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Cosas interesantes de inversion de bolsa, fondos..

Cuidado con el EBITDA

LaVueltaAlGrfico - Mié, 10/04/2017 - 08:34
Dentro de la valoración de compañías hay diversas formas de llegar al valor intrínseco, una de las magnitudes más utilizadas sin duda es el llamado EBITDA, por su siglas en inglés (Earnings before interest taxes amortization and depreciation), en resumen ingresos menos gastos. Siempre he utilizado esta magnitud con cierta prudencia y por ello me gustaría en este post hablar sobre ello.

Find What You Do - Mar, 10/03/2017 - 12:41
On Finding Your Purpose and the Beauty in InvestingPhoto: Pixabay

Mark Zuckerberg was once asked what he thought of The Social Network, the film that tells the beginnings of Facebook. Mark laughed and said he was amazed at how many little things the filmmakers got perfectly right, while also getting the major plot points completely wrong. For example, Mark recalled how every piece of clothing in the film was an exact replica of clothing he actually owned, yet his motivation for starting Facebook had nothing to do with chasing a girl. For the record, Mark met his current wife Priscilla before he started FB. Mark elaborates on this point (emphasis mine):

They frame it as if the whole reason for making Facebook and building something was because I wanted to get girls or because I wanted to get into some kind of social institution…They just can’t wrap their head around the idea that someone might build something because they like building things.

I like this quote because it embodies Mark and everything he stands for. He builds things with computers. That is what he does. He did it at Harvard and he did it at Facebook. Everyday he continues to build the largest community in human history with the help of dedicated employees, lines of computer code, and large metal servers. But, I’m not here to talk about Facebook or Mark Zuckerberg.

I am here to ask YOU to find what you do. This isn’t an easy task, and it may take years before you find it, but I promise that it is out there. And no I don’t want you to think of this as solely “finding your passion.” That phrase, which I have used many times previously, is so overused that the “passion” feels all but extinguished at this point. I am talking about finding what you do. This is a far more aggressive form of discovering your purpose on this planet. I can’t tell you exactly how to do it, but I can try to illustrate what it feels like when you find it. How? By telling you about what I do.

So what do I do?

I make financial data come to life using visualizations. I turn cold, hard facts into vibrant, flowing charts. I do all of this in the hopes of explaining a complex financial topic in a much simpler manner. My goal is to make you see something you hadn’t seen before. While I don’t always accomplish this goal every week for every reader, I do hope that, occasionally, you come away amazed.

For example, consider the 1 year real returns for 9 different asset classes from 1976–2016. I could make you a table with the average return and standard deviation for each asset class.

Or, I could show you this:

Which one do you think is more effective in allowing you to compare asset classes and get an understanding for their risk and reward? Don’t get me wrong, the point estimates are useful, but distributions are far more intuitive.

And this is just the beginning. What if I wanted to use this same data to ask a bigger question? What if I wanted to know what the long term returns of these assets looked like? If we plot the 20 year annualized real returns for these same asset classes, a different picture emerges:

With this level of aggregation we can draw many more useful conclusions. For example, we can clearly see that commodities have had negative real returns over longer periods of time and that the return on U.S. housing is close to 0%. So much for the American dream, right?

And this is just the tip of the iceberg. I could take this one chart and run with it in different ways. I could ask why the bond-like instruments have a bell shaped distribution while the equities do not. Or, I could ponder why REITs have performed so well or why gold has the widest distribution of returns.

And, just for fun, I can do something like this:

This animation doesn’t necessarily have a big point (i.e. things move toward their average return as the holding period increases), but it looks sick.

So why am I telling you this? Because, when you look at something differently than the rest of the world, that is when you have found your purpose. When you see beauty in what others may see as mundane, pay attention. That’s your calling. I don’t know whether it will be finance or art or comedy or music or whatever, but YOU will know.

In my case, while most of the world may see investing as all about money and greed, I could not disagree more. Investing is the grand equalizer of the world. It does not care about your gender, race, religion, sexual orientation, or any other aspect of your identity. Market returns do not discriminate. Gains and losses are shared without prejudice. And, no matter how smart you are, you cannot outsmart the market consistently. This fact is humbling and showcases the incredible power of the market. It is amazing to me how the market acts more like a biological system than almost anything humans have ever created. The market has fractal properties and it’s always evolving. Morgan Housel calls it the unsolvable puzzle.

But, more than just that, investing and the markets reflect stories that encompass all of modern history. Consider this chart of the U.S. stock market that displays the real returns with dividends for the 20th century and for the 21st century (thus far). Note the y-axis is a log scale:

Each line with its many peaks and valleys contains the influence of hundreds of millions of individuals making trillions upon trillions of collective decisions. War, peace, life, death, innovation, destruction, division, and cooperation. They all exist in the chaotic lines above. Despite all of that chaos, there is incredible beauty. Why? Because the story of markets over the last few hundred years is a story of massive human cooperation. I have discussed this idea before here, but I cannot restate its importance enough. By investing, you are participating in the very act that is bringing about increased human cooperation and improved well being around the globe. You are helping businesses to employ individuals and, hopefully, make their employees’ lives better. While the system is far from perfect, especially at distributing the gains, things will get better with time.

You may not see it like I see it, but that’s okay. Either way, I want you to go out and find that thing that you see differently. Find the thing that you want to show the world. If you really think about it, there is nothing stopping you. Find what you do. Thank you for reading!

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This is post 40. Any code I have related to this post can be found here with the same numbering:


The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice. The postings on this site are my own and do not necessarily reflect the views of my employer. Please read my “About” page for more information. is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to and affiliated sites.

Find What You Do was originally published in Of Dollars And Data on Medium, where people are continuing the conversation by highlighting and responding to this story.

Cartera #2DeepValue 3T17 - Lun, 10/02/2017 - 23:39

La cartera se ha comportado satisfactoriamente, con una revalorización anual acumulada al final del tercer trimestre del +31,3% y que compara con el +12,6% del Stoxx 50 Gross Return. 


El patrón de comportamiento que se viene observando desde 2012 se repite en el acumulado del año, con algunos valores mostrando números excepcionales y otros tantos con rendimientos moderadamente negativos. Al cierre son seis los valores que se han revalorizado más del +50% (Pharol, ENCE, Cementir, Cofide, Correa y Novabase) promediando +69% y son cuatro los que muestran resultados negativos promediando -16% (Safilo, Vallourec, Maurel et Prom y Bilfinger).

Por países, Italia con cinco representantes se ha revalorizado un +31%, mientras que la media de los tres valores españoles es de un +52%. Son ocho los valores que han distribuido dividendos -que no reinvierto y computo íntegro a efectos de los cálculos de retorno-, cifra superior a la de ejercicios anteriores.

La mediana de la revalorización de la cartera se ha situado en un +30,9%, muy cercano al promedio de la cartera y que ayuda a aproximar cierto equilibrio en las revalorizaciones del conjunto. Estelar en todo caso es la evolución de Pharol, de Ence y en el tercer trimestre de Cementir Holding. Sin el valor de mayor revalorización -Pharol- la cartera #2DeepValue hubiera quedado en el +27,8%.

1.000 euros desde Jun 2012

Desde junio de 2012 la revalorización acumulada alcanza +336% frente al +91% del Stoxx 50 GR. Esto equivale a una tasa de retorno anualizada del +32%. vs +13% del comparable. Así, 1.000 euros invertidos en #2DeepValue en junio de 2012 son 4.359 euros al 29 de septiembre de 2017 y 1.913 euros si se hubieran invertido en el índice.

Artículos recomendados para inversores 211 - Lun, 10/02/2017 - 03:45

Recopilación de artículos recomendados para inversores en general y, en especial, para los seguidores del value investing, volumen 211.

La entrada Artículos recomendados para inversores 211 aparece primero en Academia de Inversión - Aprende value investing desde cero.

Los clásicos nunca fallan

LaVueltaAlGrfico - Vie, 09/29/2017 - 08:22
Durante estas vacaciones a parte de viajar, me propuse releer algunos clásicos de los mercados. Muchas horas en aeropuertos, aviones, buses y trenes como para desperdiciar el tiempo. Son libros totalmente anacrónicos y que nos permiten sentar unas bases sólidas de nuestro proceso de inversión.

21 millones de Bitcoin

LaVueltaAlGrfico - Mié, 09/27/2017 - 08:30
Por poco que hayas oído hablar de Bitcoin, ya sabrás que la oferta de esta cryptodivisa tiene un límite: 21 millones. Pero, ¿qué ocurre cuando se alcanza este límite? ¿deja de funcionar? ¿hay que pasarse al Ethereum? Y sobre todo… ¿qué pasa con los mineros? ¿apagan todos los sistemas que han montado?

Alaska’s Crude Truth about Growing Dividends - Mar, 09/26/2017 - 13:00

What happens if you treat your stake of the oil wealth — through the Alaska Permanent Fund Dividend — as a long-term resource?

At this time of year in Alaska, the light is slipping away as the long winter sets in. However, a bright spot comes on October 5th when every man, woman, and child in Alaska receives $1,100 dollars from the Alaska government. Why? The Alaska Permanent Fund Dividend (PFD). The PFD provides an annual distribution of earnings derived from state oil revenues that have been reinvested in global markets.

The western Alaska city of Bethel, pictured in January 2017, is a hub for people who live in small communities without many jobs and depend on the Permanent Fund Dividend to keep their homes warm. Photo by Ben Matheson.

The fund owns an incredibly broad global portfolio of assets worth about $60 billion. This includes stocks, shopping malls in suburban Washington D.C., Israeli private equity, venture capital (we own a small portion of Snapchat), infrastructure, and complex financial products like mezzanine debt.

Each year, the dividend is calculated based on a five-year rolling average of realized earnings. The highest dividend on record was $2,072 in 2015. Thanks to the billions of barrels of oil on state lands, Alaskans enjoy the annual dividend and are exempt from a state income tax. However, after oil prices cratered in 2014, the state found itself digging deep into saving accounts and setting the groundwork for systematic withdrawals from the PFD. The governor vetoed half the dividend last year, and the legislature reached a compromise of value of $1,100 per resident this year.

A common nugget that makes the rounds in Alaska each fall is the total amount of money paid out by the fund since inception. As of 2016, if you had received every dividend since 1982, you would have a total of $40,121. While this isn’t chump change, it dramatically understates the true value of the dividend and serves as a powerful and relevant example of the time value of money.

What if you were fortunate enough to have squirreled away each dividend in the stock market, specifically a generic, low-cost S&P 500 index fund and then never touched it?

I built a simulation to show the growth of an Alaskan’s capital if they had invested the annual dividends in a simple S&P 500 index fund and left it alone to grow.

The results are impressive. A 35-year-old today, who was just an infant in 1982, would have grown their money to a tidy sum of $220,136 by 2016. This late Millennial had the benefit of the bull market of the late 90s.

A ten-year-old born in 2007 experienced a far different set of market conditions. Though they were born just as the housing market overheated and plunged financial markets into the Great Recession, they would still have $25,089 if they had bought and held:

Those without the benefit of the Alaska Permanent Fund Dividend still have the option to approach an unexpected windfall like a bonus, inheritance, or surprising tax return in a way that creates future value without impacting their standard of living. We may not all receive oil money, but we all have a chance to turn a nonrenewable resource into a renewable one.

This annual massive influx of around $700 million (or nearly double that in the highest dividend years) into Alaska’s small economy is well-anticipated by businesses eager to score a chunk of the pie. Alaska Airlines rolls out a sale for tickets to Hawaii, while snowmobile dealers entice people to put their check into a down payment and ride off in a new rig. A local event known as the PFD Travel Fair (put on by the travel industry) celebrates the dividend and volunteers for helping you spend your dividend on the right tickets: “our job is to help you make the most of your PFD Travel budget.” While Alaskans have pushed back even on the concept of studying the PFD in recent decades, there is a growing body of literature and media attention dedicated to exploring how Alaskans spend, save or otherwise use the dividend.

