Sinewave Securities

Book starts with an overview about the investors and their common and uncommon practices. Some of the names include John Bogle, Peter Lynch, Buffet, Munger, Bill Miller etc . The introduction “Inside the minds of greatest investors” suffice the crux and has good collection of quotes and aphorisms. From Bill Miller’s “It’s all probabilities. There is no certainty.” to Bill Raune’s investing principles from Buffet and Munger’s bridge hypothesis to Thorp’s psychological edge. “There are many ways to win, but they all require some form of edge.” Focus in not only to be richer, but happier and wiser as well and to build a life imbibed with meaning which transcends money. Ruane in 2001 had 35 percent of Sequoia’s assets riding on a single stock: Berkshire Hathaway. It had fallen out of favor during the dotcom craze, and Buffett, its chairman and CEO, was lambasted for losing his touch. Yet Ruane saw what others missed: a wonderful company with superior growth prospects run by the smartest gu...

Nomad’s Stagecoach, Conseco and Keynes Conseco went bankrupt after losses in its manufactured housing loan securitisation trusts impaired capital at its insurance company and A.M. Best, the insurance industry rating agency, declared the business inadequately capitalised. Our analytical mistakes were multifarious, but the most serious was to  anchor on analysis at the time of purchase to justify continued holding.  The immediate dollar loss was around U$5m for investors in Nomad. However,  the opportunity cost loss, the dollar loss adjusted for subsequent Nomad performance  (a fairer reflection of real costs) is around U$10m. Stagecoach was a success in the sense that shares purchased at 14p were sold at a high of around 90p. That is until one looks in the Financial Times to be reminded that the shares currently trade above £2.50. The mistake was to leave £1.60 on the table and was also caused by anchoring on the original purchase  decision analysis   ...

The Nomad Investment Partnership was launched in early September 2001 and began investing on September 10 th  with Nick Sleep and Qais Zakaria as leading fund managers.  Nick Sleep along with Qais Zakaria ran Nomad Partnership successfully for 14 years and compounded the wealth of their partners at 25% CAGR. His letter to shareholders holds wisdom which is tough to grab and even tougher to implement. I have included some case studies and some behavioral finance guidance explained by Nick in layman language. 2001 Philosophy “When we evaluate potential investments, we are looking for businesses trading at around half of their real business value, companies run by owner-oriented management and employing capital allocation strategies consistent with long term shareholder wealth creation.” Eg - International Speedway  – In discounting growth of just 3% to 4% the market valued the business as if it was just an average firm, when in our opinion International Speedway is a r...