The blog has moved to Substack

Hi everyone, Thanks for following along on the blog so far, the nearly two years of Superfluous Value have been some of the craziest in market history. I have been approached by Substack to take my blog onto their platform and after scoping it out and taking the advice of several bloggers much more experienced

Antero Resources: How to 20x Your Money (After a 96% Drawdown)

That’s amazing Guy, you added near the bottom, right?

Glad you asked… of course I didn’t.

Following Up Ping An

On balance, I still believe Ping An is too cheap and has an exceptional, probabilistic-weighted return. However, given the wide dispersion of macro risks and opacity of the Chinese financial system, it is also unsuitable as a concentrated position and should be sized according to large impairment being one possible outcome.

Lloyds Bank: Worth the Pain

If there is a developed market that has been loathed to the point of total indifference, it is the UK. Between the initial Brexit horror, the slumping Pound and ongoing political shambles, investors have gone through all the stages of grief and with good reason.  Within the UK market, the financial sector has been particularly

Barrick: The Best Hedges Are Those You’re Paid To Take

If you are hunting for a sector that is a long way off its highs in the midst of a bull market in just about everything else, look no further than precious metals. I have a 4% weighting in Barrick Gold, but I view it very differently to many stock pickers and am aware there

Dilutive times at AMA

I see AMA as too cheap for its post-Covid fundamentals, but being priced as if the lockdown hangover will be permanent. If the company hits $1b in revenues in its first pandemic unaffected year (now likely to be FY23) and achieves historic EBITDA margins of around 9-10%, we can expect normalised EBITDA of $90-100m in short order.

Ping An: Growing Like a Weed, Priced to Liquidate

Ping An is selling for 70% of the current Embedded Value of the whole group, implying that it is not only being wound down, but the pieces only recouping 70c on the dollar. Given that group EV has doubled in the last five years, and is showing no signs of slowing, this is just fanciful.

Value Traps: The Price of Admission and Shinsei Bank

Most of my holdings have been considered value traps by the market at one point or another (many of them right now). Likely, some of them will indeed turn out that way- I’m just not sure which ones yet.

Saipem’s H1 Results: A Brief Update

You’ve got to love European energy services- energy prices fall and they fall, and then energy prices rise… and they fall more.

The Leverage Sweet Spot

For industries where Enterprise Value (EV) metrics are the preferred valuation method, the Private Equity model of “leveraging up the balance sheet”, has proven extremely effective over time. Mimicking this strategy in the public markets has been claimed by numerous value funds, but has been best quantified and popularised by Dan Rasmussen of Verdad Advisors.