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    2nd Oct 15

    Grinnell College

    There is a lot of money in the world and there are often fascinating stories behind it. This is a great story and what also makes it great is what a pertinent lesson it is for “some people” to understand how much more can be accomplished in a world...

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    29th Sep 15

    A New Beginning

    Forestar Announces CEO Transition, Management Promotions and Board Retirements  ************************  September 28, 2015 06:45 AM Eastern Daylight Time AUSTIN, Texas–(BUSINESS WIRE)–Forestar Group Inc. (NYSE: FOR) today announced that James M. DeCosmo, President and Chief Executive Officer, stepped down September 25, 2015. The Board of Directors has named Phillip J....

  • 28th Sep 15

    Right On…181 Years Later

    William Leggett, a Jacksonian Democrat and abolitionist, writing in the New York Evening Post, Nov. 21, 1834: “Whenever a Government assumes the power of discriminating between the different classes of the community, it becomes, in effect, the arbiter of their prosperity, and exercises a power not contemplated by any...

  • 10th Sep 15

    CSC Strategy Letter | Number 22 | Paleo Investing

    CLICK HERE to download Cove Street Capital’s September 2015 Strategy Letter Number 22, “Paleo Investing”

  • 10th Sep 15

    Mini Book Review and Thoughts | “Minding the Markets: An Emotional Finance View of Financial Stability” — David Tuckett

    I will ignore the somewhat silly premise of the book which was to analyze the emotional nature of “money managers” and thus glean some clues as to how to prevent future financial crashes. But I would note the following: If this is what passes for money management in the...

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    10th Sep 15

    We Would REALLY Like to Know How Many Times This Happens

    Dole C.E.O. and Aide Found Liable for $148 Million in Buyout

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    15th Aug 15

    If You Lacked a Reason to Hate Proxy Advisory Firms Before Today, Here is the Last Straw

    Related: Plus ça Change, Plus C’est La Même Chose.; The Fire is Burning Leading Proxy Advisory Firms ISS and Glass Lewis Recommend OM Group Stockholders Vote “FOR” the Merger Transaction with Apollo Affiliated Funds in Partnership with Platform Specialty Products All-Cash Transaction Provides OM Group Stockholders with $34.00 Per...

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    15th Aug 15

    Investment Management is Not a Drinking Game

    Aside from a mayonnaise issue, one of the largest pet peeves here is the following: focusing one’s time on finding interesting businesses and values first and then considering some macro considerations next is known as “Bottom-up” investing. It is NOT “BottomS Up.” Have you ever heard someone say we...

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    15th Aug 15

    The Investment World Under Hillary Clinton: Part I

    This is certainly our favorite exchange this quarter in the ongoing dialogue between management and shareholders at Richardson Electronics (RELL). The pertinent facts you need to know here are that there is an “A-B” structure that keeps voting control with a 71-year-old CEO…and that said CEO is investing for...

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    15th Aug 15

    What Truly Matters is Finding the Right Partners

    There is a very real temptation to think someone else is smart based upon the premise that they say things with which you completely agree. Here is a perfect example. Now let’s put this interview into reality. We have met with MIT. We seem like a perfect match. “We...

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    15th Aug 15

    Capital Allocation 101

    Sadly, most CEOs don’t read this. They should.

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    15th Aug 15

    Do We Think This Country Would Be Better Off with More Jaime Dimons or Elizabeth Warrens?

    Quotation of the Day: “The problem for these guys is that I fully understand the system and I understand how they make their money. And that’s what they don’t like about me.” —Senator Elizabeth Warren, responding to criticism from Jamie Dimon, the chief executive of JPMorgan Chase. I have...

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    15th Aug 15

    Another Sign of These ‘Loose’ Times

    We’ve witnessed many weird and fascinating things in these six years of zero interest rates and quantitative easing but nothing that we’ve seen has personified the looseness of monetary policy like what was uttered on RCI Hospitality’s second quarter call. By way of background, RCI Hospitality is an operator...

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    15th Aug 15

    Tweedy Browne’s Characteristics of Successful Investing

    A nice reminder for all of us…since it can seem easy to forget when one lives in a world seemingly full of unicorns.

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    15th Aug 15

    Very Relevant Thoughts for CSC – Culled from “The Rediscovered Benjamin Graham”

    “I don’t believe any of us have the pretension of believing that by being very good analysts, or by going through very elaborate computations, we can be pretty sure of the correctness of our results. The only thing that we can be pretty sure of, perhaps, is that we...

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    15th Aug 15

    Value Investing: Fact and Fiction

    “I came, I saw, I purchased at a low multiple” …from Graham to Asness it still works. CLICK HERE to read more.

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    15th Aug 15

    Active Share is Overrated — Just Be Right!

    Investing other people’s money for a fee is fiendishly simple—just avoid being terribly wrong. This applies to widely diversified or concentrated portfolios. Read on.

