December Portfolio Snapshot, YI Exited

Here is the latest from Canadian Value investors!

• 111, Inc. Christmas Gift

• Portfolio Snapshot

• Other Things from Around the Web

111, Inc. Update (YI) – A Wonderfully Bizarre Christmas Gift (~35% return, silly 1000%+ IRR)

Disclosure: We no longer own this.

Back on November 1st we wrote about 111, Inc. Key insiders are looking to take the company private and relist in China. This is part of the ongoing wave of Chinese companies delisting from U.S. indexes and we have participated in and written about a few of these.

The stock was trading at ~$2.75 and insiders wanted to take it private for US$3.66 per ADR. Things were chugging along, with the Board’s special committee working away on their “independent” opinion with their advisors. However, the stock jumped above the offer to $3.70-$3.90 range on Tuesday. Why?

December 6th Update - 13Fs, MicroCap Conference, and More

Here’s the latest from Canadian Value Investors!

• Atlas Corp Update – Sold on spread elimination (~9% return, ~75% annualized)

• 13F Updates

• TSMC Taiwan Semiconductor Mfg. Co. Ltd. Notes

• Planet MicroCap Conference Day One Notes

• Our ESG Score is Terrible

Atlas Corp. NYSE:ATCO Update – Sold on spread elimination

As we noted in our October update, Atlas Corp insiders announced they were taking the company private.

“Atlas is effectively owned by the Washington family and Fairfax Financial. Now, Sokol, Fairfax, and friends (68% of shares) want to take it completely private to have the upside for themselves. The offer was recently increased to US$15.50 and is still trading at US$14. It still requires independent Board Member sign off and also shareholders.”

Things have continued to move along, and the spread has now largely closed; it is expected to close by mid-2023 and we view the remaining return as too low to keep holding. In turn, we sold around $15.30 for a total return of ~9% in 1.5 months or 75% annualized. Not so bad.

13F Updates – Most Notable Changes

As we have talked about frequently, looking at what great investors are buying is like bowling with bumpers, and the best source is 13-F filings. Background here - https://www.canadianvalueinvestors.com/cloning-investments-101

These are updated every quarter. There is not always something worth talking about; we only talk about the most notable trades. Here are the ones that caught our attention.

Here’s to the crazy investments

“The trick in investing is just to sit there and watch pitch after pitch go by and wait for the one right in your sweet spot. And if people are yelling, ‘Swing, you bum!,’ ignore them.” – Warren Buffett

We always try to write about – and invest in – only the most interesting things we find. The problem is we are going through a lot of companies that do not meet our hurdles. Thankfully, we enjoy this work. But my goodness, the hit rate of interesting-to-not is low. Real low. This article was prompted by the 100th pass of the weekend.

And so, today we want to highlight some of the companies we recently went through to share our pain of the investing process, and maybe give some of our readers insight into what we do, or maybe try not to do.

We will caveat this piece by stating a few things. First, we hold no positions in any of these companies. Secondly, we do not know any of these companies very well (we only learned about the existence of many of them this weekend). And third, they are all outside our circle of competence. We wish their investors well.

Q3 Earnings Releases - Here are the most important third quarter updates on our holdings

Here is the latest from Canadian Value Investors.

Q3 Updates on:

• Whitehaven Coal – The Coal Train Rollercoaster

• MEG – Buybacks good, and the Oilsands Alliance invoices are coming

• Suncor – Teck deal thumbs up

• Supremex – What a first month

But first, a few things from around the web:

The Crash of Crypto and FTX – The fall of FTX reminds us of the bucket shop speculation craze in the 1800s/early 1900s. FTX’s collapse is quite something. “It’s not like a normal [bankruptcy] filing where you’re lining up papers literally for weeks,” said Eric Snyder, chair of the bankruptcy department at law firmWilk Auslander, which isn’t part of the case. “Within 24, 48 hours this was on the ropes and done.” Yikes. Pretty wild for a firm that was valued at $32 billion. https://www.bloomberg.com/news/articles/2022-11-13/ftx-falls-into-bankruptcy-so-fast-court-papers-get-left-behind

John Hempton on FTX collapse – “In some sense crypto provides fast-track learning as to why we have banking and broker regulation in the first place.” http://brontecapital.blogspot.com/2022/11/ftx-and-old-blog-post.html

Andrè Kostolany: The Great Stock Market Operator Never Heard Of – An interesting overview of a man who made a fortune in things like defaulted German and Soviet Union bonds. “I am an oversea trader. I trade what others oversee.” (Andrè Kostolany) - https://undervaluedjapan.substack.com/p/andre-kostolany-the-great-stock-market

François Rochon of Giverny Capital Inc. Interview – “My rule of three: One year out of three the stock market will go down, one stock out of three that you purchase will be a disappointment, and at least one year out of three you will underperform the index. I think when you accept that the start you deal better with market fluctuations and mistakes you make with securities.” https://podcasts.apple.com/ca/podcast/we-study-billionaires-the-investors-podcast-network/id928933489?i=1000585977081