My two days at the
Value Investing Congress
in New York this week felt a little bit like speed dating.
I heard a lot of people talk in a short amount of time, each
one telling me about themselves and what they like. Some of them
I liked back. Others - not so much. By the end my head was
spinning, but I felt as if I was coming away with one or two
potentially meaningful relationshi-, er…investments.
Overall, my first Value Investing Congress experience was more
than worthwhile. Most of the 27 speeches that I heard in a
15-hour span were compelling, outside-the-box investment ideas
from some of the premier value investors in the world. A few
weren't so compelling. And then there was a presentation about
bitcoin from Cameron and Tyler Winklevoss… (I'll get to that one
in a minute).
Because the majority of the Value Investing Congress
presentations were enlightening, let's start with the good
Whitney Tilson's 82-slide dismantling of
, the creator of national online charter schools. The Kase
Capital hedge fund manager and co-organizer of the Value
Investing Congress slammed K12 for, among other things, fudging
student test scores, dismal academic results, woeful graduation
rates and even tax evasion.
"The entire business model is illegitimate," Tilson said in
the final, and perhaps most convincing, presentation of the
Tilson announced that he was short-selling K12. The stock has
since fallen 3.5%.
Another of my favorite presentations was Indian investor
Rahul Saraogi's contrarian case for investing in
his native country
. Eloquent, witty and passionate yet realistic about India's past
challenges, Saraogi made a pretty compelling argument for the
Saraogi says that India's economy should outpace the likes of
Europe, Japan, China and Brazil over the next 20 years. And he
called the country's currency problems an opportunity.
"India doesn't have a currency crisis," Saraogi insisted, "it
has a confidence crisis."
Meanwhile, one activist hedge fund manager feels that fixing a
broken company is as simple as replacing a few of its board
members. That's what Jeffrey Smith of Starboard Value talked
about in his speech, "
Using Board Dynamics to Enhance Returns
Smith's firm specializes in improving underperforming
companies by strategically replacing board members who were
"friends with the chairman." Instead, his firm aims to stock
companies' boards with industry experts who are focused on
delivering returns to the shareholders.
Starboard's strategy recently helped one small cap company
quadruple its margins, cut its debt by two thirds, and completely
reshape the business' focus all within two years. Smith's
approach is aggressive - but effective.
Not everyone is as dynamic a speaker as Saraogi or Tilson. One
seemingly endless stretch on Monday afternoon produced a bunch of
yawners that didn't strike much of a chord with me or my boss,
has spent more than four decades on Wall Street, and his track
record as a value investor is impressive. But his speech about
where markets go from here now that they're at all-time highs
didn't pull me in. Boyar shifted focus from the tech boom in the
'90s to the impending Chinese housing bubble to his favorite
Madison Square Garden (
The presentation was a bit rambling, and in the end I wasn't
sure what his overall thesis was.
If you've seen the movie
The Social Network
, then you're familiar with Cameron and Tyler Winklevoss.
They're the twin brothers who famously claimed to have come up
with the idea for
only to have it allegedly stolen by Harvard classmate and
eventual Facebook founder Mark Zuckerberg. The Winklevosses
subsequently sued Zuckerberg for damages, eventually settling for
tens of millions of dollars.
Now they have another idea:
an ETF that tracks the price of bitcoin
, an online form of currency with a fixed supply of money. In
essence, it's a fund that hasn't been created tracking a currency
that few people know about.
The Winklevosses stated their case for the bitcoin ETF as
eloquently as they possibly could. But as the long line of
questions at the end of their presentation revealed, most people
were skeptical. The idea of investing in an Internet currency
with no basis for "valuation" left an audience full of Warren
Buffett disciples scratching their heads.
Thankfully, the Winklevoss twins and bitcoin were among the
few lowlights of a conference chockfull of good ideas for value
I hope you've enjoyed our coverage of the
this week in
and on our web site. You can read our full notes from the