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    15th Aug 15

    Blast from the Past

    A few thousand years ago, a friend of the CSC lead PM was a good friend of Jim Cramer who was starting this “online thing” back in the late 1990’s. Was there room for someone writing about value? It was a great time, the original staff of writers were...

  • 30th Jul 15

    CSC Strategy Letter | Number 21 | Three Anecdotes Don’t Make a Data

    CLICK HERE to download Cove Street Capital’s July 2015 Strategy Letter Number 21, “Three Anecdotes Don’t Make a Data”

  • 30th Jul 15
  • 15th Jun 15

    The Fire is Burning – OM Group Continued

    Related: Plus ça Change, Plus C’est La Même Chose. ************************ The following is a letter by Wynnefield Capital Management to fellow shareholders of OM Group (OMG), released June 11, 2015: ************************ Wynnefield Capital Management, LLC 450 7th Avenue, Suite 509 New York, NY 10123 OMG’s Board Orchestrates a Decade...

  • 4th Jun 15

    Plus ça Change, Plus C’est La Même Chose.

    (Translation: Another Weasel-like Deal Where Public Shareholders are Sold-Out.) The topic for today is the deal announcement on May 31st that the OM Group (NYSE: OMG) decided to sell itself to the private equity firm Apollo Group for $34 a share. We own approximately 1.5% of the shares outstanding...

  • 14th May 15

    One More Look at Currency

    by Ben Claremon | Research Analyst As of the huge currency moves the world has witnessed over the last year or so, the topic of currency hedging has recently become very pertinent to both investors and companies who generate sales overseas. For anyone who has not been paying close...

  • 14th May 15

    Summer Reading List

    All the Light We Cannot See — Anthony Doerr Churchill — Paul Johnson Hitch-22: A Memoir — Christopher Hitchens How Life Imitates Chess: Making the Right Moves, from the Board to the Boardroom — Gary Kasporov The Limits of Strategy: Lessons in Leadership from the Computer Industry — Ernest...

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    14th May 15

    Things That Make Sense to Us…

    …That Were Written By Other Guys

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    14th May 15

    Atul Gawande, Money Manager

    I have no idea how this guy has a life when I merely glance at his bio—but that is not our concern. Substitute “money manager” instead of doctor and his commencement speech becomes worth thinking about. And his new book, Being Mortal, is a stupendously important book for anyone...

  • 4th May 15

    CSC Strategy Letter | Number 20 | Don’t Bring a Knife To a Gun Fight

    CLICK HERE to download Cove Street Capital’s May 2015 Strategy Letter Number 20, “Don’t Bring a Knife To a Gun Fight”

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    23rd Apr 15

    The Good News is We Are on the “Public” Side

    Managing $163 billion is not easy. What this piece points out is: It’s generally right. “Private” or “Alternatives” are a good idea only when practiced in small size and in small distribution. What is clear is that “alternative” investing as practiced institutionally is neither. Public pension math is a...

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    23rd Apr 15

    This is a Great Response

    “Logic and experience indicate that barring investments in a major, integral sector of the global economy would—especially for a large endowment reliant on sophisticated economic techniques, pooled funds, and broad diversification—come at a substantial cost,” wrote Harvard President Drew Faust last year, explaining the University’s refusal to join the...

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    23rd Apr 15


    I have been an on-again, off-again subscriber of the Journal of Applied Corporate Finance (and a predecessor) for more than 20 years. It is worth reabsorbing every few years because our ears get so full of the conventional, PR-driven crap that pours out of corporate America. Then you subscribe...

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    30th Mar 15

    Further Thoughts on the Merits of Buybacks

    by Rohan Rangaraj | Research Analyst One of the official Favorite Books in the Cove Street Capital Library is The Outsiders by William Thorndike, an in-depth study of eight of the last half-century’s greatest CEOs in terms of value creation. One trait they all shared was the propensity to...

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    30th Mar 15

    Send Your Kids to Bowdoin?

    CLICK HERE to download a recent speech by noted Soros “sidekick” Stanley Druckenmiller.

  • 25th Mar 15

    Pondering Things Way Out of Our Control

    by Eugene Robin | Research Analyst The magnitude of the recent price decline caught many of “us” off guard and caused many (including Cove Street) to re-think our notion of what constitutes a sustainable oil price. Here, we analyze the somewhat complex question of “is $40 oil sustainable?” Currently,...

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    18th Feb 15

    50 Shades of Grey, the G-rated Version

    From time to time I have embarrassing moments, like admitting I have read L.J. Rittenhouse’s book, “Investing Between the Lines: How to Make Smarter Decisions by Decoding CEO Communications.” This was a fairly simplistic read on a 2 hour flight that essentially says: a CEO should write like Carol...

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    10th Feb 15


    CLICK HERE to download a press release from Forestar Group Inc.

