Category : The Business of Money Management

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 are a Tops Down investor? I didn’t think so. Please assist us in stamping this out.

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 growth versus “short-termism.” Shareholder (Steve Bush): Well, thank you for taking my call. CEO Edward J. Richardson: Hi, good morning Steve. Shareholder: I guess, I’d follow-up with the last caller and […]

Capital Allocation 101

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

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 of Disaster   Dear fellow shareholders, Wynnefield Capital is an investment management firm focused on an equity small-cap value special situations strategy that practices constructive activism. The firm was founded by […]

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 problem. Focusing solely on the asset part of the equation leaves one susceptible to the problems NY—among many others—is facing. The sad fact is that the liability side is where the […]

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, with storage in the US looking like it’s about to hit escape velocity (see below), short term price pressures will continue as long as the supply overhang exists. While refiners will […]

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 Loomis (or Warren Buffett)—be clear, be honest, and admit when you have made a mistake. This press release could be its polar opposite. When viewed in the context of a CEO […]

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 who own 20,000 shares asking for Board seats, there has been a proliferation of “activist” activity. Some of this is good, some of this is bad as Wall Street is just […]

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

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 Maffei and Mark Carleton, has clearly been an adult influence on what was truly a cacophonic beginning for LYV. While Greg Maffei gets some very mixed reactions in some circles, we […]