One way to invest in "control situations" as a small investor is to piggy-back on other larger investors. There's an interesting situation in HK at the moment. The company is China Merchants China Direct Investment. The ticker is 00133. This is a closed end investment company with an NAV per share of HK$30.50 and a share price of HK$14.60. The controlling shareholder only holds 27% of the equity.
A HK hedge fund, Argyle Street, is trying to force the company to sell its listed investments and distribute cash to shareholders. A recent shareholder vote at the AGM where Argyle tried to remove a director was very narrowly won by the company, but since then Argyle has increased their stake.
There is another shareholder vote due in November to re-appoint the asset manager, but this time the major shareholder will not be able to vote due to conflict of interest.
The BYD/Tesla market reaction is a great example for how different the market treats China vs US companies, which makes one think that China is still a massive underweight for most investors
China is a massive underweight for most investors, but this is mainly due to negative sentiment rather than fundamentals and sentiment can change very quickly.
Great article. I always quietly enjoy your updates.
On Buffett - he pursued so many different investment styles with amazing success, and that is why I think his example remains mercurial. He changed with the times and, as you rightly mentioned, with his capital base. To copy him is, in some way, to not learn from him. People see in him what they want to see, myself included.
One way to invest in "control situations" as a small investor is to piggy-back on other larger investors. There's an interesting situation in HK at the moment. The company is China Merchants China Direct Investment. The ticker is 00133. This is a closed end investment company with an NAV per share of HK$30.50 and a share price of HK$14.60. The controlling shareholder only holds 27% of the equity.
A HK hedge fund, Argyle Street, is trying to force the company to sell its listed investments and distribute cash to shareholders. A recent shareholder vote at the AGM where Argyle tried to remove a director was very narrowly won by the company, but since then Argyle has increased their stake.
There is another shareholder vote due in November to re-appoint the asset manager, but this time the major shareholder will not be able to vote due to conflict of interest.
thanks i am going to check this out!
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The BYD/Tesla market reaction is a great example for how different the market treats China vs US companies, which makes one think that China is still a massive underweight for most investors
China and Europe are probably the least bought geographies in the last two years.
China is a massive underweight for most investors, but this is mainly due to negative sentiment rather than fundamentals and sentiment can change very quickly.
Great article. I always quietly enjoy your updates.
On Buffett - he pursued so many different investment styles with amazing success, and that is why I think his example remains mercurial. He changed with the times and, as you rightly mentioned, with his capital base. To copy him is, in some way, to not learn from him. People see in him what they want to see, myself included.
check $ORLA mining company if you see why Prem Watsa has been buying that one Quater after Quater.. about 17% of NAV
heard it seems expensive, but he keeps biying it..
The hedge fund has set up a website to explain their strategy.
https://unlockvaluechinamerchants.com/about-us/