  • 9th Feb 15

    Are You Better at Currency or Oil Price Forecasting?

    by Dean Pagonis | Research Analyst We think you might have noticed the dollar has been appreciating versus most currencies. (Have you heard the one about the Canadian Peso?) Source: New York Times, 2015 So yes, there is a negative translation effect for large multi-national companies and yes, a...

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    9th Feb 15

    Coherent and Consistent

    This report remains the single most coherent and consistently negative argument against…a lot of things we do.

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    9th Feb 15

    Well Said.

    Mr. Gideon King’s parting notes on his decision to close down his hedge fund business: “Controlling capital and engaging intellectually is good work if one can get it. The business, on the other hand, has changed dramatically. As the endless quest for becoming institutional continues on, the soul of...

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    9th Feb 15

    The Blame Game

    From time to time we must look in the investment mirror and conclude that we are stinking and we have no one to blame but ourselves. This is an interesting piece that academically exposes a lot of the other times.

  • 29th Jan 15

    CSC Strategy Letter | Number 19 | The Great Complacency…Continued

    CLICK HERE to download Cove Street Capital’s January 2015 Strategy Letter Number 19, “The Great Complacency…Continued”

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    8th Jan 15

    The Reluctant Warriors

    A friend of ours who works for a well-known activist firm summed it up perfectly when he said, “We are living in the era of the activist halo.” From 300-page PowerPoint presentations to incredible revelations about the amount of salt that should be included in pasta water to investors...

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    18th Dec 14

    Reading Disorder

    A senior member of our investment team read this transcript and couldn’t help but replace the words “investment management” in lieu of the subject being discussed. Worth reading and thinking about.

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    2nd Dec 14

    What a Phony, Part II

    Click here for Part I: The Worst Piece of Corporate BS, 2/11/2013 A recent article in the Wall Street Journal penned by Michael Dell is so full of self-serving garbage it is difficult to know where to start. (Click here to go to the op-ed at WSJ.) What is clear in...

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    11th Nov 14

    Does This Make it Impossible for a Value Investor to Have a Beard?

    CLICK HERE to download “The hipster effect: When anticonformists all look the same” by Jonathan Touboul

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    17th Oct 14

    All That is Necessary for the Triumph of Incompetence is That Good Men Do Nothing

    This is a very nicely done and thoughtful piece about a topic that every serious long term shareholder eventually faces despite best intentions. CLICK HERE to download PDF

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    2nd Oct 14

    CSC Strategy Letter | Number 18 | Metastability?

    CLICK HERE to download Cove Street Capital’s September 2014 Strategy Letter Number 18, “Metastability”

  • 29th Sep 14

    Buyback BS

    Of the myriad of reasons proffered daily as to why we are the verge of stock market doom, a “decline in share repurchase” has come up a lot. We would note the following: As the below chart suggests, shares outstanding for most of the S&P 500 as a whole...

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    23rd Sep 14

    Let’s Picket for Better Global Sewage

    Politics aside, we are regularly asked by large institutional clients, “How is Climate Change affecting the way you invest?” Our short and practical answer is “It doesn’t.” This piece by longtime favorite economic and environmental thinker Bjorn Lomborg is a more detailed version of that answer. It also suggests...

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    23rd Sep 14

    Leading Candidate for Worst Sell Side Piece in 2014

    In regard to Tesla… Having defended our more cautious stance for over a year, we find ourselves torn in upgrading as it is clear substantial risks remain. This is, in part, given (1) the lack of available data to question management’s claims with respect to battery pack durability (among...

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    29th Jul 14

    Quarterly Earnings: Our Sentiments Exactly!

    by Ben Claremon | Research Analyst As long term-focused investors, we have a certain disdain for the quarterly earnings rigmarole and the associated maniacal focus on “beating” what are somewhat irrelevant earnings per share estimates. The truth of the matter is that, more often than not, what happens during...

  • 14th Jul 14

    CSC Strategy Letter | Number 17 | Hockey is Nothing Like Investing

    CLICK HERE to download Cove Street Capital’s July 2014 Strategy Letter Number 17, “Hockey is Nothing Like Investing”

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    7th Jul 14

    Very Scary

    Our takeaway on this speech is three-fold: We paraphrase: “Wise regulation, which is mostly now in place globally, will ensure that future financial crises will not billow out of control.” Wow, I didn’t realize that until 2010 the world didn’t have any regulators—no wonder why we have had periodic...

  • 11th Jun 14

    More Corporate Governance Weirdness

    The “Entertainment Business” is well known for having a callous disregard for other people’s money. The origins of Live Nation (LYV) and some of the Board principals involved—current and former—include some of the more egregious examples we’ve seen in our career. Liberty Media, represented on the Board by Greg...

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    29th May 14

    If Invited, I Shall Serve — A Rock and Roll Update

    by Jeff Bronchick | Chief Investment Officer Fender tried to go public in 2012. It failed and here is why. In how the world should work, the prevailing private equity investors bit the bullet and raised new capital at levels well below what was being offered to the public....

