Thursday, September 7, 2017

What We're Reading ~ 9/7/17

The more comfortable you are buying something, the worse the investment's gonna be [Meb Faber]

36 obvious investment truths [A Wealth of Common Sense]

What do the best investors do that the rest don't? [Behavioral Value Investor]

Linear thinking in a non-linear world [Harvard Business Review]

How to retain more from the books you read [Medium]

Global growth still at record rates for this expansion [FT]

We need to stop pretending the autonomous car is imminent [Recode]

This is why WeWork thinks it's worth $20 billion [Backchannel]

Is $2 billion the new rate for an NBA franchise? Don't count on it [ESPN]

How YouTube perfected the feed [The Verge]

How built an e-commerce powerhouse in the Middle East [HBR]

Career advice from Facebook's Sheryl Sandberg [Inc]

Get 1% better everyday [James Clear]

Trian Partners' Procter & Gamble Presentation: Revitalize P&G Together

Nelson Peltz's activist firm Trian Partners recently put together a slide deck on their Procter & Gamble (PG) position entitled "Revitalize P&G Together."

They note that organic sales growth has underperformed peers such as Unilever, Reckitt Benckiser, Henkel, Arm & Hammer, and others.  Also, volume growth has trailed peers like Clorox, Church & Dwight, etc.

Trian's initiatives for the company include regaining lost market share, ensure management's productivity plan delivers results, develop small mid-size local brands, make M&A a growth strategy, win in digital, and improve corporate governance.

They outline their plan for the company and highlight all the issues the company is facing in their slidedeck.

Embedded below is Trian Partners' presentation on P&G:

You can download a .pdf copy here.

ValueAct Capital Increases KKR Stake

Jeff Ubben's firm ValueAct Capital has increased its stake in KKR (KKR) per an amended 13D just filed with the SEC.  ValueAct now owns 7.5% of the company with over 35.15 million shares.

The filing notes they were out buying on August 22nd through 25th, as well as the 28th through September 1st, and on September 5th as well.  In total, they acquired 6.6 million shares.  They were buying between $18.42 and $18.98.

Ubben's firm also holds cash settled swaps with respect to 10.4 million common shares that aren't included in 35 million shares they own.

ValueAct has made quite a few portfolio adjustments recently and we've highlighted more of them here.

Per Google Finance, KKR is "a global investment firm that manages investments across multiple asset classes, including private equity, energy, infrastructure, real estate, credit and hedge funds. The Company's business offers a range of investment management services to its fund investors, and provides capital markets services to its firm, its portfolio companies and third parties. The Company conducts its business with offices across the world, providing it with a global platform for sourcing transactions, raising capital and carrying out capital markets activities. The Company operates through four segments: Private Markets, Public Markets, Capital Markets and Principal Activities. It operates and reports its combined credit and hedge funds businesses through the Public Markets segment. The Capital Markets segment consists primarily of its global capital markets business. Through its Principal Activities segment, the Company manages the firm's assets and deploys capital."

Wednesday, September 6, 2017

Ray Dalio's TED Talk on Idea Meritocracy

Bridgewater Associates founder Ray Dalio gave a TED talk on what idea meritocracy looks like at his hedge fund.

The talk focuses on how to build a company where the best ideas win.  Dalio talks about algorithmic decision making and his history as an investor and how he began to learn from his mistakes.

He would write down his lessons and it became a set of principles which eventually were developed into algorithmic decision making.  Dalio has also recently published a brand new book, Principles.  

He notes, "In order to be an effective investor, one has to bet against the consensus and be right."

Dalio walks through the biggest mistake he ever made and how it made him ask himself in any future decisions: "How do I know I'm right?"  He gained humility.

The Bridgewater founder also takes us inside a meeting at Bridgewater and shows how they collect data on each person's ideas and believability.  Dalio says they do this because people naively and arrogantly hold opinions in their mind that are wrong.  But if you zoom out and gain perspective, you can see things through everybody's eyes and view things collectively. 

"Collective decision making is so much better than individual decision making if it's done well.  It's been the secret sauce behind our success."

Embedded below is the video of Ray Dalio's TED Talk:

Be sure to also check out Dalio's brand new book, Principles.

Pershing Square To Sell Entire Nomad Foods Stake

Nomad Foods (NOMD) today issued a press release stating that they were commencing an offering of 33.33 million shares from Bill Ackman's Pershing Square.

This means that Pershing is selling its entire stake in the company and will no longer be a shareholder.

For more from this hedge fund, we've also posted up Pershing Square's Q2 letter.

Per the press release, Nomad Foods is "a leading frozen foods company building a global portfolio of best-in-class food companies and brands within the frozen category and across the broader food sector. Nomad Foods produces, markets and distributes brands in 17 countries and has the leading market share in Western Europe. The Company’s portfolio of leading frozen food brands includes Birds Eye, Iglo, and Findus."

Tuesday, September 5, 2017

ValueAct Capital Increases Seagate Stake Again

Jeff Ubben's activist firm ValueAct Capital has filed an amended 13D with the SEC regarding its stake in Seagate Technology (STX).  Per the filing, ValueAct now owns 7.4% of the company with over 21.45 million shares.

Per the filing, ValueAct was buying STX shares on August 23rd through 25th, as well as the 29th and 30th.  In total, they bought 458,600 shares and paid around $31 for the bulk of the buys.

Also, the 13D notes that ValueAct and Morgan Stanley entered into a stock purchase agreement (10b5-1 plan) where MS will buy for the account of VA up to 6 million shares of STX stock.  Purchases can begin as soon as September 1st and will terminate no later than October 31st.

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

Per Google Finance, Seagate Technology is "a provider of electronic data storage technology and solutions. The Company's principal products are hard disk drives (HDDs). In addition to HDDs, it produces a range of electronic data storage products, including solid state hybrid drives, solid state drives, peripheral component interconnect express (PCIe) cards and serial advanced technology architecture (SATA) controllers. Its storage technology portfolio also includes storage subsystems and high performance computing solutions. Its products are designed for applications in enterprise servers and storage systems, client compute applications and client non-compute applications. It designs, fabricates and assembles various components found in its disk drives, including read/write heads and recording media. Its design and manufacturing operations are based on technology platforms that are used to produce various disk drive products that serve multiple data storage applications and markets."