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Showing posts from December, 2020

The Crux of Small Caps

" Keep all your eggs in one basket, but watch that basket closely."   – Warren Buffett As 2020 comes to an close, I would like to do a holistic reflection on the year that has passed and more importantly, look at how 2021 can be an even greater year of learning.  First and foremost, I have to thank Tristan Waine and Anthony Shi. These fellows are the most passionate, intelligent and generous value investors that I have met. Thank you for sharing the knowledge you have, focusing on the mission and paving the way for another one of your breed. I am deeply grateful, so thank you gents.  In 2020, my value investing strategy became centred on having a concentrated portfolio of mainly high-quality small caps with conviction dictating portfolio sizing. The portfolio will have exceptions for larger sized companies with long runways. All of the portfolio constituents will also be held, long-term, with the intention of obtaining "multi-baggers" and "outsized returns....

Playing Offensive in a Defensive Business

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Summary AFL is a ‘New Law’ firm growing in the realm of 50% p.a. looking to rival and disrupt the incumbent ‘Big Law’ firms. AFL is a stock is potentially overlooked; its financial performance is obscured by the nature of its historical data. It is trading at a P/E of 65x based on statutory earnings but it’s P/E based on normalized earnings are in the range of 16 – 20x. Management have demonstrated an ability to allocate capital via acquisitions. Business Summary AFL, also known as Australian Family Legal, is a firm that provides specific advice to clients in respect to divorce, separation, property, child custody and ancillary services such as litigation and estate planning. AFL has become the largest specialized family law firm and is seeking to become the most dominant player in the fragmented market of family law. Currently, there are neither national competitors nor leaders in this market. The company has an insurgent mission to disrupt the business models of traditi...