  • 29th May 14

    Social Media Lets Us Pretend to Know Something About Everything

    by Jeffrey Bronchick | Chief Investment Officer Read this article from the New York Times and replace many of the nouns with “investor,” “stock,” and “investment industry.” Long before social media, Wall Street and its predecessors had a wildly viral network of passing rumors around that may or may not...

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    29th May 14

    Reading List – The Classics

    _________________________________________________ Recently added: Conservative Investors Sleep Well – Philip A. Fisher Good Strategy Bad Strategy: The Difference and Why It Matters – Richard Rumelt Organizational Intelligence: Knowledge and Policy in Government and Industry – Harold L. Wilensky _________________________________________________

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    9th May 14

    Buffett vs. Icahn on Coca Cola? Slam dunk for Icahn.

    by Jeff Bronchick and Ben Claremon We have been thinking about this issue for a few weeks, tempering our urge to dash out some heated thoughts of the moment. We have gotten over it. Ignoring for a moment the details of Coca Cola’s magnificent excessiveness in its executive compensation...

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    9th May 14

    A Word From Our Trader

    by Matt Weber |  Director of Trading + Operations There is more to life than increasing its speed. -Mahatma Gandhi Even though we are “investors,” we are very aware of the High Frequency Trading (HFT) issues that emerge on our playing field. While the portfolio management team at CSC...

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    21st Apr 14

    Why We Continue to Think the ISS Approach Toward Corporate Governance and Executive Pay is Moronic

    CLICK HERE _________________________________________________ The opinions expressed herein are those of Cove Street Capital and are subject to change without notice. Past performance is not a guarantee or indicator of future results. Consider the investment objectives, risks, and expenses before investing. You should not consider the information in this blog a...

  • 20th Mar 14

    CSC Strategy Letter | Number 16 | What Would You Do if You Were Prem Watsa?

    CLICK HERE to download Cove Street Capital’s March 2014 Strategy Letter, Number 16, “What Would You Do if You Were Prem Watsa?”

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    24th Jan 14


    Here are some thoughts that didn’t make it into our January Strategy Letter but that I wanted to clean off the plate for the New Year: Becoming a celebrity investor as a result of being a serial presenter on the investment conference trail is clearly a cool thing for...

  • 15th Jan 14

    CSC Strategy Letter | Number 15 | The Fear Pendulum: From End of the World to Market Melt-Up?

    CLICK HERE to download Cove Street Capital’s January 2014 Strategy Letter, Number 15, “The Fear Pendulum: From End of the World to Market Melt-Up?”

  • 16th Dec 13

    The Soft Stuff

    Every December, the Cove Street Capital team spends both time and money on behalf of a charity. This year we spent an afternoon at the Alexandria House, a transitional residence providing safe and supportive housing for women and children in the process of moving from an emergency shelter to permanent...

  • 31st Oct 13

    CSC Strategy Letter | Number 14 | Steve Jobs Didn’t Give a *!@% About the Debt Ceiling

    CLICK HERE to download Cove Street Capital’s October 2013 Strategy Letter, Number 14, “Steve Jobs Didn’t Give a *!@% About the Debt Ceiling”

  • 19th Aug 13

    CSC Strategy Letter | Number 13 |Who Are You Going to Believe—These Non-GAAP Numbers or Your Lying Eyes?

    CLICK HERE to download Cove Street Capital’s August 2013 Strategy Letter, Number 13, “Who Are You Going to Believe—These Non-GAAP Numbers or Your Lying Eyes?”

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    2nd Jul 13

    Holiday Reading – Dundee Annual Report

    I am not sure I am 100% in alignment with “Gold is the Answer” but this ramble is worth reading on a number of fronts from a guy who has put up a terrific record and doesn’t get a lot of play south of the border.   CLICK HERE...

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    11th Jun 13

    Attention Almost Every Public Company with an A/B Ownership Structure: How to Create 35% More Shareholder Value in a Single Day and Set a Course for Further Gains

    (Reprint) RICHMOND, Va., June 6, 2013 /PRNewswire/ — Media General, Inc. (NYSE: MEG) and privately held New Young Broadcasting Holding Co., Inc., both local broadcast television and digital media companies, today announced a definitive agreement to combine the two companies in an all-stock merger transaction. The new company will...

  • 5th Jun 13

    CSC Strategy Letter | Number 12 | Harleys and Leather Jackets

    CLICK HERE to download Cove Street Capital’s May 2013 Strategy Letter, Number 12, “Harleys and Leather Jackets”

  • 29th May 13

    The Efficient Market Paradox

    by Eugene Robin  |  Research Analyst, Cove Street Capital I’d like to share with you a great book on the basic mathematics of the stock market written by John Allen Paulos that has a section on the efficient market. Briefly, if investors believe in the Efficient Market Hypothesis (EMT) then...

