“Nerve-racking pain and teeth-pulling strain“ Let’s list the 2018 Razzie Nominations!


7 January 2019

“I am so clever that sometimes I don’t understand a single word I’m saying,” wrote Oscar Wilde. As 2018 closes and after a particularly difficult year, I must admit that Oscar’s words resonate within me.  I’d like to look back at what transpired during a year that has been both a nerve-racking and agonizing Catch-22 of a year for us investors. It was like a trip to the dentist to have your teeth pulled. I generally like to avoid that kind of pain, but this time it was just not possible.

That’s why, with the dentist’s drill in my mouth, I’d like to announce the three Razzie Nominations of 2018:


  1. December 2017 email review – I wrote:

“In terms of numbers, Aryzta is a “special situation” investment textbook case. We started to initiate a small position. If the group loses non-core activities and its debt reduces by EUR 1 bn, and if the American business stabilizes, the instrinsic value per share could reach CHF 50 midterm vs. 32 today.”

Very special indeed!  After a deep-discounted rights-issue, the stock is now barely above CHF1 – down more than 80% in 2018!


  1. January 2018 email review – I wrote:

“CEO Anton Affentranger, presented Implenia, a company the Fund has been invested in since 2010. Tony gave a very compelling presentation of the building group, which since our initial investment has increased its international footprint, demonstrating the uniqueness of its business model & the accent it puts on sustainability.”

Not so! CEO change in October – and “kitchen sink” with big provisions announced for FY2018. The stock lost 50%.


  1. July 2018 email review – I wrote:

“Has Kuehne got its mojo back?” asked a fellow analyst in a recent research update on the Group. He had argued a few months back, that the Group experienced some margin pressure and that the M&A story “lost some teeth”. I’d like to argue that most M&A deals are like losing wisdom (teeth!). It’s like your dentist telling you: “Sorry your wisdom teeth are about to be painfully ripped from your gums and you’re paying money for it”. As for margin pressure, my feeling is that this is only temporary in nature, as turnover is currently growing double digits. My take is that Kuehne has MOJO, and never lost it in the first place.

Not so! The stock is down 18% since end July and re-reading my review of the company is certainly as painful as having your wisdom teeth pulled.


In spite of all this, we should not let Mr. Market’s sudden depressed mood drag us down!  Yes, certainly, we have encountered a serious correction in Q4/2018, but from the analyses I have recently carried out as well as my regular visits to our corporates, I observed a strong surge in CAPEX (capital expenditures) investment in the first half of 2018. At the end of the first semester in 2019, the comparison with 2018 may well look steep and some market operators may have to revise their results’ estimates down a bit.

Experience shows that Mr. Market generally anticipates these type of moves, as seems to be the case here. Having done my due diligence, I calculate the intrinsic value of my portfolio to be some 20% above the current level.  There are currently many more buying opportunities and, furthermore, some of our corporates are even as low as 50% below their intrinsic value. We have not observed this kind of scenario for many years.


And let’s just remember that “Winter is a season of recovery & preparation”. Paul Theroux