Liberty Global: How a High-Conviction Idea Became a 165% Options Win Every so often, a trade comes along that perfectly illustrates why we pair special-situations research with smart options structuring. Liberty Global (LBTYA) was one of those trades. The underlying stock performed well (I still own it!), but the more interesting story is how [...]
The Founding of a Spin-off Machine Danaher (DHR) is one of the best performing stocks of all time. The stock has compounded at 21% per year for four decades. That works out to a 1,800x multiple on invested capital. 🤯 Since 2016, Danaher has spun off 3 separate public companies and has become a life [...]
How to Buy Your Favorite Stock at a Discount One of my favorite strategies for adding to a favorite stock is by selling puts. When you sell a put, someone is paying you cash today to buy a stock below its current price. What’s the catch? You must genuinely want to own the stock and [...]
A “SOTP” Horror Story Sum-of-the-part or SOTP analysis is a key tool that I use when analyzing a spin-off. Most conglomerates trade at a “conglomerate discount” and so SOTP analysis can be useful to understand if a spin-off will create value. However, SOTP analysis cannot be followed blindly. I just published a case study on [...]
Seth Klarman Special Situations Investing Case Study Seth Klarman, famous value investor and CEO of Baupost Group, was recently interviewed on the “Capital Allocators” podcast. It was a terrific interview, and I recommend listening to the full conversation. Today, I want to highlight a case study that Klarman walked through. I LOVE case studies. [...]