58. Elaborating on earlier, consider Teledyne. Earnings fell in half from 1973 to 1974 because of problems at one of its subsidiaries, Argonaut, related to medical malpractice insurance. Stock took a beating, and the co. took the opportunity to tender for huge chunks of shares.
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69. Of course, I cannot prove any of this was done intentionally. I’m not suggesting it’s a matter of fact. But from the info I have been able to piece together, and noting Singleton’s genius in using reflexivity to build Teledyne, it’s an idea that makes sense to me.
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Sources for those who care: https://www.valuewalk.com/wp-content/uploads/2014/11/leon-cooperman-value-investing-congress-henry-singleton.pdf … https://www.nytimes.com/1975/06/17/archives/argonauts-malpractice-premiums-in-74-amounted-to-35million-claims.html … https://www.nytimes.com/1975/06/08/archives/for-argonaut-profits-proved-illusory.html … https://www.milbank.org/wp-content/uploads/mq/volume-55/issue-02/55-2-The-Malpractice-Controversy-and-the-Quality-of-Patient-Care.pdf … https://news.bloomberglaw.com/mergers-and-antitrust/loews-must-face-suit-alleging-pipeline-stock-option-gamesmanship …
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70. Ken Fisher shouldn’t be shamed for discussing the use of LSD. Investing is a creative field more than a scientific one, and certain drugs do boost creativity by helping you make unique connections. I wish more investors would talk about how drugs influence their investing.
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71. If you pay up to invest in moats you should be careful not to drown in them. If a company’s moat begins to degrade, you can get a deadly combination of decreased earnings power and multiple compression. All of a sudden the sure thing becomes a sure loser.
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Screwed up my chaining. Thread continues here. https://twitter.com/laforeverhall/status/1207885870843318272?s=21 …https://twitter.com/LAForeverHall/status/1207885870843318272 …
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games to issue equity at high prices are two sides of the same coin.
Both are legendary to me for seeing narrative & sequence as capital to allocate.