Joel Greenblatt literally wrote the book on special situation investing, so it's fitting that he teaches the Value & Special Situation Investment class at Columbia Business School.
This particular lecture is interesting because it encompasses a wide spectrum of the value framework; a special situation (spin-off) and a wonderful business (Moody's). It is also caught my attention because it features Rob Goldstein, partner at Gotham Capital. Before this lecture I was familiar with just one-half of Gotham's high performing investment partnership. Goldstein does a case study of Moody's (MCO), which went public via spin off from Dunn & Bradstreet (DNB) in September 2000. The challenge is paying up for quality. To find a comp., the Gotham team used Buffett's 1988 Coke (KO) investment as an example of paying a premium for quality.
I have a fond opinion of Moody's as when I was a credit analyst, Moody's was was the more conservative of the rating agencies, and I used the "Moody's medians" as the benchmark for much of my coverage ratios.
The second half of this 2 hour+ video is Greenblatt lecturing on "The Little Book" to his CSB class. That will be the second of two posts from this video. As usual, if you don't want to watch an hour of video, my notes are below. All the charts I've included go to the time of the lecture November 2006, for proper perspective. My Notes:
Coke as a comp:
Moody's:
ROE's and Growth Rates:
1 Comment
My career in asset management started with Federated Investors' municipal bond group. As an analyst, I reported to the Sr. Analysts and Portfolio Managers. The talented team at Federated has a deep expertise in municipal credit.
Therefore, Lee Cunningham is the best person I know to answer the question "Is Chicago the next Detroit?" As Sr. Portfolio Manager, he runs Michigan focused and High Yield municipal bond funds for Federated Investors. If you want to learn more about muni bonds, I recommend this book (link). Also, if you are on twitter, I recommend followingCate Long (@cate_long) for all muni bond news.
I hope you enjoy Klarman's presentation as much as I did. It's is a bit long but worth the time.
Like Greenwald says in the beginning, the founder of Baupost Group needs no introduction. Klarman's remarks begin around the five minute mark. If you aren't familiar, he also wrote this book (link). As usual, my notes are below. You may find Baupost Group 13F here, but it represents only a fraction of total firm AUM.
My Notes:
Q&A:
Ethan Berg worked for Michael Porter. This is how he analyzes Economic Moats with the Five Forces.6/16/2015
Ethan Berg is a management consultant turned investment partnership manager. He worked for six years at Michael Porter's Monitor Group. Of course, Porter is best known for his Five Forces analysis. As a management consultant Berg brings a unique perspective, a certainly a different methodology to value investing.
If you've ever worked with a management consultant, you know they have buzzwords and terminology that can be foreign to an investment manager. This interview is no different. "Assets and Activities", and "Activity Webs" are discussed at length. However, don't be deterred by this seeming foreign language, these are simply tools to gain a deeper understanding of Economic Moats. Listen below, and check out my notes further down the page.
This interview comes to us from the must-listen Value Investing Podcast by John Mihaljevic, CFA, author of The Manual of Ideas. More about Berg from The Manual of Ideas:
Ethan Berg is the founder and chief investment officer of G4 Partnership, an investment partnership dedicated to the implementation of the investment discipline of Ben Graham, Warren Buffett and Seth Klarman. Prior to founding G4 Partnership in 2000, Ethan was a management consultant at Monitor Group for six years, including two years of working directly for Michael Porter.
My Notes:
The common perception of activist investing is personified by Carl Icahn. Activists are known for using PR campaigns to exert pressure and affect change at target companies.
However Jeffrey Ubben of ValueAct is among the world most successful activist investors, and rarely goes public. In fact, he says public campaigns are less effective in unlocking value than his collaborative approach. Ubben recently made waves in pharma/biotech when he sold part of his long time Valeant ($VRX) stake. Enjoy the 25 minute interview below, in two parts. It is courtesy of the amazing OpalesqueTV YouTube channel.
My Notes:
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