Thoughts on Investing
This manager commentary provides insight into our global, concentrated absolute value investing philosophy and the key tenets that have consistently underpinned our value investing approach.
The purpose of C&B Notes is to pass along ideas, concepts, stories, and information that are informing and influencing our worldview and “latticework of mental models.”
There is no substitute for being on the ground to assess how businesses are really performing. Accordingly, international and domestic travel is a critical component of our research. This Travelogue includes snippets from some of these international trips.
Jason Zweig’s retrospective look at one of his articles from the height of the Internet bubble serves as a useful reminder on a couple of fronts. First, buying assets at valuations that require aggressive projections to be met in order to yield a satisfactory long-term return has rarely been a successful investing strategy. Second, picking winners (and losers) in rapidly evolving industries, even ones with high recent growth rates and transformative potential, is notoriously difficult.
Supermarkets are notoriously difficult businesses with razor-thin margins, and cultural reasons make things even more difficult for operators in India. Small format convenience stores may be best suited to displace stalls and family owned kiranas, and some corporate chains are trying to entice these owner-operators to instead run stores under their banner – with the promise of better economics, of course. This model has worked well for Oxxo in Mexico.