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    13th May 13

    The Annual Pilgrimage to Omaha

    Berkshire This past weekend’s trek to Omaha for the Berkshire Hathaway annual meeting represented the fifth consecutive time I have ventured to see the Oracle of Omaha and the man they call Charlie share their wisdom. Sorry folks, I didn’t take notes from the meeting this year. I have...

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    23rd Apr 13

    Tessera: Our Vote is In

    Our premise is simple: we bought Tessera because the stock was cheap and we received nearly free optionality on either the development of a new technology or improvement in the managing of the core business.  In a very short period of time, the management team members proved themselves to...

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    18th Apr 13

    Ben Claremon and the Great White North

    Under normal circumstances, the prospect of leaving sunny Southern California to travel to a place where the day-time temperature encourages the wearing of fur is not particularly appealing. But I decided this year to make the slog to attend Fairfax Financial’s annual meeting in Toronto. Prem Watsa, the Chairman...

  • 26th Mar 13

    CSC Strategy Letter | Number 11 | Call Him Ishmael

    CLICK HERE to download Cove Street Capital’s March 2013 Strategy Letter, Number 11, “Call Him Ishmael”

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    18th Mar 13

    Proxy Season and the Unusually Juicy Soap Opera at Tessera

    We own Tessera at a cost of approximately $16 per share. Our thought process was simple: a conservative analysis of their IP portfolio’s current cash stream plus cash on the balance sheet suggested a valuation of $15 per share, leaving $1 of implied value for the venture portfolio of...

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    20th Feb 13

    Hello Ruby Tuesday

    A few weeks ago, Cove Street was asked to present a small cap stock idea for the 2013 Small-Cap Investing Summit. Our analyst Ben Claremon chose to discuss the investment thesis for Ruby Tuesday (RT) and created the attached presentation. Despite the fact that Ben was unfortunately not allotted the...

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    11th Feb 13

    The Worst Piece of Corporate BS

    The proposed management buyout of Dell is an abomination of corporate governance and decency on an extraordinarily large scale. While we have been too busy losing money in Hewlett-Packard to own Dell shares, I will take the liberty of being incensed for its shareholders. To wit: ANY management-led buyout...

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    31st Jan 13

    CSC Strategy Letter | Number 10 | The Lost Decade…Found?

    CLICK HERE to download Cove Street Capital’s January 2013 Strategy Letter, Number 10, “The Lost Decade…Found?”

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    15th Jan 13

    What Were We Thinking—Central Garden and Pet

    Central Garden and Pet (CENTA) has been in and out of the portfolio several times over the last eleven years with results varying from stunning (a 6-bagger from the 2002 lows) to a lot less than that (repurchased the stock at $11 and bought it all the way down...

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    7th Jan 13

    The Nonsense Math Effect

    Please insert the phrases “money manager,” “hedge fund,” “large pension plan,” and “underperformance” at will throughout this piece.  The Nonsense Math Effect  Mathematics is a fundamental tool of research. Although potentially applicable in every discipline, the amount of training in mathematics that students typically receive varies greatly between different...

  • 30th Nov 12

    Our Roots For Sale

    Warren Buffett: Former Executive Offices – 97 Cove St, New Bedford MA 02744

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    27th Nov 12

    CSC Strategy Letter | Number 9 | Idiosyncratic Risk…and the Other Kind

    CLICK HERE to download Cove Street Capital’s November Strategy Letter, Number 9, “Idiosyncratic Risk…and the Other Kind”

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    20th Nov 12

    Increasingly Obvious Unintended Consequences

    While we prefer not to opine in a macro-economic sense on most occasions, THIS PIECE sourced from Grant’s, nicely sums up thoughts expressed in a number of our strategy letters. Artificially depressed interest rates are killing us.

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    15th Nov 12

    Jefferies: Possible Postscript

    Funny things often happen on the way to the bank. It is also fair to say that sometimes you never reach the bank, or you end up taking a cab when you thought you were walking. Where this fits with our investment in Jefferies (JEF) remains somewhat unclear, but...

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    30th Oct 12

    Well Worn and Well Worth Re-reading

    We have embarked on a longer term project to digitize about 6 yards and 28 years of collected investment “literature.” Because this is the age of social media, we will share the more timeless pieces. Pardon their appearance. Click here to download the first.

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    23rd Oct 12
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    19th Oct 12
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    3rd Oct 12

    What is Really is Wrong with This Country and the Economy?

    Please read this and try not to weep. Let me see if I understand this correctly. The President of the United States gathers together a task force of government lawyers in order to coordinate the ability to sue private companies? Their first effort is to sue JP Morgan for...

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    17th Sep 12

    Other People’s Thoughts – Jim Bianco of Bianco Research

    As someone who does not watch CNBC unless I’m away from the office and utterly trapped in a small hotel room that only offers 5 stations and is located in a remote region of the country, I wasn’t aware that Jim Bianco was such a talking head. Despite this...

