No coffee can stock to suggest, BUT just wanted to say I really appreciate all of your articles. Well written and researched, and a breath of fresh air in the financial investment world. Please keep doing what your doing!
Great article as per usual! Never really thought of my approach as being pseudo-coffee can but there're similarities for sure given I'm a long-term investor and usually try to adjust my allocation based on my stronger performers over time, and minimize exiting positions that may have been poorer choices in hindsight, wherever possible.
I think it may be worth mentioning the coffee can approach applies to more than just individual stock picks and obviously applies to ETF and fund choices as well!
Bot Pershing Square back in mid-October, under $30. On that date I could buy it at a 37% discount to NAV. It is currently at a 33% discount to NAV. Bill Ackman has an excellent long term track record with the notable exception of his "activist" period where he tried to take down Herbalife. This is key because prior to this period, the shares traded for a single digit discount to NAV. Investors have long memories and since losing a billion dollars on the Herbalife trade, the shares have traded for the huge discount to NAV we see now.
Will the discount narrow? likely, some day. Positive factors to move that along. Currently, Pershing is backing back their stock at a rate of 12% of shares outstanding per annum. Secondly, 30% of Pershing shares are held by Pershing Square management and employees. Thirdly, Ackman has repeated publicly serval years in recent years that he has no intention to take on an activist short position in the future.
In the meantime, Pershing is holding a limited number of companies with outstanding fundamentals. NAV has increased since mid-October from $45 to over $52.
$NVCR Coffee can the technology/space/modality. First few companies, later on major disruptors. $1 trillion net profit annually attainable by company with largest market share. Give the technology/space/modality whatever you need to in order to understand it. Oversimplification and satisficing truly are the enemy with this one. There are only two ways you'll be able to let this run under allocation, or conviction. Confirmation bias won't be enough. Do the work required to cultivate and maintain conviction. It's early in the adoption curve so you can DCA you're way up as the evidence rolls in and you're conviction develops. Ignore the cycles focus on the long term trend. It will be a bumpy ride! Exit when it makes sense for you. This technology will die a very long drawn out death, unless adoption is very long and drawn out...
Williams Sonoma #WSM - Dividend achiever. High dividend growth, ROI, ROE. Good sales growth record, margins and low debt. Currently has a great margin of safety.
My Coffee can pick would be Microsoft. Extremely good margins, high ROIC, great management and sticky b2b customers.
What a bet from Buffet on Amex back in the days, I had no idea, crazy!
No coffee can stock to suggest, BUT just wanted to say I really appreciate all of your articles. Well written and researched, and a breath of fresh air in the financial investment world. Please keep doing what your doing!
My coffee can is and will continue to include AAPL and BRK
Mastercard
Microsoft or Chevron
Great article as per usual! Never really thought of my approach as being pseudo-coffee can but there're similarities for sure given I'm a long-term investor and usually try to adjust my allocation based on my stronger performers over time, and minimize exiting positions that may have been poorer choices in hindsight, wherever possible.
I think it may be worth mentioning the coffee can approach applies to more than just individual stock picks and obviously applies to ETF and fund choices as well!
You might enjoy our post from this morning.
https://finiche.substack.com/p/the-big-portfolio-refresh
Bot Pershing Square back in mid-October, under $30. On that date I could buy it at a 37% discount to NAV. It is currently at a 33% discount to NAV. Bill Ackman has an excellent long term track record with the notable exception of his "activist" period where he tried to take down Herbalife. This is key because prior to this period, the shares traded for a single digit discount to NAV. Investors have long memories and since losing a billion dollars on the Herbalife trade, the shares have traded for the huge discount to NAV we see now.
Will the discount narrow? likely, some day. Positive factors to move that along. Currently, Pershing is backing back their stock at a rate of 12% of shares outstanding per annum. Secondly, 30% of Pershing shares are held by Pershing Square management and employees. Thirdly, Ackman has repeated publicly serval years in recent years that he has no intention to take on an activist short position in the future.
In the meantime, Pershing is holding a limited number of companies with outstanding fundamentals. NAV has increased since mid-October from $45 to over $52.
This is my coffee can investment.
Thanks a lot for your always super interesting letter !
2 suggestions :
- explain your method while you're doing your research
- use "crowd intelligence" to find the best stocks to add (always surprising how crowds can as a whole find the best decision to make)
Following your logic of "Charlie Munger puts its best." I'd follow him into Costco!
Check out Medtronic. Deep dive it.
My coffee can would be TCS
$NVCR Coffee can the technology/space/modality. First few companies, later on major disruptors. $1 trillion net profit annually attainable by company with largest market share. Give the technology/space/modality whatever you need to in order to understand it. Oversimplification and satisficing truly are the enemy with this one. There are only two ways you'll be able to let this run under allocation, or conviction. Confirmation bias won't be enough. Do the work required to cultivate and maintain conviction. It's early in the adoption curve so you can DCA you're way up as the evidence rolls in and you're conviction develops. Ignore the cycles focus on the long term trend. It will be a bumpy ride! Exit when it makes sense for you. This technology will die a very long drawn out death, unless adoption is very long and drawn out...
Walmart.
Williams Sonoma #WSM - Dividend achiever. High dividend growth, ROI, ROE. Good sales growth record, margins and low debt. Currently has a great margin of safety.