A bush pilot approaches the Kuskokwim village of Tuluksak. Rural Alaskans live in a region with an extremely high cost of living and limited economic opportunity. The PFD plays an outsized role in many families’ annual budgets.

40 percent of Alaskans reported planning to spend all of their PFD, according to a survey by Northern Economics, though more than two thirds of the spenders said it would be going towards bills. 20 percent claimed to be planning to save the full value of their dividend.

Emeritus Professor Scott Goldsmith of the University of Alaska Anchorage has studied the PFD as long as anyone and points to conflicting data on how the dividend is spent and saved. However, any observer of the Alaska economy knows that retailers capture a significant piece of Alaskans’ checks.

“There is no evidence that the cumulative saving of dividends has resulted in a significant accumulation of wealth or provided a base of assets, or ‘grubstake’ as we say in Alaska, leading to private sector investments generating economic development,” wrote Goldsmith.

Studies using hard data are beginning to emerge: Lorenz Kueng of Northwestern leveraged data from a personal finance website that tracks individual spending through credit card records and bank accounts (think a Mint-style site) and found that the average households breaks from the expected pattern of regular, normalized spending and burns about a third of the dividend on non-durable items in the three months after the dividend arrives. Curiously, he found that higher income households are more likely to spend than lower income households, although lower income households with little liquid wealth (low bank account balances) are more likely to spend than those with liquidity. Still, high income households strongly respond to the dividend payments each October.

Knowing that the oil will one day run out (the pipeline is running at one-quarter capacity and may be shut down in future decades if engineers can’t keep the oil flowing at lower rates), many believe that converting a nonrenewable resource (oil) into a renewable one (financial assets) is prudent to share the wealth across multiple generations. Others hold the dividend as intended to be a citizens’ check on government spending. But the social impacts are part of the debate: in rural areas reachable only by small plane, the injection of cash is critical for families largely surviving off foods they harvest from the land: moose, caribou, berries, and even seals and whales. It buys heating oil, snowmobile parts, and tools essential for the traditional lifestyle.

Alaskans often see the dividend as a simple payment due to members of the “owner state.” Just as oil companies pay a North Dakota farmer a royalty for each barrel of oil extracted, the drillers pay the state government for oil pulled directly from state lands before sending it down the Trans-Alaska pipeline. A quarter of this royalty is constitutionally protected in the Permanent Fund. After the money grows in the market, the royalty payment goes to the actual owners: Alaska residents. But others are eyeing the PFD as a model for an uncertain economic future.

As part of his journey to visit all 50 states, Faceboook founder Mark Zuckerberg visited Alaska and highlighted how similar the PFD is to a system of universal basic income(UBI). That is, a regular, unconditional amount of money that each person receives no matter their economic status.

As sophisticated algorithms, artificial intelligence, and robots replace work once thought to be the exclusive domain of people, economists and technologists anticipate a future in which millions of able-bodied people are out of jobs and the profits are funneled to a narrow set of tech companies. Taxing robots or wealth to deliver a basic standard of living is an idea for maintaining a stable society — one that has reached the forefront of politics. In Hillary Clinton’s new book, the former Democratic nominee reveals that she explored extending Alaska’s system nationally to tax financial transactions and ultimately name a basic income program after the state.

For those living on the lowest incomes, the difference of $1,000 — $2,000 a year can be huge, especially as a family with children receives dividends for each child. University of Alaska Anchorage economists Matthew Berman and Random Reamey showed that the dividend has lifted 15,000 to 25,000 Alaskans out of poverty each year and estimate that getting rid of the PFD would boost the number children living in poverty by a third.

The societal-level benefits and costs of large-scale UBI-style programs will be determined in years to come. At an individual level, those with the ability to save and invest their annual checks (or other significant influxes of money) have a tremendous opportunity to grow a modest one-time sum into a much larger amount of capital.

The Alaska experiment may be ongoing, but the evidence for powerful personal investment growth is stretching towards four decades as Alaskans have a chance to turn non-renewable oil wealth into diversified and arguably more renewable assets.


The code for the PFD investment calculator is built in JavaScript (React) and is available here, along with additional analysis and plotting done in R.

Alaska’s Crude Truth about Growing Dividends was originally published in Of Dollars And Data on Medium, where people are continuing the conversation by highlighting and responding to this story.

Wall Street Recap: September 17-23, 2017 - Mar, 09/26/2017 - 06:00

My full notes and analysis from the past week: September 17-23, 2017.  Periodicals covered in this Wall Street Recap include the WSJ, FT, NYT, and LA Times.

Investing in “Hot” Industries

“A lot of the places where the industries are doing a great job for the world, it’s very hard to make money out of it.  Because these wild enthusiasms come into it.  I don’t have a favorite industry.” – Charlie Munger

In the depths of the ocean, the glow from a small lure stands out among the darkness.  Fish from the surrounding waters swim toward the lure, tempted with the promise of a free lunch.  Little do they realize that they are swimming right into the jaws of an angler fish and their impending doom.

Likewise, “Hot” industries have historically acted like an angler fish, attracting investors who unwittingly swim into the jaws of poor investment returns.   Think back to the hot industries in history such as autos, airlines, and dotcoms.  The lure of those industries was typified by two compelling elements;

  1. A story of a world-changing product or service,
  2. Stellar growth wrapped around massive consumer demand.

Even though those industries had favorable long-term tail-winds, industry returns were abysmal and left thousands of bankrupt companies in its wake.  Why?

Two key reasons:

  1. Durable Moats are Illusive: “Hot” industries are defined by growth and rapid change.  This constantly evolving environment makes it incredibly hard to predict winners and losers.  The best product or service today may become obsolete tomorrow.  And a perceived competitive advantage today may vanish overnight.
  2. Wild Enthusiasm Attracts Too Much Capital: Wild enthusiasm attracts massive amounts of capital into hot industries.  This in turn increases competitive pressures and drives down the returns on invested capital.

Examples of “hot” industries from the last century:

Autos: “Autos had an enormous impact on America, but in the opposite direction on investors.”…”of the two thousand companies, as of a few years ago, only three car companies survived. And, at one time or the other, all three were selling for less than book value which is the amount of money that had been put into the companies and left there.” – Warren Buffett (link)

Airlines:  “Here’s a list of 129 airlines that in the past 20 years filed for bankruptcy. Continental was smart enough to make that list twice. As of 1992, in fact–though the picture would have improved since then–the money that had been made since the dawn of aviation by all of this country’s airline companies was zero. Absolutely zero.” – Warren Buffett

Nifty-Fifty Tech Stocks: A study found that the compounded annual return of the Nifty-Fifty portfolio from the peak in 1972 to 1998 was actually quite admirable, 12.5%.  The study also found that the Technology stocks in the Nifty-Fifty were significantly over-valued at the peak, and, as a result, performed poorly over the 26 year period.  On the other hand, predictable and “boring” consumer staples stocks like Gillette, Phillip Morris, and Coca-Cola all performed well, and, in hindsight, were still undervalued at the peak of the investment craze.  (link)

Mental Model: Viscosity

Viscosity: the state of being thick, sticky, and semifluid in consistency, due to internal friction.  Liquids show a reduction in viscosity (stickiness) with increasing temperature. (link)

Hot industries are like a fluid with low viscosity.  They are fluid, in a state of change, and have little resistance to deformation by (industry) stress.  All of which make them hard to predict.

Meanwhile, industries and businesses that are highly viscous are “sticky”.  Their future can be predicted with reasonable confidence.

As a fluid increases in temperature, its viscosity decreases (i.e. becomes less sticky).  Applying that model to investing, as an industry becomes “hot”, it becomes more fluid and less predictable.

This has implications regarding the usefulness of a company’s historical financials.  As an industry’s “temperature” increases (i.e. becomes more fluid and subject to change), a company’s historical figures may no longer be an accurate representation of its future performance.  Using a company’s historical financials in this new environment invites error and potential over-valuation.  (Or under-valuation if the reverse is true; low viscosity moving to high viscosity)

Investment Lessons:

Avoid “Hot” Industries: Subject to intense competition and an ever shifting environment, it is challenging if not impossible to predict winners and losers in a hot industry.

“We make no attempt to pick the few winners that will emerge from an ocean of unproven enterprises.  We’re not smart enough to do that, and we know it.” – Warren Buffett

Invest in Sticky “Predictable” Businesses: Investing in sticky businesses follows Buffett’s prescription of not fooling yourself and not losing money.

“…we try to apply Aesop’s 2,600-year-old equation to opportunities in which we have reasonable confidence as to how many birds are in the bush and when they will emerge.” – Warren Buffett

“Hot” Industries: In the News

Netflix, Tesla, and Blue Apron are the hottest companies in hottest industries.  Each one is contending with wild enthusiasm and a flood of investment capital.  Some of the most recent developments threatening these companies are listed below.



“Facebook Inc. is loosening its purse strings in its drive to become a major hub for video.  The social-media giant is willing to spend as much as $1 billion to cultivate original shows for its platform,” (link)

“It also signals Facebook’s readiness to spend more than before to become what Chief Executive Mark Zuckerberg calls a ‘video-first’ platform.”

HBO, Amazon, Netflix, Facebook, and Apple are all “banking on video to capture the fleeting attention of users and seize billions of dollars in advertising that is expected to migrate from television to digital video.”


“Apple Inc. is preparing its own billion-dollar war chest for content.”


“For Netflix, Disney’s decision to hold on to rights to ‘Star Wars’ and Marvel movies will add to the pressure to create appealing original content of its own to replace some of the high-profile franchise films Netflix will lose starting in 2019.” (link)

“The big problem is not aggregate costs, but costs versus competitors. If your costs are out of line, you’re going to get killed eventually.” – Charlie Munger



” VW, the world’s biggest carmaker, says it will build 50 all-electric models by 2025 and electrify 300 models by 2030.”

The speed of the shift is remarkable…The switch is driven by policy: “European regulators were previously content to set environmental standards and let manufacturers decide how to meet them.  Since the emissions cheating scandal, they are quite reasonably inclined to be more prescriptive…This is prompting a rapid change in consumer behavior: few people will risk buying a car that may be of limited use within a decade.”

Mercedes, Smart, BMW

“Daimler boss Dieter Zetsche said the Mercedes owner’s ‘entire portfolio’ will be electrified by 2022.  The Smart brand will become fully electric by 2020, making it the first internal comustion engine marque to make the switch.”

“BMW told reporters at the show: ‘Our top priority now as a company is electric mobility.'”

Nissan-Renault-Mitsubishi alliance

“The chairman and chief executive officer of the Nissan-Renault-Mitsubishi alliance is pushing ambitious targets for the auto makers in an effort to leapfrog Silicon Valley and swipe market share, even as some of his biggest rivals look to scale back.” (link)

He is also planning 12 new electric cars, forays into robotaxi fleets and the debut of a fully autonomous car within six years.”

“With the explosion of technology that is coming, it is going to make it very difficult for smaller players to follow. Mr. Ghosn said.  “You’re going to have a premium for the large car manufacturers because we are the only one who are going to be able to invest in all the fields, all the products, all the markets, all the technology without making any shortcuts or without having any blind spot.”

Blue Apron


“Albertsons Cos. is buying the Plated meal-kit service, the first acquisition of a prepared-meals company by a national grocery chain as supermarkets scramble to keep shoppers coming to their stores.” (link)

Bob Miller, chief executive of Boise, Idaho-based Albertsons, said in an interview Wednesday: “We think there’s an opportunity to grow this thing tremendously,” adding that the supermarket will give Plated a “cost advantage” over other meal-kit companies by the scale of its food purchasing and network of 18 manufacturing plants.

