WorldlyInvest Weekly #9
How to spot hidden real estate gems; A rare interview with Seth Klarman; A remarkable arbitrage situation with 500% returns; Capital Cycle; Why unit economics matter.
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Quote of the Week
We tend to only make investments when we think there is a compelling opportunity being presented. And often we will hold a third or half in cash or even more, awaiting such opportunities.
— SETH KLARMAN
ICYMI
This interview provides a masterclass in value investing, capital preservation, and contrarian thinking.
The Best of the Week
Unearthing Real Estate Gems
Polymath Investor shares case studies on how publicly traded companies often hold undervalued real estate assets, which can present lucrative investment opportunities. Many companies—especially mid- and small-cap firms—have owned properties for decades, but accounting rules require these assets to be carried at historical cost, often far below their true market value.
Read the full case studies HERE
You Can’t Miss These Readings
The Wildest Arbitrage Story You've Ever Heard
Dirtcheapstocks recounts a remarkable arbitrage opportunity involving Middlesex Water Co. (MSEX) Preferred Shares (MSEXP). SPOILER: a risk-free arbitrage with a 500% return in minutes.
The Inevitable Capital Cycle
Todd Wenning explains the capital cycle with examples like the COVID pandemic and the bourboun industry.
Why unit economics matter when searching for multi-baggers
Kevin shares the importance of unit economics when evaluating companies with the potential to become multi-baggers.
Recommended Book
Capital Returns
Talking about the capital cycle…
This book, based on Marathon Asset Management’s reports, shows how capital flows into industries impact future returns, helping investors anticipate booms and busts. Capital Returns is an essential read for those who want to think beyond short-term earnings and grasp the long-term forces shaping investment returns.
Stock Ideas
Ashtead
TQI capital explores Ashtead Group (AHT), the second-largest equipment rental company in the world, and its recent struggles in comparison to its main competitor, United Rentals (URI).
AHT has faced headwinds due to the construction slowdown and increasing competition from URI.
Specialty equipment rentals and increasing rental penetration in North America could drive future growth.
Despite short-term struggles, the company’s growth strategy and valuation make it an attractive buy.
Kaspi
James Emanuel shares an in-depth analysis of Kaspi, a fintech giant based in Kazakhstan, which has transformed into a super-app integrating payments, banking, e-commerce, government services, and more.
The company combines elements of PayPal, Amazon, Klarna, American Express, Shopify, and Booking.com into a single ecosystem, making it an essential part of everyday life in Kazakhstan.
Kaspi is the largest payment network and second-largest bank in Kazakhstan. With over 14 million active users (out of a 20 million population), its engagement is among the highest globally.
Despite its dominance in Kazakhstan, the company remains undervalued compared to global fintech peers, trading at just 10x earnings with strong profitability and rapid growth (25%+ annually)
Robertet
Heavy Moat Investments with The Dutch Investors shares his two cents on Robertet, a French small-cap company specializing in natural flavors, fragrances, and active ingredients.
Generated €807.6M in revenue in 2024, growing 12% YoY.
High margins, disciplined capital allocation, and low debt levels.
Family-led company with the Maubert family controling 60% of voting rights.
Appreciate the mention