Tuesday, December 30, 2014

People Don't Learn Enough From History

I love this story from one of my favourite books, Why Nations Fail:

Elizabeth I (1558-1603) had recently issued a ruling that her people should always wear a knitted cap. Lee recorded that "knitters were the only means of producing such garments but it took so long to finish the article. I began to think. I watched my mother and my sisters sitting in the evening twilight plying their needles. If garments were made by two needles and one line of thread, why not several needles to take up the thread."

Monday, December 29, 2014

Hammond Grows Out Of Value

Almost two years ago, Hammond Manufacturing was brought up on this site as a potential stock idea. I recently sold out of the stock as the company's shares have almost doubled, while management has decided to embark on a substantial capacity expansion plan.

Wednesday, December 24, 2014

The Focused Few

My portfolio is fairly diversified. It's not that I don't understand the theory behind concentrated investing, I just don't have the confidence that I can tell the difference between a great and a good idea, and so I spread the eggs around. But I hope to get there someday. In The Focused Few, Richard Rockwood offers a few ideas on getting there.

Saturday, December 20, 2014

Aberdeen Catalyst Now In Full View

A few months ago I talked about how Aberdeen International was just begging for an activist investor. That activist appears to have arrived. A special meeting to overthrow the board has been requisitioned, and so I have bought some shares. I posted my thoughts at Seeking Alpha.

Tuesday, December 16, 2014

The Goal

I don't re-read books very often, so when I do it's because I really appreciated it the first time. I recently re-read The Goal and loved it all over again.

Friday, December 12, 2014

The Shareholder Value Myth

James Montier wrote an interesting paper about how chasing shareholder value as a firm's number one priority is a terrible idea. The paper didn't make any convincing arguments to me, as Montier both made misleading statements and tried to establish causes and effects between things with complicated relationships. Here were my issues with the paper:

Wednesday, December 10, 2014


There are a lot of reasons to hate Antifragile: the author comes across as arrogant, is verbose and uses obscure vocabulary, and goes out of his way to repeatedly insult large segments of the population. Nevertheless, I think the book is a useful read in that it helps the reader think about and understand a very useful mental model.

Thursday, December 4, 2014

Dover Downs is an Asymmetric Wager

The gaming industry in Delaware has been under severe strain for a number of years. The state government increased taxes on gaming companies to cope with budget shortfalls that ballooned as a result of the financial crisis. Meanwhile, neighboring states removed gaming license restrictions to increase their revenues, resulting in increased competition for Delaware casinos, the largest of which is Dover Downs Entertainment (NYSE:DDE).

The resulting declines in revenues and profits at Dover Downs have led to an extraordinary reduction in market value. The stock is down 90% from its 2009 highs, as casinos with fewer regulatory fees in neighboring states continue to open and eat into Dover's market share.

However, the stock is so beaten down that the company is now a bargain.Read more...

Monday, December 1, 2014


One of the founders of the web company Basecamp gives us his views on how to start and run a company in his book, Rework. I can't say I got a whole lot out of this book, but that's only because I already agreed with almost everything in it.