“The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money.” – Warren Buffett

Psychology of Human Misjudgment

Confirmation Bias

Anti-Soros conspiracies sweep the globe (link)

“Conspiracy theorists have an explanation for everything.  So the fact that the Financial Times should publish a column defending Mr. Soros will simply be taken as further evidence of his nefarious influence.

Deprival Super-Reaction Syndrome

Along with the migrating steelhead, Oregon river pool holds life lessons (link)

“He recalls watching a man catch a wild steelhead.  The man was furious because by law, he could keep a marked hatchery fish, but had to throw back a wild fish.  He tore the fish’s mouth and bashed it against a rock.”

“‘As a species, we can be unbelievably kind on an individual basis – a person will give you the shirt off their back on the trail.  But start creating vested interests and people can be unbelievably brutal.‘”

Over-Influence by Authority

Shortcomings in Tesla’s self-driving tech cited among factors in fatal crash (link)

“Joshua Brown, a Tesla owner, was killed last year when his car ran into the side of a truck that was turning across the roadway in front of it.”

“He said Brown had put a higher level of trust in the Autopilot system than was intended and that the driverless technology had not been designed to operate on the road where the crash occurred…Brown had his hands on the steering wheel for only 25 seconds during the 37 minutes leading up to the crash.”

Say-Something Syndrome

Instragram video of weapons leads to an arrest (link)

“A Texas gang member suspected of violent robberies, home invasions and murder, was captured by the LAPD after…he posted a video of himself on Instragram displaying a gun collection,”

Forgetting what one is really trying to do

What started out as a plan to reduce the pigeon population in Lisbon, has turned into a mission to provide “dignity and quality of life” to pigeons.

Lisbon Has Too Many Pigeons, So It Built Them a Luxury Resort (link)

“Since the birdhouse opened…its mission has crept beyond mere population control.  Caretakers have equipped the facility, which costs 250 euros per month to maintain, with a pigeon first-aid station, and there’s talk of offering services such as deworming and, paradoxically, a nursery….’Pigeons deserve and need dignity and quality of life,’ she says”

“A majority of life’s errors are caused by forgetting what one is really trying to do.” – Charlie Munger

Simple Psychological Denial

Ex-Pakistan PM’s wife wins Lahore by-election (link)

The Panama Papers “revealed documents detailing (Mr. Sharif’s) offshore accounts, and show his family owned assets he could not account for…This was followed by the supreme court’s ruling that his unexplained wealth made him unfit for office.”

“But many of Mr. Sharif’s supporters believe the guiding power behind the supreme court ruling was the army,”

Tattoos: Lollapalooza Effect

Youths’ tattoos aren’t always cause for alarm, report says (link)

Consistency and Commitment:

“A 2016 Harris Poll found that most adults who have gotten a tattoo-86%-have never regretted doing so,”

“People think if they have committed to it, it has to be good. The minute they’ve picked it themselves it gets an extra validity. After all, they thought it and they acted o­n it.” – Charlie Munger

Liking Tendency

“They’re emulating people who are out there – athletes, musicians, military personnel – people they look up to,”

Incentive-Caused Bias

“People who get inked typically say they feel sexier, rebellious, attractive or strong.”

Social Proof

“As many as 38% of young people 18 to 29 report having a tattoo…’More often’, she says, ‘(tattoos are a) generational act of solidarity.'”

Mental Model: Parkinson’s Law Parkinson’s Law. Observation that “work expands to fill the time available for its completion,” and that a sufficiently large bureaucracy will generate enough internal work to keep itself ‘busy’ and so justify its continued existence without commensurate output. (link)

Trump champions UN while urging reform (link)

“‘While the United Nations on a regular budget has increased 140 percent, and its staff has more than doubled since 2000, we are not seeing the results in line with this investment,’ said Mr. Trump”

Various Fascinating Excerpts

A test of compassion (link)

“‘For the first time in my life I was really proud of German,’ she says…But the initial enthusiasm soon wore off…(when she) quickly realized what a hard slog it would be to absorb so many immigrants from an entirely different culture.  The trigger was when an elderly Syrian man told her that ‘Hitler was a good man, because he gassed all the Jews.’

Japan Post share sales faces uncertain journey (link)

“Mr. Nagato was hauled before senior figures in the ruling party and told to ‘work for a living, rather than gambling,’.”

Youths’ tattoos aren’t always cause for alarm, report says (link)

“Human resource managers named tattoos as the third physical attribute likely to limit career potential (non-ear piercings and bad breath were the top two).”

Russian-built nuclear plant revives Chernobyl fears in eastern Europe (link)

“All the profits go to Belarus, all the risks are on the Lithuanian side” – Regarding Nuclear power plant being constructed in Belarus, near the Lithuanian boarder.

Waters Rise and Hurricanes Roar, but Florida Keeps on Building (link)

“Florida was built on the seductive delusion that a swamp is a fine place for a paradise.”

“The risks of building here are far better known today.  Yet newcomers still flock in and building still rise, with everyone seemingly content to double down on a dubious hand.”

Epifanía del sábado noche: Soros y el Bitcoin - Lun, 09/25/2017 - 11:15

Epifanía del sábado noche: Soros y el Bitcoin

Por Adrián Godás.

Lo que procedo a contar es una historia singular y curiosa que ha desencadenado un huracán de razonamientos y reflexiones.

Todo sucedió hace unos días, el sábado 16 a las 23:00 aproximadamente. El día anterior había comenzado a leer La alquimia de las finanzas de George Soros, y para entender mejor la Teoría de la Reflexibilidad (tranquilos que hablaré con calma de todo esto) me vi unos vídeos de Alejandro Estebaranz en su canal de YouTube, aquí.

Cuando estaba terminando el segundo vídeo, sin razón alguna, algo hizo clic en mi cabeza:

El Bitcoin va a caer

Esas palabras me vinieron a la cabeza y no pude sacármelas hasta que empecé a escribir este artículo. Mi cerebro aplicó la Teoría de la Reflexibilidad al Bitcoin y todo cuadraba, era momento de vender.

El hombre que quebró el Banco de Inglaterra

Me cuesta creer que haya alguien en el mundo de las finanzas que no conozca a George Soros, pero aun así os haré un pequeño resumen del (probablemente) mayor especulador de la Historia.

George Soros nació en la Hungría de los años 30; gracias a pertenecer a una familia de clase media pudo escapar del régimen nazi a Londres, donde estudió Economía y Filosofía. A mucha gente le choca su gran pasión por la filosofía, pero fue un factor clave en la composición de su pensamiento. De hecho, fue alumno de uno mis filósofos favoritos: sir Karl Popper.

Fue ascendiendo por los círculos financieros hasta que pudo fundar el Quantum Fund, uno de los fondos más rentables del siglo XX consiguiendo una rentabilidad del 33% durante más de 30 años.

A parte de rodearse y aliarse con varios de los mejores gestores, como Druckenmiller o Jim Rogers, Soros pasó a la Historia con una de las mayores inversiones jamás vistas. En 1992 cogió mil millones, los apalancó por cinco y abrió cortos por valor de 5000 millones en libras esterlinas. El resultado fue que el Banco de Inglaterra, que en aquella época tenía que mantener un cierto valor en la libra, sufrió tales pérdidas que tuvieron que dejar caer la divisa y devaluar. La moneda cayó un 20% y Soros se embolsó un beneficio neto de 1000 millones, la mayor ganancia jamás lograda en un día en la Bolsa.

También es muy famoso por sus causas políticas y actos filantrópicos. En los 80 respaldó con grandes sumas de dinero movimientos en varios países de la URSS para la transición al capitalismo. En épocas recientes también apoyó a candidatos americanos como Hillary Clinton.

Llegados este punto os estaréis preguntando porque lo leo y que tiene que ver con el value investing. A continuación, os lo explico.

La alquimia de las finanzas y la Teoría de la Reflexibilidad

Un detalle que poca gente sabe es que en sus inicios era value investor, y se dedicaba a comprar empresas baratas.  A partir de ahí empezó a desarrollar su propio método, que como hemos visto, le ha funcionado bien.

La mayor parte de su teoría la explica en su libro La alquimia de las finanzas. Lo estoy leyendo actualmente y es muy recomendable. Ahora bien, es muy técnico y complicado de leer. No sólo necesitas tener ya un cierto nivel de cultura financiera, si no también conocer un poco (bastante) de historia financiera y económica.

Por encima debido a su faceta de filósofo y su clara influencia de Popper tiene una manera de escribir muy técnica y propia de autores filosóficos. Coincidió que mi anterior lectura fue La miseria del historicismo de Popper, por lo que noto muy claramente las similitudes con su maestro.

Pero esto no es una reseña del libro, así que pasemos al modelo mental que le ha hecho multimillonario: la Teoría de la Reflexibilidad.

Nota: voy a tratar de sintetizar sus ideas, por lo que obviaré ciertos matices y detalles para facilitar la comprensión del modelo.

Soros cree que los mercados son inestables por naturaleza y es casi imposible que alcancen un equilibrio. Además, también piensa que es un error usar los métodos matemáticos propios de ciencias naturales, como la física, a las ciencias sociales, como la economía, porque estas últimas estudian seres que “piensan”.  Como somos seres humanos que existen y “piensan” tenemos fallos de percepción y conocimiento. Esta idea a la que denomina como “problema del entendimiento imperfecto” es clave.

Soros atribuye este problema a que en los sistemas creados por el hombre (economía, Bolsa…) los participantes con su actividad mental afectan a la situación sobre la que están pensando.  

Esta idea que puede parecer muy abstracta procede del Principio de incertidumbre de Heisenberg, enunciado en los años 20 por el físico alemán que dio nombre al protagonista de Breaking Bad (serie de televisión muy recomendable). Este principio establece la imposibilidad de conocer al mismo tiempo la posición y la velocidad de una partícula debido a la influencia del propio observador.

Heisenberg observó que si queremos localizar un electrón (posición) es necesario hacer rebotar fotones en él. Esto produce una alteración en su movimiento (velocidad), de manera que es imposible medir de forma exacta ambas variables.

El observador altera la realidad observada.

Es aquí, a partir de estos razonamientos, donde empieza desarrollar su modelo.  Para explicar esta conexión entre la percepción de los participantes, y la situación observada crea las “relaciones funcionales”:

-Función cognitiva: los esfuerzos de los participantes por entender los hechos. Representa la percepción que tienen los sujetos. En el mundo financiero se ve representada por las gráficas de precios, las cuáles recogen en todo momento el conjunto de ideas y expectativas de los distintos actores.

-Función participativa: impacto en el mundo real de la actividad mental. Los llamados “fundamentales”, que en el caso de las empresas serían los beneficios y en las divisas factores como el comercio, y los capitales especulativos y no especulativos.

Un detalle importante que me hizo reflexionar bastante fue cuando Soros comenta que la variación de precios afecta a los fundamentales y a las propias empresas. Yo (y supongo que la mayoría de values) creemos que los precios no afectan en nada a la empresa, y que los movimientos de precios a corto plazo son fruto de las irracionalidades de mercado. Esto es lo que dice al respecto:

“Los valores bursátiles influyen de manera directa sobre los valores subyacentes: mediante la emisión y recompra de acciones y opciones, y través de operaciones empresariales de todo tipo-fusiones, adquisiciones, estatizaciones, privatizaciones-. […] rating crediticio, aceptación de los consumidores, credibilidad del management, etc.”

Realmente interesante la visión de Soros, que tiene la clase de ideas que me gustan: únicas y contrarias al resto.

