WorldlyInvest Weekly #8
Buffett's new letter; How to identify exceptional management teams; An spin-off case study; The acquisition of See's Candies by BRK; Stop using EBITDA; Markel it's not BRK.
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Quote of the Week
From BRK’s 2024 annual letter:
I was lucky enough to get an education at three fine universities. And I avidly believe in lifelong learning. I’ve observed, however, that a very large portion of business talent is innate with nature swamping nurture
— WARREN BUFFETT
ICYMI
Learn the importance of a good management team
The Best of the Week
Warren Buffett Annual Letter
The Oracle of Omaha acknowledges past mistakes in capital allocation but emphasizes the importance of swift corrections, a lesson instilled by Charlie Munger. Buffett also underscores Berkshire's financial strength, with $318 billion in cash, $171 billion in insurance float, and $287 billion in marketable securities, reaffirming the company’s long-term focus on equities. Looking ahead, Buffett reassures shareholders that Greg Abel will uphold Berkshire’s principles when he takes over as CEO, ensuring continuity.
You Can’t Miss These Readings
How This Investor Turned an Overlooked Spin-off into a 100% Return
In this cross-post by
with , Kris shares a spin-off case study on how to profit from forced selling and structural inefficiencies.Becoming Berkshire: 1972 - See's Candies
Once again,
delivers a great essay on Berkshire Hathaway. This time, he shares the history and acquisition of See's Candies by Berkshire Hathaway. A must read!The Great EBITDA Illusion
critices the widespread reliance on EBITDA as a profitability metric, echoing Buffett and Munger's skepticism, and questions why investors continue to accept these flawed financial representations.Recommended Book
Expectations Investingt
Happy birthday, Michael Mauboussin!
Stock prices reflect expectations—learn how to decode them with this book where Michael Mauboussin teaches how to analyze market-implied assumptions and find opportunities where reality may beat expectations.
Stock Ideas
Teleperformance-TEP.PA
provides an in-depth analysis of Teleperformance (TEP.PA), a French business process outsourcing (BPO) company.A leading global provider of BPO services.
Operates in over 80 countries, serving industries such as telecom, finance, healthcare, and retail.
Heavy investments in AI, automation, and advanced analytics.
Garrett Motion (GTX)
shares his investment thesis on this leading global turbocharger manufacturer with a strong market position in the automotive sector. This is a deep value play trading at a 40% discount:Major auto OEM supplier 60+ clients, including 9 of the top 10 global automakers.
Stable gross margins ~19%
~$412M in operating cash flow (LTM), supporting debt reduction and shareholder returns.
Markel Corp
The Brooklyn Investor examines the Mag 7 and their valuation compared to historical market norms.
Then he writes about Markel Corporation (MKL), a Berkshire Hathaway-like insurer and investment firm. An activist investor's push for changes in Markel’s strategy raises concerns, as MKL has underperformed both Berkshire Hathaway (BRK) and the S&P 500 over the last 5, 10, and 20 years.
Thanks for the share!