent revenues, and in 2009-12 the deficit’s expected to consistently exceed $1 trillion (and 7.5% of GDP). It’s no longer surprising how quickly politicians can turn the truly exceptional into the simply mundane…

I think I also sidestepped the quicksand of Republican vs. Democrat debate?! This debate, and their respective philosophies, seem utterly pointless when there’s no credible attempt to eliminate deficits – it’s just moving the deck chairs ’round the Titanic. And deficit rhetoric’s always presented as ‘spending cuts, no tax hikes‘, or vice versa. Such one-sided (and unworkable) solutions are ludicrous – the only sensible solution is a deficit elimination plan based equally on tax hikes & spending cuts.