Veamos cómo se representa la Teoría gráficamente:

La función cognitiva como ya dije son los precios, y los fundamentales (simplificados como beneficios por acción) es la participativa.  El proceso se divide en varias etapas y voy a ejemplificarlo con uno de los mayores procesos reflexivos en décadas, la burbuja inmobiliaria:

  1. Algún mercado comienza un proceso reflexivo. Aquí la gente empieza percibir una nueva realidad, como, por ejemplo: la vivienda es buen activo para protegerse de la inflación y el precio nunca cae.
  2. El proceso avanza y el mercado empieza reconocer y valorar esas ideas y fundamentales que se ven reforzadas por las crecientes expectativas. En EEUU y España ciertas empresas relacionadas (constructoras e inmobiliarias) empezaron a subir bastante a finales de los 90.
  3. El mercado duda, y se genera lo que Soros llama Test donde se pone a prueba el proceso reflexivo. En muchas ocasiones puede que caiga y se frene el proceso, en otros la tendencia continua. Podrían suceder varios Tests, pero aquí solo ejemplifica uno. Esto sucedió en los años 2000-2001 cuando pinchó la burbuja tecnológica, los precios bursátiles cayeron y el proceso reflexivo de la vivienda se estancó.
  4. La percepción se ve claramente distorsionada, las caídas en los beneficios se ignoran y todo sube generando un super-rally alcista. Al tener una tendencia tan clara las expectativas suben, se genera el pensamiento clásico: no puede caer, sólo subir. De esta manera cuanto más sube, más fuerte se hace la tendencia. No hay ejemplo más claro que los años 2003-2007.
  5. El clímax. Llega un punto donde las valoraciones y expectativas son tan irreales que “la realidad no puede sostenerlas”. De esta manera pequeñas noticias crean caídas enormes (noticias como la quiebra de WorldCom o el escándalo Enron en los años 2000 fueron los que empezaron a romper la burbuja .com). En España llegamos a 2007.
  6. Se empiezan a reconocer las sobrevaloraciones y errores de mercado provocando caídas en las expectativas y de confianza. Pero ojo, los fundamentales (la realidad) van atrasados y se estabilizan. Soros dice que este período es el más peligroso porque da la sensación de que las acciones pueden estar baratas, y que los beneficios no han cambiado… Pero sólo es el principio del fin. En España sucedió que en la primera mitad de 2008 donde la Bolsa caía todavía crecíamos.
  7. A partir de aquí la tendencia se invierte y llega al punto de no retorno. El proceso reflexivo se da la vuelta y se empieza a retroalimentar hacia abajo generando enormes caídas generalizadas, beneficios en declive… Podría decirse que este punto se cruzó a mediados de 2008 en la Península.
  8. El proceso continúa a la baja un tiempo, un periodo bajista, hasta que llega un punto donde todo se estabiliza y los “cazadores de gangas” empiezan a pescar. El IBEX 35 estuvo lateral sin moverse demasiado bastantes años.

Si observamos el gráfico del IBEX 35 veremos una asombrosa coincidencia con el modelo: el auge al principio, el test, la fase alcista, el colapso, la estabilización…

Un detalle importante que quiero comentar, y que el propio Soros lo menciona en el prólogo: esto es una teoría general, pero tiene sólo aplicaciones específicas. Lo que quiero decir con esto es que no todas las acciones, sectores, economías, divisas…. viven en un proceso reflexivo constante como el que él menciona, si no que simplemente a veces ocurren. En general, suelen ser movimientos Boom & Bust como se les suele llamar en inglés, que son movimientos de auge durante varios años que acaban colapsando en poco tiempo.

Otra forma más simple de sistematizar su teoría:

Veamos varios ejemplos de reflexividad que con la perspectiva histórica hemos podido observar:

-El super ciclo de las materias primas del que se beneficiaron gran cantidad de países emergentes. Muchos de ellos pagando actualmente las consecuencias de no haber diversificado su economía mientras podían.

-Las compras apalancadas de los 80, LBO. Ejemplo paradigmático es el de RJR Nabisco, historia ya clásica en el mundo financiero.

-La burbuja de la biotecnología en los últimos años, muy bien explicada en el vídeo de Alejandro por lo que no me extenderé sobre ella.


Hemos visto cómo funciona el modelo de Soros, veamos ahora la otra mitad del asunto:  las criptodivisas y en especial el Bitcoin.

Las criptodivisas

Sinceramente, no sé qué escribir o como empezar siquiera.

Al indagar sobre ellas me he encontrado la mayor maraña de datos, opiniones, discrepancias, detalles… que jamás he visto en el mundo financiero.  Porque veréis, cuando buscas información sobre una empresa, una divisa, un metal… encuentras la opinión del consenso, amplios datos históricos, opiniones expertas….  Pero en este caso he visto que tratar de resumir la situación es imposible por varias razones, entre ellas que nunca había aparecido algo semejante.

Por si has estado viviendo en una cueva te hago un resumen rápido:

Las criptomonedas son un medio de pago virtual. En 2009 surge la primera divisa que fue el Bitcoin, de la mano de Satoshi Nakamoto (verdadera identidad desconocida). A raíz de esta aparecen una larga lista, entre la que destaca el Ethereum.

  • Una criptodivisa es algo absolutamente virtual, así que no busquéis monedas como estas.

  • No tiene el respaldo de ningún gobierno o entidad financiera.
  • No se puede falsificar.

Al igual que todas las monedas, no tiene ningún valor intrínseco, todo se basa en la confianza.  Si la gente confía en que serán útiles y otra gente las aceptará, suben. Hay mucha literatura escrita tanto en internet como en libros, os invito a echarle un vistazo.

Para ver cómo está el ambiente a pie de calle he preguntado a varios amigos al respecto y os garantizo que ninguno coincidió en la respuesta ni me disipó dudas. No se trata simplemente de analizar si las criptodivisas son el futuro o flor de un día; va más allá de todo eso:

  • “Pasa como con los móviles o las webs cuando comenzaron, van a tener gran importancia en el futuro, pero es casi imposible saber cuál se va a imponer”
  • “El bitcoin no me parece una burbuja, pero dicho esto no creo que sea buen dinero como tal. No veo a los estados dejándose ganar la batalla.” 
  • “Especulación”

De todas las opiniones he cogido estas tres porque si reflexionamos veremos que las tres opiniones engloban las principales percepciones al respecto, y bajo mi punto de vista son las más sensatas. De hecho, tras leer bastante creo que es posible defender cualquiera de esas tres posiciones que se resumen así:

1. Las criptomonedas van a tener un papel clave en el futuro, pero al igual que todas las nuevas tecnologías en su momento, les queda mucho por recorrer.

De hecho, Paco Lodeiro, que fue el que aportó esta perspectiva, añadió: Pero a estas alturas es casi imposible determinar quién será el ganador. Posiblemente alguna criptodivisa que a día de hoy ni existe.

Muchas empresas que empezaron a fabricar los primeros ordenadores y componentes ya no existen, y tuvieron que pasar muchos años para que aparecieran tecnológicas dominantes como Microsoft, Cisco o Oracle.

2. Las criptomonedas pueden tener importancia en el futuro, pero tiene muchos errores y fallos. Para el que no lo sepa, el Bitcoin suele estar implicado en casos de hackeo, blanqueo de capitales, tráfico de armas, drogas, y un ciertamente largo etc.

Estas divisas virtuales no pueden ser manipuladas por los bancos centrales, políticos de turno o entidades bancarias, a diferencia de las monedas reales.  Este es uno de los grandes argumentos que sus defensores esgrimen, pero Eloy Bretones, dueño de esta opinión añade: pero no veo a los estados dejándose ganar la batalla.

Esta perspectiva aportada por Eloy añade algo nuevo: el marco regulatorio. Recientemente China acaba de prohibir el mercado de Bitcoins y otros países también están barajando opciones como crear su propia criptodivisa. El tema político-regulatorio debe ser seguido de cerca.

3. Las criptomonedas son pura especulación.

La percepción de mi colega universitario Manuel Saborido es muy simple como podéis ver. En muchos medios como este ya se habla de burbuja.  Y sinceramente, me cuesta mucho no verla. Cumple todos los patrones y condiciones de una burbuja. Pero esta perspectiva la analizaré en profundidad más abajo.

A parte de estas visiones hay otras, como la del profesor Rallo o la de Howard Marks. Luego, en un rincón están las típicas frases: “es que no para de subir”, “el hijo del vecino del quinto ha ganado mucho dinero con ellas” …. Pero como buenos value, las vamos a olvidar.

Uniendo los puntos

Ahora que ya conocéis la increíble visión de Soros y un poco la situación de las criptodivisas, de ahora en adelante sólo hablaré del Bitcoin en particular debido a que es la moneda más grande, la más valiosa y la más mencionada. Pero el análisis que voy a realizar se puede aplicar al resto de monedas virtuales.

¿Recordáis mi epifanía del principio? Mirad el precio del Bitcoin y decidme a que os recuerda… oh yes! al modelo reflexivo de Soros.

Nuestro amigo húngaro en su libro argumenta que debido a cómo funcionan los mercados actuales de divisas, estos suelen ser los más propensos a procesos reflexivos. La razón es que, al basarse casi totalmente en la confianza, la principal variable que va guiar el precio son las perspectivas futuras del tipo de cambio de la moneda.

Se percibe que el Bitcoin va a cambiar el mundo, pero… no escuchaba a nadie decir eso en 2014, cuando curiosamente caía el precio. Ahora, tras unas subidas vertiginosas, todo el mundo lo ve como el “sucesor del dinero fiduciario”.  Yo pregunto:

¿No será que la evolución del precio está alterando nuestra percepción de la moneda?

¿Y si a su vez esta percepción es la que está incrementando el precio?

Estaríamos ante un círculo virtuoso y un proceso reflexivo de libro. Ahora bien, también debemos valorar la prohibición de China y las insinuaciones políticas europeas de hacer algo al respecto.

A esto hay que sumar la gran volatilidad que lleva sufriendo el precio estas últimas semanas. Soros afirma que los momentos donde se dispara esta variable suelen ser los momentos de cambio de ciclo, porque hay choque de percepciones; por un lado, los que por miedo venden y por otro los que creen que seguirá subiendo.

La conclusión es la siguiente: según la Teoría de Soros, el Bitcoin está viviendo un proceso reflexivo de Boom & Bust, y que se halla en el inicio del período bajista.

Reflexiones extra

Ahora me gustaría añadir algunos comentarios personales relacionados con burbujas y nuevas tecnologías.

Para empezar, tras una amplia lectura de muchos de los grandes inversores de la historia he llegado a ver ciertos patrones de comportamiento en las burbujas. Personalmente, a parte de los típicos ratios como el PER, me parece que el mejor método para detectarlas es…. el sentido común, el menos común de los sentidos.

En este caso buscamos la “falta de sentido común”, con esto me refiero a buscar comportamientos “especiales” que destaquen por su poca sensatez. Por ejemplo, en el 2000 todo el mundo compraba valores tecnológicos y pagaban PER 50 por ellos. ¿Sabéis cuál era el argumento para comprarlos a pesar de todo?

“Van a seguir subiendo y fijo que alguien está dispuesto a comprar más caro” 

Como bien explica Howard Marks en su libro, también desaparecen cosas como la aversión al riesgo, toda inversión se ve como segura, todo sube…. hasta que deja de ser así. Otro hecho por el que se caracterizan las burbujas es que empiezan por alguna razón objetiva (más o menos) razonable: los tulipanes eran escasos en Holanda, Internet iba a cambiar el mundo, la vivienda es buen refugio contra la inflación, etc

Para valorar burbujas también debemos valorar los aspectos psicológicos, que siempre nos juegan una mala pasada. Están las típicas emociones de “perderse la fiesta”, la codicia, el ser incapaz de llevar la contraria al resto…Si no me creéis preguntadle a Newton.

A pesar de ser una de las mentes más brillantes de Inglaterra acabó cometiendo el error de entrar en la famosa estafa de la Compañía de los Mares del Sur debido a varios amigos que habían hecho fortunas.

Por todas estas cosas no puede evitar ver que muchos patrones semejantes se repiten en el Bitcoin:

  • Su creciente valor tenía una justificación razonablemente sensata (posible sustituto del dinero normal).
  • Cuando cae nadie se acuerda de él, pero en cuanto sube es el tema más candente del momento.
  • La gente entra sin tener ni idea de cómo funciona la tecnología Blockchain o las criptomonedas .
  • Mucha gente entra por el mero hecho de que sube.

