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Category : Weblog

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, […]

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

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

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 […]

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 […]

Confessions

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 […]

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. […]

Send Your Kids to Bowdoin?

Download a recent speech by noted Soros “sidekick” Stanley Druckenmiller

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 […]

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 […]

Forestar

Download a press release from Forestar Group Inc. (Ticker: FOR)

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 […]

Coherent and Consistent

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

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 […]

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.

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

Download Cove Street Capital’s January 2015 Strategy Letter Number 19, “The Great Complacency…Continued”

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 […]

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.

What a Phony, Part II

Read Part I: “The Worst Piece of Corporate BS,” 02/11/2013 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. What is clear in most […]

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

“The hipster effect: When anticonformists all look the same” by Jonathan Touboul

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.

CSC Strategy Letter | Number 18 | Metastability?

Download Cove Street Capital’s September 2014 Strategy Letter Number 18, “Metastability”

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 […]

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 […]

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 […]

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 […]

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

Download Cove Street Capital’s July 2014 Strategy Letter Number 17, “Hockey is Nothing Like Investing”

Very Scary

Our takeaway on Janet Yellen’s 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 […]

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 […]

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

by Jeffrey 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 […]

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 […]