Slides from Remick Capital’s 2015 annual meeting.
Remick Capital Summary
- Remick Capital advises 70 clients
- ~$8.5m in total assets under management
- No secretary, no marketing
- Individual stocks and bonds
–Rarely, if ever, will I invest accounts in mutual funds
–I invest both long and short
–I don’t sell insurance, do financial plans, do taxes, etc - Investment philosophy summarized here
–Recent market history has reinforced my philosophy
–Outside of my house and emergency fund, all my money is invested alongside clients
My investment philosophy is simple, but not necessarily easy.
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I try to buy good investments cheaply and hold them until I find a much better idea, or they are no longer cheap.
Remick Capital’s Performance Table
Latest is always here
Remick Capital – Current Holdings
Accounts @ Interactive Brokers as of 8/10/2015
- Long only accounts
–96% invested
–4% cash - Long / short accounts
–120% invested
–25% short
–5% cash - Concentration
–Top 10 = ~85% of investments
Remick Capital’s Comments on Performance
- Please see disclosure
–http://www.remickcapital.com/files/perfdisclosure.pdf
–Results not audited
–Performance in 2014 sucked, barely positive, but 2H 2014 was very negative
–Poor performance was discussed extensively in Q4 2014 letter - Key changes made
–Moved to exact unify portfolios across all accounts (one for IRAs, and one for taxable)
–Reduced size of portfolio exposure (both long and short) - Changes *not* made
–General philosophy – still value oriented, independent, contrarian, and concentrated
–Still invest the same way for myself and clients - 2015 is so far looking up
–Long investments doing reasonably well
–Short investments also doing well
Remick Capital – Leucadia National (LUK)
- Misunderstood conglomerate
–I really like the CEO, Chairman, and several of top management
–Shares trade for approximately tangible asset value per share
–Many hidden levers for growth in earnings
–Business is levered to inflation and higher rates - In many cyclical, or somewhat cyclical businesses
–Beef processing, investment banking, plastics, O&G, Forex brokerage, real estate, etc - Some high quality businesses also hidden within
–Commercial mortgage servicing, auto retail / service
–I would also argue the investment banking division is super high quality - Management is aligned with shareholders
–Big share ownership, limited sales throughout history
–Long paper trail of treating outside shareholders fairly (and profitably)
Remick Capital – American International Group (AIG)
- AIG name still tainted from near collapse in 2008
–But now with new management, streamlined businesses, better oversight
–Not a “great” company, but not as bad as the market treats it; I think a “good” franchise - Basic AIG thesis is simple
–No more skeletons in their closet, stock price is held down by historical bias, low rates
–$82 / share in equity value, and nearly $6 / share of earnings power (stock at $64)
–AIG accelerating buybacks this year (run rate of >10% return on current price)
–Upped dividend as well
–I think $90 (10% premium to book) is probably the right price for a business of AIG’s quality
–Income should improve with higher interest rates - We also own some warrants on AIG
–Warrants were granted to Treasury during crisis, later auctioned off
–Bestow the right to buy AIG @ $45 / share in Jan 2021, with a dividend adjustment
–Essentially a leveraged bet on AIG stock (like a stock option)
See full PDF below.