Luego aparte están los temas técnicos. ¿Soy el único preocupado por todos los casos extraños y truculentos que envuelven estas monedas? Está bien que muchos chinos la usen para escapar del control monetario y de capitales que imponen por ahí, e incluso he leído de emprendedores que han podido hacer negocios desde su casa en países como Nigeria o Egipto gracias a estas monedas. Pero es que también están relacionadas con blanqueo, robo, hackeo… y muchos brokers todavía no dejan operar con ellas. Desde muchos puntos de vista la veo como una tecnología bebé que le queda mucho por crecer.

Y pensad en este sutil detalle: los padres y abuelos. Si va ser la moneda del fututo la deberemos usar todos para comprar cosas, pero yo no acabo de ver a la gente de cierta edad muy interesada y dudo que lo vayan hacer. Hasta ahora no es más que un nicho para gente joven, especuladores e informáticos.

Por no hablar de que antes de invertir en algo debemos entender el producto muy bien. Todos entendemos las acciones y los bonos, y nos empezamos a perder en futuros y opciones, para acabar desesperados porque no entendemos la programación del Bitcoin. Ojalá todos tuviéramos algo más de cabeza como el gran Taleb.


Tras todo este análisis, ¿a que conclusión he llegado?

Las criptodivisas bajo mi punto de vista están sufriendo un proceso reflexivo, y con poca duda han llegado a su clímax. Considero muy probable que empiecen a desmoronarse próximamente.

Eso sí, a largo plazo (más de 3 años) el escenario puede ser diferente. Creo que las criptodivisas pueden tener un gran futuro, o desvanecerse en el olvido, sólo el tiempo lo dirá.  Esta percepción es la mismas que tengo con todas las tecnologías de vanguardia: impresoras 3D, nuevos materiales, Inteligencia Artificial… A todas les queda mucho por recorrer y absolutamente nadie puede predecir cuál o cuáles serán las ganadoras.

Resumiendo, mantente alejado del Bitcoin por ahora.

¿Quieres leer más reflexiones como esta?

Consigue gratis mi ebook “¿Por qué invertir te va a cambiar la vida?” y descubre por qué deberías empezar a invertir en Bolsa.



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Recopilación de artículos recomendados para inversores en general y, en especial, para los seguidores del value investing, volumen 210.

La entrada Artículos recomendados para inversores 210 aparece primero en Academia de Inversión - Aprende value investing desde cero.

Lecturas de domingo 24/09/2017

LaVueltaAlGrfico - Dom, 09/24/2017 - 09:30
Como cada domingo, les volvemos a traer las lecturas que nos han parecido más interesantes durante la semana. TOP 10 Estar corto de volatilidad es como cobrar por estar sentado sobre una bomba de relojería. Imprescindible Epsilon Theory sobre la inflación (audio).

Wall Street Recap: Part 2 - Vie, 09/22/2017 - 21:06

Part 2 of my full notes and analysis from the past two weeks: September 3-16, 2017.  Periodicals covered in this Wall Street Recap include the WSJ, FT, NYT, and LA Times.

The “Burned Cat” Phenomenon

Investors who get burned by an asset bubble often develop a learned apprehension towards that asset class, regardless of its future economics or valuation.  In other words, they go about acting like Mark Twain’s cat who, after sitting on a hot stove lid, never sat on a hot or cold stove lid ever again. (link)

Learned apprehension can lead to depressed asset prices as well as severe under-investment in new supply.

1) Depressed asset prices

Investors may develop an irrational resistance towards an asset which has burned them before.  Making them reluctant to invest, even at very attractive prices.  Example:

Elon Musk

Elon Musk experienced this “Burned Cat” phenomenon while working for a bank early in his career.  He found Brazilian debt trading for 25 cents on the dollar, which was guaranteed by the U.S. Treasury for 50 cents on the dollar.  He presented this investment idea to the Bank’s CEO who promptly rejected it saying, “the bank had been burned on Brazilian and Argentinean debt before and didn’t want to mess with it again.” (link)  Taken aback, Elon tried to explain that you couldn’t lose unless you thought the U.S. Treasury was going to default, making it an effective “no-brainer”.  The CEO still declined.

2) Severe under investment in new supply

During an asset bubble, investors eagerly build out new supply, over-extend themselves, and set the ground for their own demise.  Following the bust, investors may become hesitant to develop new supply, even when favorable economic tailwinds present themselves.  As a result, an industry that was once defined by chronic over-supply, can shift into one defined by chronic under-supply.  Examples:

Ethiopian Famine

This feast or famine industry cycle contributed to Ethiopia’s 1983-1985  famine.  Having been burned by  a bountiful harvest and low prices the year before, “Ethiopian farmers produced less grain and more cash crops or livestock, reducing food production in the following year.” (link)

Ireland Housing

Ireland’s real estate market is experiencing the after-effects of the “Burned Cat” phenomenon.  Leading up to the financial crisis, Ireland produced one of the most severe housing bubbles in the world.  The subsequent bust resulted in years of under-investment in new housing.  The country has since developed a chronic shortage of new homes and property prices are rapidly rising.

As the Financial Times described: (link)

“With Ireland facing a chronic shortage of homes and property prices again rising rapidly,”

“Builders are struggling to meet 10 years of pent-up demand for new homes, while rents are rising and Dublin faces a growing homelessness crisis.”

“Housebuilding, which declined to a trickle after the crash, has stepped up markedly yet acute strains remain.  Although private builders are projected to complete 18,000 homes this year, industry figures estimate 30,000 units will be required for years to come.”

“Figures this week showed annual property inflation on a national basis is advancing at 12.3 per cent.” 

Misjudgment underpinning the Burned Cat Phenomenon:

“Burned Cat” investments are influenced by a lollapalooza of human misjudgment, including:

  1. Extra-Vivid Evidence: Investors who have been burned by an investment won’t soon forget.
  2. Pavlovian Association: Through negative reinforcement, investors learn to reflexively avoid an asset class.
  3. Over-Influence from Authority: News coverage of a “burned cat” investment is likely to be prominent, negative, and pessimistic.
  4. Social Proof: No one else is investing in it, so that reinforces the notion that it’s the right thing to do.
  5. Bias from the non-mathematical nature of the human brain: Investors tend to naively extrapolate past returns which contributes to extreme valuations during bubbles and busts.

Investment Lesson: Actively look for assets that have burned investors.  They may present excellent opportunities due to;

  1. The market’s unwillingness to invest in the asset, even when favorable economics and valuations exist.
  2. Severe under-investment in new supply, which sets the stage for future supply shortages.  (Pay special attention to areas where supply cannot ramp up quickly.)
Standard Causes of Human Misjudgment

Social Proof: Rationalized/Normalized Terrible Behavior

At Home Among the Giants (link)

Wllie McCovey: “I tried working as a bus boy in a whites-only restaurant, but I quit after a week.  All the things that make you cringe was normal talk then.  You took it or you walked away.”

“The five most dangerous words in business are: ‘Everybody else is doing it’.” – Warren Buffett

Social Proof: Fear of Missing out

Leveraged Loans too Popular (link)

 “Some companies that reprice loans have cut debt-to-earnings multiples. But for many, nothing has changed other than the strength of investor demand for debt.

“When demand is strong, any investor that declines the lower yield risks seeing another buyer take their place, and many are battling to keep their money invested.”

Deprival Super-Reaction Syndrome

That Airline Seat You Paid for Isn’t Yours (link)

“Political commentator Ann Coulter…erupted in a Twitter tirade earlier in July after Delta moved her from a preferred aisle seat to a window seat in the same extra-legroom row.”

 “…passengers think they can buy the rights to a specific seat…Airlines say that legally, you don’t.”

Contrast Caused Distortion

Passive Migration: Denver Wins Big as Financial Firms Relocate to Cut Costs (link)

 “If you’re talking to someone who’s been in Denver, they’ll say it’s getting unaffordable, but if you’re coming from San Francisco, the reverse sticker-shock is wonderful,” said Ms. Droller. 

“And while Denver home prices reached a record in June, they are still far below San Francisco.”

Incentive Caused Bias 

Wall Street Needs You to Borrow Against Your Stock (link)

“Morgan Stanley’s finance chief said, ‘that the bank expects more clients to take out loans in the months ahead. ‘That’s been a real key driver of our wealth business.‘”

“The Massachusetts securities watchdog last year accused Morgan Stanley of developing a sales program that encouraged brokers to pitch these loans regardless of whether clients needed them.

“Several Merrill Lynch brokers said they have asked long-standing clients to open a securities-backed line of credit to help them hit bonus hurdles,”

“The guy tells you what is good for him…So you’re getting your advice in this world from your paid advisor with this huge load of ghastly bias.” – Charlie Munger

Lesson: Watch out for rapidly growing products and services on Wall Street.  They likely are associated with massive incentive-caused bias.

Consistency & Commitment Tendency

Wall Street Needs You to Borrow Against Your Stock (link)

Merrill Lynch brokers asked long-standing client to open lines of credit “assuring that clients wouldn’t need to use it or pay any fees for opening it.”

“Brokerage executives have said the longer a client has one of these loans tied to their account, the more likely they are to use it.”

“People think if they have committed to it, it has to be good.” – Charlie Munger

Lesson: Beware of commitments, even seemingly harmless ones.

Lollapalooza Effect: Examples

“I would say the one thing that causes the most trouble is when you combine a bunch of these (causes of misjudgment) together, you get this lollapalooza effect.” – Charlie Munger

LIBOR: Incentive Caused Bias, Pavlovian Association, Social Proof, Envy/Jealousy

The LIBOR was a terribly flawed benchmark.  It was easily to manipulate and bankers were highly rewarded for doing so.  Everyone around them was doing it, and they were all getting rich.  Hence, “studies have estimated that hundreds of trillions of dollars of financial contracts around the world were created based on the benchmark.

Libor: A Eulogy for the World’s Most Important Number (link)

“It turned out that banks were skilled at getting Libor to move in favorable directions.  After all, it was their employees who were guesstimating their borrowing costs, so it was simple enough to skew those figures in helpful directions.”

“But government investigations soon showed not only that manipulation was wide-spread and easy to pull off, but also that government officials and central bankers had known for years about Libor’s vulnerabilities but failed to act.”

“If you carry bushel baskets full of money through the ghetto, and made it easy to steal, that would be a considerable human sin, because you’d be causing a lot of bad behavior, and the bad behavior would spread.” – Charlie Munger

Fire Ants in Japan: Stress-Induced Mental Changes, Social Proof, Extra-Vivid Evidence

The sudden stress from the arrival of fire ants in Japan, along with extra-vivid coverage from the media prompted faster and more extreme reactions.  Furthermore, Social-Proof amplified the power of this reaction.

Evacuate the Sandbox! Japan Is Freaking Out About Fire Ants (link)

“The mild panic here is partly due to sensationalism in the mass media, with some reports falsely depicting fire ants as murderous,” said Mr. Hashimoto.

“Better safe than sorry, said one wrestler.”

“He drew a parallel in Japan’s experience with how U.S. fire ant infestations in the 1950s were caught up in fear about communism.”

“Shares of pesticide makers have surged on the Tokyo Stock Exchange, and one manufacturer started selling ponchos made from industrial-strength material that allegedly protects the wearer from fire ants.”

“He added, ‘It is necessary for everyone in the nation to recognize correctly the characteristics of fire ants and address the matter calmly.'”

“One consequence of this tendency is that extra vivid evidence, being so memorable and thus more available in cognition, should often consciously be underweighed while less vivid evidence should be overweighed.” – Charlie Munger

XIX Congreso del Partido Comunista de China

LaVueltaAlGrfico - Vie, 09/22/2017 - 08:06
Ya han pasado cinco años desde el cambio de poder en China, y el próximo 18 de octubre dará comienzo el XIX Congreso del Partido Comunista. Así, más de 2.000 delegados elegidos por los casi 90 millones de militantes del Partido Comunista de China elegirán a unos 300 miembros para el Comité Central. Éste se reunirá una vez al año.