  • 10th Sep 12

    Strategy Letter | Number 8 | You Didn’t Build This Rally

    CLICK HERE to download Cove Street Capital’s September Strategy Letter, Number 8, “You Didn’t Build This Rally”

  • 22nd Aug 12

    Cove Street Capital Calling

    Despite twenty-eight years in the investment management industry and the natural cynicism that comes with experience, I nonetheless retain the ability to be amazed at what can pass for normalcy in the full light of day. Case in point is Avon Products, a company that has a very clear...

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    14th Aug 12

    Summer Reading Continued

    The fault, dear Brutus, is not in our stars, but in ourselves… The latest in a long line of thought provoking pieces by investment consultant guru Charles Ellis about what ails the “business” of investment management and the propensity for all actors—clients, consultants and the managers—to be their own worst enemies in...

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    6th Aug 12

    Munger Reprise

    I sometimes have a dim realization that I need the same intellectual lessons pounded into me over different time periods in order to avoid the regular and robust temptation to do something stupid.  We will be regularly posting pieces on “thinking” that have come our way over the decades....

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    24th Jul 12

    Now About that Factory Tour…

    Following last week’s Fender post: Why Fender Pulled Its IPO

  • 16th Jul 12

    Buy a Used Guitar, Not the Stock

    In my analytical career, there is a laundry list of things I have studied for investment purposes, including such topics as life insurance, cement, pet products, pension accounting, high speed disc couplings, polymers, mattresses and urea. So it has only been with undisguised glee that I have welcomed the...

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    28th Jun 12

    Summer Reading

    Good investing is  a continuous evaluation of business characteristics, valuation and judgement about the people running the show. Valuation is math and perseverance. The changing natures of business models and the wonder and flaws of people are shifting sands requiring induction, analogy, judgement and insight. Some people think and...

  • 25th Jun 12

    Strategy Letter | Number 7 | Volcker Does Not Rule

    CLICK HERE to download Cove Street Capital’s June Strategy Letter, Number 7, “Volcker Does Not Rule”

  • 8th Jun 12

    The Next Generation: An Interview with Ben Claremon & Eugene Robin

    CSC research analysts and blog contributors Ben Claremon and Eugene Robin were recently interviewed for The Wall Street Transcript. CLICK HERE to download the article.  

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    8th Jun 12

    What We See Versus What We Infer

    CLICK HERE to download a superbly interesting thought process that is eminently applicable to investment management, and it can be argued that i have seen balance sheets that look worse than some of the included slides. – Jeffrey Bronchick, CFA | CSC Chief Investment Officer

  • 8th Jun 12

    A Brief Presentation by Our CIO

    Our CIO Jeff Bronchick gave a presentation at the Emerging Managers Summit in Chicago. CLICK HERE to download the slides.

  • 7th May 12

    CSC Strategy Letter | Number 6 | Lots to Fear or Fear Itself?

    Click HERE to download Cove Street Capital’s March Strategy Letter, Number 6, “Lots to Fear or Fear Itself?”

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    7th May 12

    Inoculation 2012: The Berkshire Hathaway Meeting

     Dear Value Investors, This was my fourth trip to the so-called Woodstock for Value Investors and my latest attempt to capture the majority of the comments made by Warren Buffett and Charlie Munger. Over that time, what hasn’t materially changed is the amusing back and forth between Charlie...

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    23rd Apr 12

    More Things That Don’t Change Over Time

    THIS (Keynes the Stock Market Inventor) is a pretty interesting piece that was partially excerpted in the Wall Street Journal several weeks ago, but being gluttons for punishment, we had to read the original tract. We would note the following and only modestly self-serving points: 1. A 22 year record...

  • 13th Apr 12

    The Active Management Pretend Game

    by Eugene Robin  |  Research Analyst, Cove Street Capital Let us start by saying that this is not an essay on whether or not a large pool of institutional asset allocators should consider an indexing strategy or not. What follows is an analysis of the question: “If you are going...

  • 26th Mar 12

    CSC Strategy Letter | Number 5 | Caviar for the General

    Click HERE  to download Cove Street Capital’s March Strategy Letter, Number 5, “Caviar for the General.”

  • 19th Mar 12

    Everything Turns Grey: Chesapeake

    by Eugene Robin  |  Research Analyst, Cove Street Capital   The title of this blog post borrows a line from an Agent Orange song that I loved listening to when I was growing up. I think it encapsulates the argument currently taking place between the environmentalists in this country and...

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    22nd Feb 12

    Portable Nonsense

    While this is a wonderfully snarky clip from the Economist, if I were paying “2 and 20” I am not sure I would think it’s so funny. It also seems to be a decent plug for Cove Street Capital Strategic Value – an absolute return, fee-based separate account. Go...

