Tuesday, December 22, 2015

Merry Xmas

Dear Readers

Thank you for your continuing feedback and patronage.

It has been an interesting year, to put it mildly. Given the number of exploding landmines eg VET, SGH, ACO, SPO, DSH, CAJ, and countless of others I cannot now recall, our risk management verging on paranoia continues to protect us.

The COF saga has now been wrapped up. With 72% acceptances, I think the takeover from TetraTech is very likely to proceed. This has been a rollercoaster ride, with a very important lesson of being focussed on valuation, paying attention to things that really matter, which in the case of COF, is the International Development division.

Another saga, namely SCD, also wrapped up during the year. Once again, a low entry price saved us from grief. SCD presents another interesting case study on risk management, on how things could go wrong, and in this case, management with a large voting stake choosing to make the company "go dark."

It is also pleasing to start Xmas with a nice profit guidance from UOS today, being $128m compared with $84m last year. The Fort Knox balance sheet with super astute management continues to protect our investment. We look forward to many more good years with the Kongs.

We are also looking forward to the future with management of SSM. A pleasant belated Xmas present in the form of a big contract with the nbn, together with contracts with Origin in rolling out solar panels and residential battery storage, and with continuing mobile capex war between the big telcos, it is going to be smooth sailing ahead with massive tailwinds.

We also could not possibly not mention Mr Alf Moufarridge and his team at SRV. Well done, and may the cash continue to flow ever more.

Have a safe and merry Xmas, and a Happy New Year. We expect 2016 to be another interesting year. In particular, we are getting ready our popcorn to watch the resulting fireworks in the clash of Slaters versus Maurice Blackburn class action.  As they say, he who lives by the sword dies by the sword.

Enjoy and Prosper,
Yours One-Legged