tag:blogger.com,1999:blog-7294165939647321702.post7959321826953071361..comments2024-03-28T13:45:43.362-04:00Comments on <center><a href="http://www.barelkarsan.com">Barel Karsan - Value Investing</a></center>: Value Fail: SuperValuSaj Karsanhttp://www.blogger.com/profile/04493152766022812984noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-7294165939647321702.post-16089980908938677512013-03-11T18:56:28.591-04:002013-03-11T18:56:28.591-04:00Hi Anon,
I definitely want to apply lessons from ...Hi Anon,<br /><br />I definitely want to apply lessons from this to future investments, but I'm not sure Best Buy and Staples are the best comparisons. Other than being in retail, where they of course suffer from some of the same industry dynamics including low customer switching costs and high fixed costs, I think there are major differences. <br /><br />BBY and SPLS (especially the latter with its delivery business) have strong market positions thanks to economies of scale (in distribution, marketing etc) that I don't think SVU had relative to its peers. They also don't have the same scale of debt obligations that SVU had.<br /><br />I think a better comparison for SVU might be to JC Penney. That's not to say JCP can't turn things around, but I'd be wary of getting involved in a situation like that myself.<br /><br />Of course, I could be blindly overestimating BBY and SPLS and underestimating JCP thanks to confirmation bias (I own the first two and not the 3rd), so take all of this with a grain of salt!Saj Karsanhttps://www.blogger.com/profile/04493152766022812984noreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-52158507457280252022013-03-10T15:45:38.737-04:002013-03-10T15:45:38.737-04:00Frank, I wondered where you had been!? Very eager ...Frank, I wondered where you had been!? Very eager to here about your new start up. hardcorevaluenoreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-77037529030315235602013-03-09T03:46:33.819-05:002013-03-09T03:46:33.819-05:00Big Fan,
Saj passed along your comment. I stepped...Big Fan,<br /><br />Saj passed along your comment. I stepped away from daily postings because I am working on a startup idea and I haven't had the time to work on both. Progress has been steady and I hope to have something to announce shortly. <br /><br />Stay tuned!<br />Frank VoisinFrankhttps://www.blogger.com/profile/07035193725717367189noreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-22464391873731616202013-03-08T12:25:28.436-05:002013-03-08T12:25:28.436-05:00Excellent ex post analysis and a valiant exit on S...Excellent ex post analysis and a valiant exit on Supervalu. <br /><br />After your initial posting (and FrankVoisin.com's complementary analysis), I considered SuperValu as well. However, I could not identify sufficient mitigating factors to overcome my concerns on (1) the absence of an enduring economic moat, and (2) a debt load that could distract or limit management's ability to focus on long term investments (as you mention, regarding store upgrades and other factors to attract customers and raise profits in the long term). <br /><br />Regarding LBO-type capital structures (in your earlier post), I recognize the disciplining effect and role of debt in reducing agency costs. However, a high debt load, for public firms subject to quarterly scrutiny, can become a barrier to long-term planning, particularly within competitive environments for which a significant and uncertain lag exists between investments (e.g. store upgrades) and increased profit margins (e.g. winning over more profitable customers). Thoughts? <br /><br />Do you think there is an insight, perhaps on industry dynamics, in your ex post analysis of Supervalu that might bring a new perspective to your earlier investment analysis on Staples or Bestbuy? <br /><br />Here, I'm thinking of Fisher's writing that "[losses] should always be reviewed with care so that a lesson is learned from each of them". As your blog posts seem to have this quote at heart, your thoughts on practically applying this to your earlier investment analysis would be quite valuable. <br /><br />Anyways, big fan of your website. You're building something great here and I hope you keep it up. <br /><br />Cheers, <br />Big Fan<br /><br />P.S. Do you know why your colleague at FrankVoisin.com isn't posting much these days? You both seem to have stepped away from daily postings, although Frank to a much greater extent.Anonymousnoreply@blogger.com