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    15th Feb 12

    So We Get Questions

    Q. Should we be concerned that you have a small investment team? How can you cover hundreds of stocks? Won’t you miss things? A. No, we don’t need to and of course. We run a concentrated portfolio that strives for low turnover. Classic behavioral finance and my personal practical...

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    14th Feb 12

    Notes from the Front Line: UCLA

    The opinions expressed herein are not those of Cove Street Capital. The post was written by Ben Claremon, an employee of CSC, and includes his summaries of speeches given at a recent UCLA Anderson Investment Association Conference. You should not consider this information a recommendation to buy or sell any...

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    3rd Feb 12

    In Support the of Home Team

    by Ben Claremon It was less than two years ago that I was sitting with some of my UCLA Anderson classmates, desperately trying to figure out what to do for our Applied Management Research or AMR project. Most students fulfill this requirement by completing a consulting project for a...

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    23rd Jan 12

    What We Are Thinking: Approach Resources

    by Eugene Robin Approach Resources, Incorporated (AREX: NASDAQ) is an independent oil and gas exploration company located in west Texas. As a spinout from energy private equity firm Yorktown Partners, Approach situated itself on land that was, at the time, a natural gas play on what was known as...

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    23rd Jan 12

    A Plea for Higher Interest Rates

    What’s great about Jim writing for the unwashed minority (those who toil in official positions in Washington) is that you can re-link and comment without running into the Wrath of Grant’s for violating his confidence as a paid-up subscriber. Our point here is that he is echoing our current belief...

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    12th Jan 12

    The Ongoing Tyranny of the Growth vs. Value Argument

    Co-written by Jeffrey Bronchick & Ben Claremon A recent article in the Wall Street Journal—from which we lifted the chart below—once again highlights the never-ending debate about the merits of growth versus value, a discussion that inevitably forces an investment manager to self-reflect. What kind of stocks am I...

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    29th Dec 11

    Warren and Ben


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    20th Dec 11

    Trying This at Home

    We reprint with permission a recent email from a sell-side colleague who we hold in high regard, despite his familiarity with the institutional investment consulting industry (laugh here). Like any number of experienced investment people, he has seen a lot of what passes for money management and thus he...

  • 16th Dec 11

    CSC Strategy Letter | Number 4 | ‘Tis the Season I Doubt You Will Remember

    Click HERE  to download Cove Street Capital’s December Strategy Letter, Number 4, “Tis the Season I Doubt You Will Remember.”

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    12th Dec 11

    Found: The Lost Decade

    Even if you repeat it enough, it doesn’t make it true. Unless you are burdened with a few hundred billion to manage, you do NOT have to invest in a market capitalization weighted index which, by mathematical design, is moving you toward more expensive stocks.

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    21st Nov 11

    Explaining Ourselves: Jefferies

    So, we have very recently been a buyer of Jefferies (JEF: NYSE) stock, which anyone following the financial headlines would know has been pummeled in recent months. It was during this evisceration that we took our initial position…and then bought more to establish an average cost of $12 per...

  • 15th Nov 11

    CSC Strategy Letter | Number 3 | Occupy Yahoo

    Click HERE to download Cove Street Capital’s November Strategy Letter, Number 3, “Occupy Yahoo.”

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    4th Nov 11

    Earnings Per Share Myopia

    By Ben Claremon Welcome to earnings season and the barrage of company press releases and conference calls. Securities analysts all over the country currently have their noses buried in 8-K’s and 10-Q’s, hoping to get a sense of company-specific and industry trends.  After personally reading through the transcripts of...

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    19th Oct 11

    Terrific Value – Long Road

    SEI Investments _________________________________________________ The opinions expressed herein are those of Cove Street Capital are subject to change without notice. Past performance is not a guarantee or indicator of future results. You should not consider the information in this blog a recommendation to buy or sell any particular security. These...

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    17th Oct 11
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    10th Oct 11

    Interpreting Performance Attribution

    Old Ideas that Require Repeating in Regard to Hiring a Money Manager

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    6th Oct 11

    In Memory of Steve Jobs

    This is a prepared text of the Commencement address delivered by Steve Jobs, CEO of Apple Computer and of Pixar Animation Studios, on June 12, 2005. Reprinted from the Stanford Report. I am honored to be with you today at your commencement from one of the finest universities in...

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    4th Oct 11

    The VIX World of Difference

    The VIX is the Chicago Board of Options (CBOE) Volatility Index and regardless of what it was intended to do, what it does do is offer a measure of investor fear and loathing. The higher the number, the more the investor is freaking out over any number of today’s...

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    4th Oct 11

    In a Zero Hedge World, Investors Must Stay Nimble

    by Ben Claremon All European banks are insolvent! Germany is going to leave the Euro! The US is going to default on its debt obligations! Any investor who has spent time trolling the internet—especially the blogosphere—or listening to talking heads on TV has likely been exposed to similar alarmist...

