Artio Shows You The Assets

Four short months ago, Artio was discussed on this site as a potential value investment. As the stock continued to fall, three short months ago I tweeted the following:

"Cash-flow positive money-manager Artio now trades for LESS than its net cash and investments"

One short day ago, Artio accepted an offer to be bought out for almost 15% more than its book value, which is about 50% higher than where it was trading at the time of the tweet. This was a kind of situation from which only a value investor could make money, thus offering a few lessons.

The Box

Levinson's The Box is a thorough guide to the history of the shipping container. You might think this would make for extremely dry reading,

Experiments Leading To Profits

"On the subject of economies of scale, I find chain stores quite interesting. Just think about it...You get a whole bunch of little laboratories out there in which you can conduct experiments" - Charlie Munger

Certain former market darlings are having a rough go of it these days. Though Mr. Market's mood has turned decidedly positive over the last 3 months, certain retailers remain mired at cyclical lows. The market has all but written off some of the country's largest electronics retailers, as they have seen declining sales and profits as a seemingly non-profit competitor continues to expand its reach.

But Mr. Market's outlook may be grossly wrong, having under-estimated the advantages some of these companies have combined with ROIC mean reversion. Now that the industry faces challenges, you are likely to see some of these advantages come to light once again.

TAT Technologies Rises

Stocks trading at discounts to their intrinsic values are harder to come by nowadays, but stocks rising towards their intrinsic values are more easily found. One example is TAT Technologies (TATT), which has traded at a discount to its net current assets for the better part of the last 5 years. TAT has been discussed on this site many times, most recently about 4 months ago. Since then, the stock is up more than 65%.

The Signal And The Noise

Nate Silver made headlines when he famously out-predicted much of the field during the recent Presidential race; he accurately predicted the outcome in all fifty states. But the truth is, it wasn't the first time he made headlines with successful forecasts.

While value investors know not to rely on forecasts (as discussed many times on this site), Silver has made a career out of it. In his book, The Signal and The Noise, he discusses the challenges facing forecasters and the ways in which forecasting can be improved.

Chaos Or Orderly?

Chaos Theory by Robert Murphy really tests the limits of how open your mind is. The book forces the reader to think outside the box that is the years of conditioning that have shaped our beliefs in the necessity of organized government.

Apple As The New RIM

As former market darling Apple (AAPL) has seen its stock price continue to fall, it has increasingly piqued the interest of value investors. At a market cap of $450 billion and twelve-month earnings of over $40 billion, Apple's P/E is barely over 10. Considering the company has no debt and cash equivalents of almost $140 billion, the valuation appears very compelling indeed.