#WeeklyInvestorReader | wk. 24

Note to readers: #WeeklyInvestorReader contains a few of the articles I read during the week. Visit my Twitter @HurriCap for any other articles that may not have been included. 

Another Swedish Company Aims to Be the Spotify for Books – Fortune, June 15, 2017 | “Fast-growing audio books company Storytel will expand into several new markets in the coming years while steering clear of English-speaking countries where rival Audible dominates, the Swedish company’s chief executive said.”

Mo’ Margins Mo’ Problems – Eric Cinnamond, June 14, 2017 | “Investors have a tendency to gravitate towards leading brands and high margins. Such traits are often an indication of a high-quality business and meaningful intangible assets. While brands can be very valuable, they are not free. Brands require considerable investment and ongoing maintenance. Furthermore, similar to many things in business, there are cycles, trends, and risks associated with even the best brands.”

HomePod – Above Avalon, June 14, 2017 | “Apple unveiled a brand new product category last week at WWDC: HomePod. On the surface, HomePod seems like an unusual product for Apple. The company’s most recent new products (Apple Watch and AirPods) form the foundation of an expanding wearables strategy. How does a stationary smart speaker fit into such a product strategy?”

Market Folly’s Summer Reading List – Market Folly, June 14, 2017 | “If you’ve got a vacation / holiday coming up and need some reading material, here are some recommended books on investing, hedge funds, business, decision making, and life in general. Some are newer books, others are classics you might have missed and should catch up on.”

10 Business Books For Your Summer Reading List – Dr. David Kass, June 14, 2017 | “The University of Maryland’s Robert H. Smith School of Business is excited to announce some favorite books in the 14th Annual Top-10 Summer Reading List for Business Leaders for 2017, as recommended by faculty members.”

How Adobe Got Its Customers Hooked on Subscriptions – Bloomberg, June 8, 2017 | “The switch to the cloud was risky, but revenue is way up.”

Is Wall Street Giving Netflix a Pass on Sky-High Content Costs? – The Hollywood Reporter, June 14, 2017 | “Netflix CEO Reed Hastings caused heart palpitations in Hollywood on May 31 when he said he wants to cancel more of his original shows. “Our hit ratio is way too high right now,” Hastings told CNBC.”

New: The Behavioral Economics Guide 2017 – Behavioral Economics, June, 2017 | “At the beginning of this year, I came across an attention-grabbing headline: “Behavioral Economics Isn’t Dead Yet”. It was written by Noah Smith on Bloomberg View. Despite some voices that may have questioned the future of behavioral economics (BE), Smith pointed to evidence that behavioral models may be slowly infiltrating macroeconomics.”

A U.S. Shoe Town Tries to Rebuild From Warren Buffett’s ‘Worst Deal’ Ever – Bloomberg, June 13, 2017 | “Two decades after Dexter Shoe closed, $325 hand-sewn penny loafers may hold the key to keeping the craft alive in Maine—and U.S. jobs onshore.”

P&C Insurance – A natural hedge against rising interest rates – S&C Messina Capital Management, June 11, 2017 | “The general consensus is that interest rates will rise. But the key question is when.”

Alibaba Stock’s Peculiar Legal Structure – The Conservative Income Investor, June 7, 2017 | “To receive capital from American investors—or investors anywhere outside China for that matter—Chinese business executives have begun to create variable interest entities (VIEs) that are designed to mimic the effects of foreign stock ownership.”

We Need to Talk About Uber: A Timeline of the Company’s Growing List of Problems – Longreads, June 10, 2017 | “In a piece for the Financial Times titled ‘Fire Travis Kalanick,’ Kadhim Shubber wrote of the founder of Uber: ‘One day we will look back at what will hopefully be the smouldering wreckage of Kalanick’s career and ask how a person so lacking in basic human and corporate ethics was allowed to run a company for so long.'”

2016 Financial Restatements Review – Audit Analytics, June 12, 2017 | “The annual Audit Analytics report on financial restatement trends is now available. This report provides a detailed analysis and comparison of trends in financial restatements over a sixteen-year period.”

JIM ROGERS: The worst crash in our lifetime is coming – Business Insider, June , 2017 | “Legendary investor Jim Rogers sat down with Business Insider CEO Henry Blodget on this week’s episode of “The Bottom Line.” Rogers predicts a market crash in the next few years, one that he says will rival anything he has seen in his lifetime. Following is a transcript of the video.”

Free Shipping Is A Lie – Fast Company, November 1, 2016 | “Free shipping is a top priority for online shoppers, but many merchants are struggling to keep up with the costs.”

Who Will Survive the Retail Reckoning of 2017? – Knowledge@Wharton, June 2, 2017 | “Legacy retailers’ ongoing struggle to stay relevant in a landscape increasingly dominated by Amazon and online upstarts has come to a head in the past year. Companies will close thousands of stores this year – and some may not survive at all. While it may seem that retail is headed for an apocalypse dominated by dead malls, in reality it’s a needed industry shakeout.”

Zalando’s Whizzy Website Doesn’t Come Cheap – Bloomberg, May 9, 2017 | “Online growth doesn’t come cheap. That has been the message from Europe’s big online retailers lately.While internet shopping is outpacing that in physical stores, avoiding the burden of bricks and mortar is no guarantee of runaway profit growth. The cost of fulfilling orders, dealing with a high level of returns and the need to enhance customer service is inescapable.In addition, traditional chains are improving their digital offerings, while Amazon.com Inc. is pushing ever-deeper into clothing.Zalando SE is the latest online retailer to spell out just how much it is spending in an attempt to stay one step ahead. The danger for it, and its rivals, is that profit growth doesn’t keep pace with sales expansion.”