  • 26th Sep 11

    Data Mining: The Gift and the Curse

    by Eugene Robin Reading over some of the “doomsday” commentary in the financial blogosphere, it sometimes appears as if graphs posted by some of the authors are poignant and relevant to the here and now. As the above graph indicates (presented as a reprint from Societe General’s Research via...

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    8th Sep 11

    Do I Detect a Hint of Optimism?

    To counter the rumor that I am incapable of ceding the pen, I present Ben Claremon, Cove Street analyst, aka The Inoculated Investor.  – Jeffrey Bronchick, CFA   ——Do I Detect a Hint of Optimism?————————————————————– By Ben Claremon I am a skeptic by nature. In addition to that component...

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    31st Aug 11

    CSC Strategy Letter | Number 2 | The Slow Investment Movement

    Click here to download Cove Street Capital’s August Strategy Letter, Number 2 “The Slow Investment Movement.”

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    26th Aug 11

    Atlas Shrugged

    Federal Reserve Chairman Ben Bernanke’s speech in Jackson Hole today was notable for what it did not contain—a big silly and asset levitating QE3 program—although he did leave that possibility open: “In addition to refining our forward guidance, the Federal Reserve has a range of tools that could be...

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    18th Aug 11

    But This CEO Goes to 11

    Many things can aggravate an investor in a very cheap stock. This one is particularly irking. Leo Apotheker, the “9 month old” CEO of Hewlett Packard, for reasons unbeknownst to those rationally running public companies, participated in the following dialogue with Sanford Bernstein analyst Tom Sacconagi on June 2,...

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    15th Aug 11

    The World’s Richest Hypocrite

    It seems hard to reconcile this piece by Warren Buffett with the fact that he is engaged in possibly the largest tax-free transfer of wealth in the history of modern mankind.

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    27th Jul 11

    The Simple Life of Cash

    It does take some creativity and high IQ for many to justify “2 & 20.” I also think a Mrs. Montier might insist on a better picture.  Click here to read more.

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    19th Jul 11

    Steve Wynn Leading the Charge

    How rare is it for a visible corporate leader to speak publicly on anything but their latest green initiative? ——July 2011 Conference Call————————————————————————- I believe in Las Vegas. I think its best days are ahead of it. But I’m afraid to do anything in the current political environment in...

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    18th Jul 11

    Another priceless quote coming out of the European Crisis

    “If the European Union could monetise the value of the credibility it has destroyed it would be the richest organisation on earth,” said one major credit manager. From The Telegraph

  • 15th Jul 11
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    15th Jul 11

    It’s OK for Us to Quote Bond Managers

    To the best of my knowledge, Van Hoisington and Lacy Hunt have been long 30 year Treasury strips since I started in this business in 1984 and the record has been ridiculously good in a cheerily volatile way. This is a clean, simple and even possibly accurate assessment with...

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    15th Jul 11

    The Crowd Around Rising Rates

    Bianco Research Comment: “Since December 2002 Bloomberg has conducted 99 monthly surveys. Of these, an incredible 95 surveys (96%) have forecasted higher rates. To repeat, only four times since 2002 (4%) have economists been forecasting lower rates. Those instances are highlighted in red. Even these bullish forecasts can be...

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    7th Jul 11

    CSC Strategy Letter | Number 1

    Click Here to download Cove Street Capital’s first Investment Strategy Letter, Number 1.

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    5th Jul 11

    European Spade Work

    The Cove Street Team remains confident we will see a European Vacation at an acceptable exchange rate. A nice paid clip from the FT:  ——S&P: Calling a Spade a Spade——————————————————————- Be careful what you wish for. Those European politicians who cheerfully criticised rating agencies for falling under the influence...

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    14th Jun 11

    Yahoo and Jack Ma

    Only somewhat facetiously, I wonder out-loud why Jack Ma was not arrested at the US border last week when he spoke at The Wall Street Journal’s All Things Digital Conference. On a massive and very public scale, he is conveying a sense of the conceptual lawlessness of mainland Chinese...

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    8th Jun 11

    Thank you Mr. Dimon

    At what was surely a suave gathering of banking officials in Atlanta on June 7th, this exchange was noted between Morgan’s Jaime Dimon and Fed Chief Ben Bernanke. The answer should scare you. Mr. Dimon: Y’know, I have this, totally, I completely agree that we had a crisis and...

The opinions expressed herein are those of Cove Street Capital and are subject to change without notice. Past performance is not a guarantee or indicator of future results. You should not consider the information in this blog a recommendation to buy or sell any particular security. These securities may not be in your account by the time you receive this report, or may have been repurchased for your account. You should not assume that any of the securities discussed in this report are or will be profitable, or that recommendations we make in the future will be profitable or equal the performance of the securities listed in this report. Recommendations made for the last twelve months are available upon request. Cove Street Capital is an investment advisor registered with the Securities and Exchange Commission. Consider the investment objectives, risks, and expenses before investing.