Aventuras empresariales, el mejor libro de negocios del mundo (según Bill Gates) - Jue, 09/21/2017 - 16:47

Resumen y opinión de Aventuras Empresariales de John Brooks, considerado por Bill Gates el mejor libro de negocios del mundo.

La entrada Aventuras empresariales, el mejor libro de negocios del mundo (según Bill Gates) aparece primero en Academia de Inversión - Aprende value investing desde cero.

¿Lo conseguirá TripAdvisor? - Mié, 09/20/2017 - 21:14

¿Lo conseguirá TripAdvisor?

En la Conferencia de Inversores de azValor de este año, Álvaro Guzmán habló de la tesis de inversión en TripAdvisor (TRIP):

Como veíamos en la anterior entrada con el excelente análisis de Adrián Sánchez, el estudio de una empresa es profundo y detallado y llevará un gran esfuerzo.

Pero la tesis debe resultar sencilla, entendible.

Tenemos una pasión por mantener las cosas simples.

-Charlie Munger

La tesis de TRIP se podría resumir en los siguientes puntos:

Buen negocio

El negocio de la empresa es excelente y así lo muestran sus márgenes y su crecimiento.

Con los números normalizados TRIP tiene un margen bruto de más del 98%, el operativo cercano al 50% y neto de más del 20%. ROE de más del 25% y ROI del 17%.

Las ventas de la empresa han crecido sobre el 25% anual, apoyadas en la tendencia mundial del aumento del turismo.

Al fin y cabo la empresa está basada en una página web y una app móvil que le permite tener economías de escala a bajo coste, lo vemos en el siguiente punto.

Ventaja competitiva efecto red

El efecto de red ocurre cuando el valor de un bien particular o el servicio aumenta tanto para los usuarios nuevos como para los usuarios existentes, ya que más personas utilizan ese bien o servicio, creando a menudo un círculo virtuoso que permite que el fuerte consiga ser más fuerte.

Cuanto más usuarios utilizan TripAdvisor más ventaja competitiva tiene ya que le sería más complicado a un posible competidor entrar en el mercado.

Difícil transición

La transición de ser una web y app de consultas a una web de reservas, una OTA (Online Travel Agency) supone que los usuarios han de cambiar su percepción y experiencia de la empresa y esto es complejo, muy complejo.

Caja neta

La caja neta de la empresa es casi 2 veces su EBITDA normalizado y 6 veces las inversiones que está realizando.

Esto le permite una enorme flexibilidad para atajar o cambiar de planes si no se van desarrollando como planean.


TripAdvisor antes de iniciar esta transformación hace 3 años estaba haciendo $396M de EBITDA en 2014, que era creciente año a año, sobre unas ventas de $1.246M.

La inversión actual en el cambio a ser una OTA es de más de $100M al año y está haciendo un EBITDA de $264M en 2016, con unas ventas que vemos que han crecido hasta los $1.489M con lo que si eliminasen esa inversión de $100M estaría haciendo un EBITDA de $364M.

La empresa capitaliza $6.100M, restando la caja neta de $559M tendría un EV de $5.541M.

Así que si el plan de transformación de TripAdvisor en OTA es un completo fracaso, no aumentan ni un céntimo sus beneficios y tienen que olvidarse de la inversión volviendo al negocio que siempre han sido, la empresa estaría capitalizando a EV/EBITDA de 15x.

Cuando su media histórica ha estado entre 20x y 30x EBITDA y su principal competidor Priceline cotiza a 26x EBITDA .

Enorme potencial

Es difícil calcular lo que valdría la empresa si el plan de transformación le sale bien, ya que no podemos prever cómo actuarían los competidores.

Pero a priori no parece imposible lo que comenta Guzmán en el vídeo de multiplicar por varias veces su valor.

Posibilidad de OPA

TripAdvisor es pequeña en comparación con los dos competidores a los que se enfrentaría. Capitaliza $6.096M mientras Priceline $91.265M y Expedia $21.523M.

El plan de transformación puede hacer mucho daño a estos dos gigantes y en ese caso existiría una posibilidad real de que lancen una OPA para adquirir la empresa.

Accionista mayoritario

En 2012 el respetado John C. Malone se hizo con el control de TripAdvisor a través de su holding Liberty.

Este hecho no es garantía de éxito, pero da cierta tranquilidad tener como propietario a una figura de la talla de Malone.


Los riesgos de TripAdvisor pueden venir por ir perdiendo los contratos de sus clientes, Priceline y Expedia, cuando la vean como un competidor.

Pero el riesgo más importante, como casi siempre, es Google. Si escribís en Google Hotel Oviedo directamente te aparece una gran sección de Google Maps con el mapa, la puntuación y las OTAS para reservarlo. Con la inmejorable usabilidad a la que Google nos tiene acostumbrados.

La fortaleza de TripAdvisor contra el omnipresente Google es que el tráfico de sus usuarios navega directamente a TRIP, no a través de Google. Aunque parece que será insuficiente y entendemos que este riesgo ha sido uno de los motivos principales para que TripAdvisor trate de convertirse en OTA.


Si se quiere un informe detallado de TRIP aquí incluyo uno en profundidad.

Una tesis de inversión requiere de mucho estudio, pero la conclusión ha de ser sencilla.

Uno de los principales errores del inversor es creer que sabe más de lo que sabe. Como nos suelen recordar los grandes el problema no es lo que no sabes, ya que en ese charco no te vas a meter, el problema viene cuando crees que sabes algo que realmente no sabes, y te metes en charcos que cubren más de lo que pensabas.

Sobre TripAdvisor, estoy comprando una pequeña posición en mi cartera, pero sinceramente no creo que consiga lo que está ejecutando.

Ojalá me equivoque pero cambiar los hábitos de los usuarios es posiblemente lo más complicado para una empresa. Todos los recuerdos, usos, críticas e imagen que tenemos de TripAdvisor, aun siendo excelentes están lejos de lo que es una OTA en la que puedas reservar.

Pero esto es una opinión, y como comenta Guzmán, hasta aquí llegamos. No sabemos lo que pasará ya que es prácticamente imposible saber hasta donde triunfará el proceso de cambio y cómo actuarán los competidores, quienes recordemos son clientes actuales de TripAdvisor.

Pero la base de esta inversión es que aunque el plan de transformación no salga, la empresa vale más de lo que cotiza, simplemente con llevarla a EV/EBITDA 20 valdría el 25% más. Lo que nos parece adecuado, ya que históricamente, por el crecimiento y la calidad del negocio ha cotizado entre 20 y 30 veces EBITDA.

Aunque no hay que olvidar los riesgos provenientes de Google y ese ha sido el principal motivo por el que TripAdvisor no es una posición relevante en mi cartera.

¿Quieres leer más reflexiones como esta?

Consigue gratis mi ebook “¿Por qué invertir te va a cambiar la vida?” y descubre por qué deberías empezar a invertir en Bolsa.



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De psicología va la cosa

LaVueltaAlGrfico - Mié, 09/20/2017 - 08:29
No vengo a descubrir nada nuevo si afirmo que las finanzas conductuales o la parte psicológica de la inversión cada día es más importante en el mundo en el que vivimos. Ni que decir tiene que se considera estrictamente necesario unos conocimientos financieros profundos y una habilidad para entender y descubrir valor en ciertos negocios.

Why Selling a Big Position of Puts the Day Before the Crash of ‘87 was a great trade - Mar, 09/19/2017 - 21:02

Tada Viskanta saw a series of tweets I did when reading about the new book, “A first Class Catastrophe”  by Diana B. Henriques  which chronicles the 1987 crash, the largest one-day crash in U.S. Market history and he urged me to write up my experience at the time. While I have not yet read the book, in my tweets I reminisced about what it felt like to me. I was 27 years old and had been investing—or more properly—speculating in the market since age 21.

At the time, I was using a much different methodology for determining buys and sells then I do now, and I had, for several weeks before the crash, been accumulating a large put position on the OEX, which represented the S&P 100. The OEX and XMI where popular with options traders of that era and had the greatest liquidity for the options tied to them. Going into the crash, I had a larger position in puts than at any other point in my nascent career. I was sweating bullets, as many of them were deeply out of the money and my worry was they would all expire worthless, leaving me with a huge loss.

When I was 27, I already believed in a series of indicators that were mostly accurate, but I also paid great attention to the news and what people were saying about the future direction of the market. I watched as the markets roiled on Friday, October 16th, with the Dow losing more than 4.6% of its value.

I then made what at the time looked like the biggest mistake of my trading career—about a half an hour before the markets close on Friday, reacting to assertions that the market’s drop was way overdone and that we would see a huge snapback on Monday, I sold my entire put position.

Just so it really sinks in, I repeat, on the day before the biggest crash in history, I let my emotional reactions to what I was reading and hearing drive my behavior, and I sold every single put option that I had carefully accumulated over the previous several weeks.

Had I held, I would have made a not so small fortune. But I didn’t. Indeed, I barely broke even on the entire trade. But as I reflected and wrote about in my trading journal, I think that turned out to be the greatest trade in my life.

For that trade sent me down the road that led to where I am today—I concluded that my emotions were my worst enemy in the market and that listening to predictions from gurus and other prominent market forecasters was worse than useless, it was destructive. It also opened my eyes to how early reactions by the media to such momentous events are almost always spectacularly wrong. I still have many of the newspapers and Barron’s from that time, as well as news magazines, etc. re-reading them now shows how any early reaction is also primarily based upon emotions and utterly fails to put anything in correct context.

It was the best wakeup call I could have received. I resolved to begin searching for empirically supported investment strategies that withstood the test of time. It got me to understand that if I were to succeed over the long-term, I had to match my investment strategy to my time horizon. If I had 30 or more years to go to achieve my goals, I thought I should find out which strategies performed the best over much longer periods of time and which had the highest base rates of success against their benchmarks.

Most importantly, it cemented in me that while in many areas of life emotions were great, in the world of investing they were your worst enemy. And that only an unwavering discipline, devoid of any emotional override, would win in the end. Over the 30 years since the crash, I have witnessed time and again some of the smartest people in the world undone my making emotional investment decisions based on very short-term events.  This will never, ever change. Lest you think that rules-based, quantitative investing can solve this, think again. An analyst from a major Wall Street bank was visiting OSAM after the financial crisis and he noted that over 60% of quants overrode their models during the crisis. Remaining unemotional in my time as a portfolio manager has been one of the hardest things I have done, and yet, well worth it over the longer term. Oddly, it took the agony I felt selling my huge put position the day before the crash to teach me that agony, let alone any other emotion, has no place in implementing a successful investing career.    

And the Crowd Goes Wild… - Mar, 09/19/2017 - 12:55
On the Wisdom and Madness of CrowdsPhoto: PixabayWhen the markets fall and the streets run red, the lone wolf survives, but the pack dies.

In 1906, the British scientist Francis Galton made a discovery that would forever change our knowledge about group decision making. Before his revelation, Galton was of the opinion that the future of society could not be trusted to the less educated masses. He believed that a few select individuals were far better for the job. In order to test his hypothesis, Galton had people from all walks of life guess the weight of an ox at a country fair. After collecting 787 guesses and calculating the average, he realized the masses weren’t so dumb after all. Their collective guess was within 1 pound of the true weight. The Wisdom of Crowds by James Surowiecki shares Galton’s reaction to this discovery:

The result seems more creditable to the trustworthiness of a democratic judgment than might have been expected.

