Wednesday, October 12, 2016

What We're Reading ~ 10/12/16

The Signal and the Noise: Why So Many Predictions Fail - But Some Don't [Nate Silver]

Shiller's powerful market indicator is sending a false signal [WSJ]

The consequences of risk taking [A Wealth of Common Sense]

A look at DaVita Healthcare Partners (DVA) [Rational Walk]

The AI revolution: why you need to learn about deep learning [Fortune]

What does Sam Zell know that Wall St doesn't? [Horizon Kinetics]

Profile of UK fund manager Neil Woodford [Bloomberg]

Interview with T-Mobile's CEO John Legere [Business Insider]

Liberty Media: better than Berkshire [Barrons]

The auto industry's real challenge [Strategy Business]

Mars cashes out Warren Buffett to take control of Wrigley [NYTimes]

Decoding Amazon's fashion ambitions [Business of Fashion]

How eBay's CEO plans to take on Amazon [Bloomberg]

Knowing when to break your own rules [A Wealth of Common Sense]

Why the cost of living is poised to plummet over the next 20 years [Singularity Hub]

Fairholme Capital Adds To Lands End Stake

Bruce Berkowitz's investment firm Fairholme Capital has filed an amended 13G with the SEC regarding its position in Lands End (LE).  Per the filing, Fairholme now owns 10.5% of Lands End with over 3.35 million shares.

This is an increase of 353,200 shares since the end of the second quarter when they owned 2.99 million shares.  The filing was made due to activity on September 30th.

Berkowitz originally received his stake in LE as a spin-off from Sears Holdings (SHLD), which he has been a big holder of for some time.

Per Google Finance, Lands End is "a multi-channel retailer of casual clothing, accessories and footwear, as well as home products. The Company operates through two segments: Direct and Retail. The Company offers products through catalogs, online at The Direct segment sells products through the Company's e-commerce Websites, international Websites and direct mail catalogs. The Retail segment sells products and services through Lands' End Shops at Sears across the United States, the Company's standalone Lands' End Inlet stores and international shop-in-shops. The Company's product categories include Apparel and Non-apparel. The Non-apparel category offers accessories, footwear and home goods. The Company provides embroidery, monogramming, gift wrapping, shipping and other services. In addition, the Company offers sheets and pillowcases, duvet covers and comforters, blankets and throws, mattress pads, towels, rugs and mats, school uniforms and shower curtains."

Tuesday, October 11, 2016

Lone Pine Capital Starts Expedia Position

Steve Mandel's hedge fund firm Lone Pine Capital has filed a 13G with the SEC regarding shares of Expedia (EXPE).  Per the filing, Lone Pine now owns 5.21% of EXPE with over 7.14 million shares.

This is a newly disclosed position for the fund as they did not show a stake back at the end of the second quarter.  The filing was made due to activity on September 29th.

Lone Pine has also been a longtime holder of fellow online travel agency, (PCLN). They've owned PCLN shares since 2011.

Per Google Finance, Expedia is "an online travel company. The Company makes travel products and services available, on a standalone and package basis, provided by various lodging properties, airlines, car rental companies, destination service providers, cruise lines and other travel product and service companies. Its Core OTA segment provides a range of travel and advertising services, through a range of brands, including and in the United States and localized Expedia and Websites throughout the world,, Expedia Affiliate Network,, Travelocity, Venere, Wotif Group,, and Classic Vacations. Its trivago segment sends referrals to online travel companies and travel service providers from its hotel metasearch Websites. Its Egencia segment, which also includes Orbitz for Business, provides managed travel services to corporate customers. Its HomeAway segment operates an online marketplace for the vacation rental industry."

Baupost Group Exits SunEdison Semiconductor Shares

Seth Klarman's investment firm Baupost Group has filed a 13G with the SEC regarding shares of SunEdison Semiconductor (SEMI).  Per the filing, Baupost now owns 0% of SEMI with 0 shares.

This is down from the previous 8.37 million SEMI shares Baupost owned at the end of the second quarter.  They no longer hold common stock and the filing was made due to activity on September 30th.

We've also highlighted other recent portfolio activity from Baupost Group here.

Per Google Finance, SunEdison Semiconductor is "engaged in the development, manufacture and sale of silicon wafers to the semiconductor industry. The Company also develops advanced substrates, such as epitaxial (EPI) wafers and wafers for the silicon-on-insulator (SOI) market, which enable computing and communications applications. Its products include polished wafers, EPI wafers and SOI wafers. The Company sells its products to the semiconductor manufacturers around the world, including integrated device manufacturers, pure-play semiconductor foundries and companies that specialize in wafer customization. It operates facilities in semiconductor manufacturing regions throughout the world, including Taiwan, Malaysia, South Korea, Italy, Japan, and the United States. Its wafers are used as the base substrate for the manufacture of various types of semiconductor devices, including microprocessors, memory, analog, mixed-signal and radio frequency (RF) integrated circuits, discrete and image sensors."

Kingstown Capital Trims Aerojet Rocketdyne Stake

Michael Blitzer and Guy Shanon's investment firm Kingstown Capital has filed a 13G with the SEC regarding its position in Aerojet Rocketdyne (AJRD).  Per the filing, Kingstown now owns 4.3% of AJRD with 3 million shares.

This is a decrease compared to the 3.5 million shares they owned at the end of the second quarter.

We've previously highlighted recent portfolio activity from Kingstown here.

Per Yahoo Finance, Aerojet Rocketdyne "designs, develops, manufactures, and sells aerospace and defense products and systems in the United States. The company operates in two segments, Aerospace and Defense, and Real Estate. "

Jeff Saut's Latest Market Commentary: Darvas Discipline

Market strategist Jeff Saut is out with his latest commentary entitled "Darvas Discipline."  He titles it so because he references Nicolas Darvas in a passage from his book, How I Made $2,000,000 in the Stock Market.

Darvas wrote,

"I knew that I had to adopt a cold, unemotional attitude towards stocks; that I must not fall in love with them when they rose and I must not get angry when they fell; that there are no such animals as good or bad stocks.  There are only rising and falling stocks - and I should hold the rising ones and sell those that fall.  I knew that to do this I had to achieve something much more difficult than anything before.  I had to bring my emotions - fear, hope and greed - under complete control ... I started to see that stocks have characters just like people.  This is not so illogical, because they faithfully reflect the character of the people who buy and sell them."

He then touches on the concept of tracking stocks with favorable technical setups but then only buying when they give a fundamental reason for doing so: improving earnings power.

Embedded below is Jeff Saut's latest market commentary: Darvas Discipline

For more, check out Saut's other recent commentary where he noted Steve Eisman thinks the US is destined for slow growth.