Is the Company’s Product Attractive – Investment Masters Class, June 13, 2017 | “Charlie Munger has long reiterated the need to have multiple mental models to aid the investment process. This short essay looks at some of the product attributes that appeal to the Investment Masters.”

Judging GE’s Jeff Immelt Versus Jack Welch – Bloomberg, June 12, 2017 “The two chief executives of General Electric Co. were dealt very different hands.”

The Mall of the Future Will Have No Stores – Morningstar, June 12, 2017 | “As retailers close bricks-and-mortar stores at an accelerating pace, shopping-center landlords like Starwood Capital are facing a vexing question: What to do with all this empty space? Their solutions are varied but all have a common element: reducing, or even eliminating, retail from the equation.”

Going Private Possible for Nordstrom – Morningstar, June 12, 2017 | “Nordstrom’s (JWN) share price soared after the June 8 announcement that the Nordstrom family is exploring the option of taking its namesake company private. Combined, the family owns just over 30% of the department store.”

Amazon and Walmart’s all-out price war is terrifying America’s biggest brands – MSN Money, March 31, 2017 | “Grocery suppliers are feeling the squeeze — big-time.”

Can Retailers Escape the Scourge of Free Shipping? – Knowledge@Wharton, June 6, 2017 | “If retailers are hurting today, among the wounds — both self-inflicted and imposed from outside — is free shipping. On the demand side, customers are increasingly expecting free delivery and even free returns. The problem for retailers, of course, is that free shipping cuts deeply into profits.”

The death of brick-and-mortar retail – Axios, June 9, 2017 | “First, it was Main Street. Americans stopped going to their neighborhood diners, grocers, haberdashers and five-and-dimes, shifting their business to big malls, and blighting the central business districts of towns and cities across the country. Now it’s the malls’ turn: Americans are snubbing them, and flocking to shop on-line, mostly at Amazon. Will brick-and-mortar retail survive?”

Amazon’s Pivot to Poor People – The Atlantic, June 6, 2017 | “On Tuesday, Amazon announced that it will slash the price of membership to its Prime program by almost 50 percent for low-income shoppers on federal welfare. The move might seem like a unique form of private-sector charity for poor Americans, after decades of disappointing wage growth. But it’s also a direct challenge to Walmart, the reigning king of American retail, which relies heavily on low-income shoppers and receives nearly one of every five dollars of its revenue through SNAP, or food stamps, each year.”

Apple Spruces Up the App Store – Bloomberg, June 6, 2017 | “About halfway through Apple’s more than two-hour product demonstration on Monday was a moment that wouldn’t have raised the heart rates of die-hard technologists but may be the most significant of the announcements Apple made.”

Why Amazon Is Buying Whole Foods – Forbes, June 16, 2017 | “We all know Amazon is the most powerful retailer online. They have been marching like a conquering army to increased dominance every day. The customer experience they provide, a critical part in consumers’ judgment about their satisfaction with retailers today, is second to no one. So why would a company with so much power and potential online, invest over $13 billion to buy Whole Foods, a business that functions virtually entirely in physical stores?”

Free Research Report: Village Supermarket – Gannon on Investing, June 16, 2017 | “Supermarket stocks are a good area for value investors to research now. One way to learn about the supermarket industry in the U.S. is to read the report Quan and I wrote on Village Supermarket (VLGEA) back in 2014. That stock is now at roughly the same price – $25 a share – it was when we wrote about it.”

‘Betting on Zero’ documentary achieves desired results: Righteous outrage, moral superiority – Washington Post, March 16, 2017 | “When “Betting on Zero” was shown at the National Portrait Gallery’s 346-seat auditorium as part of last year’s Investigative Film Festival, half the seats to the screening of the documentary — a searing exposé arguing that the nutritional supplement company Herbalife is a Ponzi scheme — went empty. According to the festival’s organizers, several employees of Herbalife’s Washington lobbying firm, Heather Podesta + Partners, bought tickets in large batches, which were never used. Earlier in 2016, at the world premiere of the film at Tribeca, paid protesters handed out leaflets in an attempt to discredit the movie, according to the “Betting on Zero” website. Why all the fuss?”

In Swedish

Flera analytiker sänker riktkursen för H&M – färsk analys tror på en svag halvårsrapport – Veckans Affärer, 16 juni, 2017 | “Analyshusen väljer att sänka riktkursen för klädjätten och affärstidningen tror på dåliga försäljningssiffror framåt.”

Bäddat för ännu ett svagt H&M-kvartal – Dagens Industri, 15 juni, 2017 | “Sveriges mest välmående krisbolag bjöd på en ny försäljningsbesvikelse i maj. Det är därmed upplagt för ännu ett svagt kvartal med sur lönsamhetsutveckling när H&M presenterar halvårsrapporten 29 juni.”

Så har det gått för årets nynoteringar – Affärsvärlden, 16 juni, 2017 | “Årets nynoteringar har följt två trender: de nya bolagen på Stockholmbörsen har i de flesta fall gått starkt, medan tillskotten på smålistorna har haft det tuffare.”

Getinge planerar nyemission på 4 miljarder kr – Privata Affärer, 14 juni, 2017 | “Getinge planerar en nyemission om cirka 4 miljarder kr i syfte att stärka koncernens balansräkning genom att sänka belåningen och därigenom skapa ökat handlingsutrymme.”

Så blev Gardell en beryktad aktieaktivist – Dagens Industri, 2 juni, 2017 | “Snabba räder under radarn, offentliga attacker för att snabbt höja värdet och ständigt en blick mot utgången. Det är receptet som har gjort Cevian så segerrikt och Christer Gardell så kontroversiell.”


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