Ever since Galton’s realization, the evidence has been building for the wisdom of the crowd. This is especially true in investing, where markets behave in an efficient manner most of the time. Therefore, it is usually in your best interest to follow the crowd (i.e. accept market prices as fairly accurate). And why wouldn’t you? Social proof, as Robert Cialdini refers to it, is one of the most powerful psychological influences. This elevator prank and the Asch conformity experiments illustrate this well. However, though following the crowd will benefit you most of your life, it can also lead to financial ruin in particular moments. And that is what I want to talk about today.

When Crowds Get it Wrong

Despite the overwhelming evidence that the market is usually correct, there have been a handful of cases where the market consensus was grossly inaccurate. These errors typically occur during moments of high emotion (i.e. fear or greed) and they defy logic. As Edward Chancellor wrote in Devil Take the Hindmost (emphasis mine):

In his Theory of Cognitive Dissonance, Leon Festinger argued that people will tolerate increasing degrees of dissonance if they are motivated by a sufficiently enticing reward…A description of speculators in William Fowler’s circle during the 1860s provides an illustration of this behavior. They were engaged, wrote Fowler, “in bolstering each other up, not for money, for we thought ourselves impregnable in that respect, but by argument in favor of another rise. We knew we were wrong, but tried to convince ourselves that we were right.”

These kinds of errors occur when individual beliefs are lost in favor of the group’s beliefs. Gustav Le Bon summarized this idea beautifully in The Crowd: A Study of the Popular Mind:

The most striking peculiarity presented by a psychological crowd is the following: Whoever be the individuals that compose it, however like or unlike be their mode of life, their occupations, their character, or their intelligence, the fact that they have been transformed into a crowd puts them in possession of a sort of collective mind which makes them feel, think, and act in a manner quite different from that in which each individual of them would feel, think, and act were he in a state of isolation.

When the crowd starts to behave erratically and you start seeing behavior that you haven’t seen before, look out. See exhibit A:


For another example of crowd madness, let’s consider the tech bubble of the late 1990s. When looking at sentiment readings from the American Association of Individual Investors (AAII), bullishness hit a peak in early 2000, shortly before the bubble began to burst:

The mistaken bullishness on the part of the market is completely explained by the high expectations (i.e. hope/greed) of that era. However, the crowd can also get it wrong in the other direction as well. For example, the market bottom during the Great Recession in March 2009 coincides with some of the highest bearish sentiment on record:

This doesn’t imply that you can look at sentiment alone and figure out what the stock market is going to do next, however, sentiment may provide insight as to when markets are not behaving normally. As Cliff Asness from AQR capital stated:

I kinda get excited these days at the 150th percentile…to me [this represents] something that we’ve never seen before. I made this up, but it’s 150% of the prior 100th percentile.

When you are seeing multiple indicators at their extremes, you should take notice. I am not implying that you should change your actions, but realize that this is the same herd behavior that has dominated markets for centuries. Why is this important? Because when you can recognize that the crowd is mad, you can prevent yourself from following along and making large investment errors (i.e. selling during a panic). I don’t consider buying during a bubble to be an investment error because bubbles can take years to form. The foregone gains by waiting on the sidelines could be worse than the losses during the subsequent decline.

How to Resist the Crowd During Times of Panic

So how do you resist the madness of the crowd? Don’t deviate from your investment philosophy. My investment philosophy is more or less just keep buying and avoid risky assets that are not equities (i.e. gold, commodities, cryptocurrency). Don’t get me wrong, it can be hard to follow this when the social pressures start to mount. For example, I have a friend who invested 5% of his net worth in Bitcoin years ago. In the last few months his Bitcoin has grown to over 50% of his net worth. He is beating me. Maybe he is lucky. Maybe he is smarter than me. I don’t know, but I am not going to change what I do based on what the crowd is doing. Or, as a re-imagined Game of Thrones quote:

When the markets fall and the streets run red, the lone wolf survives, but the pack dies.

Be the lone wolf. Thank you for reading.

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The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice. The postings on this site are my own and do not necessarily reflect the views of my employer. Please read my “About” page for more information. is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to and affiliated sites.

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Wall Street Recap: Part 1 - Mar, 09/19/2017 - 08:08

Part 1 of my full notes and analysis from the past two week: September 3-16, 2017.  Periodicals covered in this Wall Street Recap include the WSJ, FT, NYT, and LA Times.

ROE & Customer Ignorance

Ideally a company’s product or service would increase in demand as its customers become less ignorant.  This is not always the case.  Some companies build their businesses upon the ignorance of their customers.  As a result, their moats decrease in direct proportion to the savviness of their customers.

Moats built upon ignorance have become increasingly tenuous as technological developments and market conditions have led to savvier customers.

Ignorance removal may occur with:

  1. Increasing competition.  A more challenging competitive environment increases the pressure for businesses to cut costs, which incentivizes ignorance removal.
  2. Early adapters and social proof. Early adapters who assess the benefits of less known products, may induce others to adapt later on.
  3. Declining search and discovering costs.  Low S&D costs lead to savvier customers.
Examples of Ignorance Removal

Honeywell (Increasing Competition)

China has become an increasingly competitive market for international businesses.  This is due in part to the improved quality of Chinese-made products  in conjunction with savvier customers. (link)

The fact that Honeywell’s struggles in China are related to the “savviness” of its customers and the quality of competing Chinese brands is disconcerting.

Football Helmets (Early Adapters, Social Proof, & Extra-Vivid Evidence)

The first football helmet from Startup firm ‘Vicis’, “tested better for safety than any helmet in NFL history.”  Yet only “about 50 of the league’s 1,700 players-roughly 3%-took the field in week 1 in a Vicis helmet,”

The rest of the league continues wearing helmets that have inferior safety ratings. Riddell and Schutt, who have long outfitted most NFL players, continue to dominate the market.

The resistance to the new helmet comes from:

  1. Consistency and Commitment: “They are loathe to change, because of the familiarity they have with the helmet they have been using all these years,”
  2. Bias from non-mathematical nature of the human brain: “Executives and players say NFL locker rooms are largely populated by men who believe long-term brain damage is something that will happen to someone else and who fear the consequences of any dip in performance due to an equipment switch.”

While the incumbents may benefit from these psychological tendencies in the short-term, it’s a tenuous proposition to suggest that, without sufficient improvements to their helmets, their moats will endure.  Early adapters and social proof will aid continued adoption of safer helmets.  Furthermore, extra-vivid evidence of any injury sustained with a Riddell or Schut helmet could drive wide-spread adaption of safer helmets.

Toys “R” Us (Declining search and discovery costs)

Highly reliant upon ignorant consumers, retailers and consumer brands have crumbled under the pressure of increasingly savvy-shoppers.  Having built their moats upon high search and discovery costs, they’re unable to withstand rapid declines in  consumer ignorance. Toys “R” Us is one such example.

“Industry-wide, toy sales have been strong in recent years, though much of the growth is shifting to online sellers like Inc. and discounters like Wal-Mart Stores Inc.  Amazon’s toy sales were up 24% last year, compared with 5% for the overall market and five years of declines for Toys “R” Us,”

Investment Lesson

Lesson: Beware of moats built on exploitation.  Seek moats built on reciprocity. 

A moat built around consumer ignorance is tenuous in nature.  For a long-term sustainable advantage, search for companies that would benefit from declines in ignorance.  Or as Charlie Munger might say, find companies that deserve to earn sustainable high returns on equity.  Companies who exploit ignorance don’t deserve it.

One of Charlie Munger’s three investment holdings is Costco.  Costco offers best in class service at best in class prices.  Both of which are highly valued by its customers.  Neither of which is easy to duplicate.  Hence, Costco deserves the favorable return it earns.

Checklist Question

Question: Would customers choose this company’s product or service if they were well informed and had access to their competitor’s products/services?

Drive for Efficiency Gains

Companies will accumulate operating inefficiencies as they grow.  When this growth inevitably slows or declines, companies may seek to expand margins by eliminating these inefficiencies.

Cycle: Growth —> Excess & Inefficiency —> Slowdown —> Drive for Efficiency Gains

Such strategies include;

  • Simplify management structure (eliminate bureaucracy),
  • Trim staff and eliminate redundant positions (can include industry consolidation),
  • Simplify product offerings,
  • Focus on core competencies (can include disposing of non-core assets),
  • Become more adaptive to consumer demands and industry trends,
  • Improve capital structure and return more cash to shareholders,
  • Close poorly performing stores.
Examples of Companies Seeking Efficiency Gains following a Slowdown


Problem: First Sales Decline after 13 years of growth.

“Lego said Tuesday that its revenue for the first half of this year fell 5% from a year earlier to $2.4 billion, its first revenue decline in 13 years.” (link)

“Lego (said) its organization had grown too bureaucratic ‘to support global double-digit growth.’…We have added complexity into the organization which now, in turn, makes it harder for us to grow further,”

Solution: Seek efficiency gains through cutting jobs, reducing layers of management, & speeding up product roll-out.

“We will build a smaller and less complex organization than we have today, which will simplify our business model in order to reach more children.”

“On Tuesday, Lego said it would cut roughly 1,400 jobs, with between 500 to 6000 of these coming from its Billund, Denmark, headquarters alone.”

“It is also working to reduce layers of management and administration to speed product rollout, which Mr. Knudstorp said can involve 20 teams on average before a product is ready for global launch.”

Eli Lilly

Problem: Experiencing Industry-wide Pricing Pressure & Expiring Patents.

“Health insurers and politicians have stepped up pressure on prices…” (link)

“Lilly cited a number of issues that are plaguing many drug makers, including the need to lower costs and raise investment in new drugs ahead of patent expirations that are expected to erode sales of older products.”

Solution: Seek Efficiency Gains through cost cutting and dramatic reduction in the work force.

“That has left companies leaning on cost cuts and efficiency improvements to drive profit growth.  The result is a dramatically shrinking workforce.”

“When the pressure gets heavy, the scrutiny turns to the size of a company’s payroll,”

“Drug companies have cut more than 269,000 U.S. workers since the beginning of 2007,”

Unilever & Nestle

Problem: Experiencing Shifting Consumer Tastes and Declining Sales.

“Amid this shift (in consumer tastes), sales from traditional players have flagged, spurring consolidation, cost cutting and restructuring.” (link)

Solution: Seek efficiency gains through Cost Cutting, Industry Consolidation, Restructuring (simplify product offerings), Boost Dividends, and Make Acquisitions to Accelerate Growth.

“In response (to activist posturing) the two consumer-goods firms (Nestle and Unilever) have focused on cost cutting and promises to boost dividends while going on the hunt for nimbler food and beverage brands with the potential to accelerate growth.”

“Nestlé, Unilever and other big companies in the sector are making (acquisitions) to catch up with fast-changing consumer tastes.”


Problem: Dealing with Major Corporate & Political Scandal, recently became the largest auto company, by volume, in the world.

“VW long pursued the industry’s crown, only to face billions of dollars in penalties related to a U.S. regulatory scandal.  It used software to cheat on diesel-emissions tests, a result of a growth-at-any-cost philosophy that claimed Detroit’s auto giants a decade earlier.” (link)

“We’re a big company and don’t have any interest in getting anymore bloated.” (link)

Solution: Optimize business through Restructuring (selling any business segments no longer considered critical).

“The company is open to talks and a new team is working to sell any businesses no longer considered critical.  These noncore assets account for as much as 20% of the company’s current annual revenue,”

“…in order to see how we can optimize our business,”


Problem: Expanded store count too fast and with too little consideration for cost.  Struggled with major shifts in the retail sector as well as disruptions in its supply chain.

“In 2012 and 2013, Aerogroup expanded to 125 retail stores, a ‘rapid pace’ that meant the company didn’t always get the best terms on leases, according to court papers.” (link)

“Last year, the company’s supply chain was disrupted when the sole sourcing agent in Asia stopped providing goods.  The interruption cost Aerosoles customers permanently, court papers said.”

Intense industry competition,” & “major shifts in the retail sector.“

Solution: File for bankruptcy production, close a majority of company stores, and (presumably) focus efforts on sales through department stores, online retail, and  home-shopping networks.

“Some 74 of Aerogroup International Inc.’s roughly 80 stores are candidates for immediate closure, with proceeds of the liquidation earmarked to help fund a continued sales effort, according to court papers.”

“In addition to its retail operation, the Aerosoles brand is sold at well-known department stores, on home-shopping networks and”

Changed in a “Big Way”?: Value of U.S. College Degrees

“You have to be thinking all the time to see if something has changed the game in a big way.” – Warren Buffett

For decades properties surrounding U.S. colleges had a can’t miss combination of limited supply and an ever increasing demand for degrees.  On several occasions I’ve been advised by successful real estate investors to buy college properties .  This was sound advice for decades, and may still be, but what if the game has changed in a big way? What if the demand for U.S. college has shifted dramatically lower, and with it, demand for university housing?  Two WSJ articles shed some light on these very real, yet uncommonly held concerns.

1) Americans Losing Faith in College Degrees, Poll Finds (link)

“Four years ago, (Americans without college degrees) used to split almost evenly on the question of whether college was worth the cost.  Now skeptics outnumber believers by a double-digit margin.

“Overall, a slim plurality of Americans, 49%, believes earning a four-year degree will lead to a good job and higher lifetime earnings, compared with 47% who don’t…That two point margin narrowed from 13 points when the same question was asked four years earlier.”

“Meanwhile, student debt has surged to $1.3 trillion, and millions of Americans have fallen behind on student-loan payments.”

2) U.S. Colleges Slip in Global Rankings (link)

“The U.S. continues to lay claim to more elite research universities than any other country in the world, but that dominance is beginning to fray.

“(This) marked the first year that schools outside the U.S. seized the two top positions in the 14-year history of the list.”

“This marked the fifth year of consecutive decline in the overall showing of the U.S.  This ranking listed 62 U.S. schools in the top 200.  In 2014, 77 U.S. universities ranked in the top 200.

“…there are clear warning signs and fairly significant flashing red lights that the U.S. is under threat from increasing competition,…Asia is rising.  It’s worrying time for stagnation for the U.S.”

“In recent years, Chinese universities have worked to internationalize their course offerings and attract more foreign students.  The efforts have paid dividends: in 2016, according to government figures, more than 440,000 foreign students were studying in China, with students mostly hailing from South Korea and the U.S.  That figure marks a 35% increase over 2012.”

“The rise of Chinese universities also comes as the Chinese Communist Party has invested heavily in research universities.”

Investment Implications

The tailwinds that favored college housing for the last 30 years have slowed.  If the demand for U.S. college degrees has indeed shifted downward, I’d expect demand to dry up in traunches, starting with third tier universities and moving on up.  This would imply that real estate around third and second tier universities is more vulnerable to a downward shift in demand, while first tier universities would fair relatively well.

Investment Lessons

Lesson 1: Insist on thinking things through.

It’d be far too easy to blindly follow the advice of a successful investor.  To avoid going terribly astray, insist on thinking things through.  Do not simply take an expert’s word for it.

Lesson 2: Look out for things that have changed in a big way.

In the past, college housing benefited from huge long-term tailwinds.  But as the famous investment clause suggests, past performance does not guarantee future returns.  Do not naively extrapolate past trends into the future.  Rather take time to assess what drivers will harm or benefit an investment moving forward.

Checklist Question

Question: Has anything changed in a big way?

Standard Causes of Human Misjudgment

Disliking Bias

Why China Can’t Stop Hating Japan (link)

“Beijing sanctioned a relentless diet of anti-Japanese propaganda.  A besieged party eager to rally the masses saw no better vehicle than reviving attacks on the ‘historical criminal,’ Japan.  Over time, policy towards Japan has become so sensitive that any Chinese official who advocates reconciliation risks career suicide.”

“If you [say] any nice words about Japan then you will get an angry reaction from students,”

Reciprocation: Role Theory

Why China Can’t Stop Hating Japan (link)

“Leaders in Beijing still use the idea of Japan as China’s enemy to rouse the citizenry.  The Japanese, seeing themselves depicted as China’s foe, have increasingly begun to act like one.”

“Sixth: bias from reciprocation tendency, including the tendency of one in a role to act as other persons expect.” – Charlie Munger

Bitcoin: Reinforcement & Social Proof

1) China Bans Digital Coin Offers as Celebrities Like Paris Hilton Tout Them (link)

“The losses haven’t deterred some (crypto currency) buyers, many of whom have made so much in other deals that they are eager to take more chances.

“In a year, he turned an in heritance of $80,000 into a couple of million dollars.  “It was pure luck, literally,” he said.  Mr. Bardi then put $1 million into Bancor, even as the price was falling”

“While Mr. Bardi said he is mindful of price swings, and isn’t willing to take a chance on another token offering, he said he believes in Bancor’s product and has no plans to sell.  “I’m not really touching it,” he added.”

“Nothing seduces rational thinking and turns a person’s mind in mush like a big pile of money that was easily earned.” – Charlie Munger

2) Bitcoin in sharp drop after Jamie Dimon ‘tulip bulbs’ barb (link)

“(Jamie Dimon’s) comments were dismissed by fintech executives who said Mr. Dimon had criticized bitcoin before but the currency continued to surge.”

“If you think about the doctrines I’ve talked about, namely, one, the power of reinforcement — after all you do something and the market goes up and you get paid and rewarded and applauded and what have you, meaning a lot of reinforcement, if you make a bet on a market and the market goes with you. Also, there’s social proof. I mean the prices on the market are the ultimate form of social proof, reflecting what other people think, and so the combination is very powerful. Why would you expect general market levels to always be totally efficient, say even in 1973-74 at the pit, or in 1972 or whatever it was when the Nifty 50 were in their heyday? If these psychological notions are correct, you would expect some waves of irrationality, which carry general levels, so they’re inconsistent with reason.” – Charlie Munger

Pre-suasion: Fear of Missing Out

Newport Beach precious metal dealer Monex accused of $290-million fraud (link)

A complaint against Monex, a precious metals investment firm, says that the company encouraged its sales force to use this ‘pre-suasion-esque’ sales pitch:

“If gold were to increase in value by $100 per ounce in the next year, and you had a 30% to 40% net gain, you’d feel pretty good, wouldn’t you?”

Uncertainty & Extra-Vivid Evidence

Florida Gas Stations Running Out of Fuel as Irma Threatens State (link)

The unknown path of Irma, along with extra-vivid evidence of its destructive power  induced widespread panic and buying across the entire state of Florida.  There’s an investing lesson in there somewhere.

Because of Irma’s unknown path, panic buying has been widespread in the state, rather than confined to a few counties…’You basically had all 67 counties with a run,'”

“This storm has the potential to devastate our state,” Rick Scott said (link)

Incentive Caused Bias

U.S. Colleges Slip in Global Rankings (link)

“Elizabeth Perry, a professor at Harvard and expert on China, said the Chinese are actively ‘gaming’ the system.  ‘They are hiring an army of postdocs whose responsibility is to produce articles,’ she said.  ‘They are changing the nature of a university from an educational institution to basically a factory that is producing what these rankings reward.‘”

Economic Warfare: Companies in the Crossfire

International disagreements and conflicts result in economic “attacks” much more frequently than they do in military attacks. Be careful that your investment doesn’t end up a casualty of economic warfare.

Examples of Recent Activity

Germany & Turkey: Germany threatens to cut aid to Turkey

“…prompting Berlin to issue a travel advisory for the country and threaten aid cuts.” (link)

“The two countries’ ties started fraying last year, after Germanys parliament adopted a resolution branding the killing of more than a million Armenians by Ottoman Turkey in 1915 and 1916 as genocide, sparking protests in Ankara.”

Saudi Arbia & Qatar:

“Saudi Arabia, the United Arab Emirates, Bahrain and Egypt in June severed diplomatic ties and closed their air routes and land and sea borders with Qatar to protest its alleged support for regional extremist organizations and terrorist groups.” (link)

USA & North Korea:

“A U.S. proposal for new United Nations sanctions would clamp an embargo on its oil and textile trade and slap a full asset freeze and world-wide travel ban on leader Kim Jong Un and key regime members and institutions.” (link)

“We are worried that cutting off oil exports will inflict damage on North Korea’s hospitals and an ordinary people,” Mr. Putin said

(De)Commoditized Flights

The statements below address what’s happening in air travel, but doesn’t address why.

“Passengers get into anything that flies if the ticket is cheap.”

“For a small fare difference, (passengers) still pick less-comfortable airplanes.  Airlines say cost is the No. 1 factor when evaluating new airplanes.” (link)

To draw the inference that customers only care about price would be misleading.  After all, price is the only factor in the purchase decision which customers can easily assess.  Factors such as comfort, amenities, and service are either not easily assessable or completely unknown.  So of course air travel has tended towards commoditization.  After all, why pay 20% more for a flight when I have no idea what I’m getting for the extra money?

Why not give consumers an easy way to objectively assess comfort, amenities, and service and see what happens?  If an American Airlines flight had an 87 rating on comfort, amenities, and service, I’m likely to pay up for that flight over one with a 62 across the board.  Or better yet, attempt to assign some dollar value to them.

Such a system would contribute to the de-commoditization of flights.  But as it stands, these factors are wholly unassessable, and thus, I’ll continue to be over-influenced by price.

“You need to have a passionate interest in why things are happening.  That cast of mind, kept over long periods, gradually improves your ability to focus on reality.  If you don’t have the cast of mind, you’re destined for failure even if you have a high I.Q.” – Charlie Munger

Various Fascinating Excerpts

Flood Insurance: Highly Skewed Losses

“(In Florida) Homes and other properties with repetitive flood losses account for just 2% of the roughly 1.5 million properties…But such properties have accounted for about 30% of flood claims paid over the program’s history.” (link)

The Economics of Politics

Here we are in the minority…and we’re dealing from strength because they don’t have the votes…Here the vote is the currency of the realm.  It’s all about having the votes.” – Nancy Pelosi (link)

“They’re the only two people who came to the meeting with a deal to be made.” – President Trump on cutting a deal with Democrats.

Demand Excellence

“‘The lesson’, he said, was that ‘if you don’t demand excellence, you’re not going to get it.'” – Don Ohlmeyer (link)

Censoring Social Media in China

“Last year, officials imposed stricter controls on (social media) apps, forbidding sexual content and original reporting during live-streams.  The government has also shuttered dozens of live-streaming sites and fined some hosts for obscene language.” (link)

“Mr. Li understands the government’s power to break stars, and said he had cleaned up his act to avoid trouble.”

Future of Augmented Reality

“A lot of people underestimate what is happening,..This is one of those things that is going to completely change the game in the next two or three years.  It’s like right before the Big Bang…It is definitely not a novelty,…This fundamental shift will change how we interact with computers, live our lives – and sell furniture.” – Michael Valdsgaard, head of digital transformation at Ikea, an early adopter of ARKit (link)

China credit expansion

“No other economy in history has grown this fast without confronting some kind of a big crisis.” (link)

Hilarious Foot-in-mouth moment

“Martin Schulz, leader of Germany’s Social Democrats, had some strong words for a Hamburg landlord planning a huge rent rise.  It was ‘daylight robbery’, ‘immoral’, the ‘unscrupulous exploitation of poor people’.” (link)

“But there was embarrassment in store for Mr. Schultz.  A presenter revealed that Ms. Braun’s landlord was a construction company owned by Hamburg City Hall – which is Social Democrat-controlled.  All 150 studio guests erupted in laughter.”

Artículos recomendados para inversores 209 - Lun, 09/18/2017 - 13:01

Recopilación de artículos recomendados para inversores en general y, en especial, para los seguidores del value investing, volumen 209.

La entrada Artículos recomendados para inversores 209 aparece primero en Academia de Inversión - Aprende value investing desde cero.


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