Kristian Siem – How Norway’s Warren Buffett Has Banked 30% Yearly Gains Since 1987 by Allen Benello & Michael van Biema – MarketWatch

Kristian Siem is considered by many to be the Warren Buffett of Norway. Since 1987 Siem has compounded his money at a rate of about 30% annualized, increasing his worth from about $5 million in 1987 to around $2 billion by 2014. He has done this by focusing on two relatively narrow sectors: offshore drilling and shipping — about which he has extensive knowledge.

Siem, 67, has a long track record of private and public investment in both oil and gas and shipping. He made his name and his fortune by buying undervalued assets, a story that begins in the late 1970s when Kristian Siem, not yet 30 years old, came upon a rare opportunity in the offshore drilling industry. The Haakon Magnus, a semi-submersible drilling rig, had been seized by its lender after its owner’s default. The rig, which had been built for $37 million, could be had for $22 million. Siem, who described himself as a consultant, didn’t have $22 million. He had little more than a business card and an office in the spare room of a small shipping company owned by his godfather.

Kristian Siem also had a reputation as being an expert in offshore drilling. His business school thesis had been on the transportation of liquid natural gas (LNG), and after graduating, Siem had been hired by Fred. Olsen, a Norwegian shipping industrialist and head of the Fred. Olsen Group.

But the Haakon Magnus deal was problematic from the start. After Viking Offshore, its owner, defaulted, Chemical Bank foreclosed on the drilling rig. The bank needed $22 million to clear the debt. Siem could borrow the $22 million, but would also need an additional $4.5 million in working capital to operate the rig. That money would have to come from outside investors. Siem contacted the head of the oil division at Norcem, Jan Tore Odegard, whom he had consulted in the past. On the telephone, Kristian Siem said to Odegard:

You want to get into offshore drilling? Come into Haakon Magnus. I will give you 15% of $4.5 million in equity, which is a very small investment. And I’ll give you a chance to buy options to take your equity investment to 50%. That means you will control a new semi-submersible with 15% of $4.5 million. If you are serious about going into offshore drilling, you won’t find a cheaper ticket.

See full article here.

Concentrated Investing: Strategies of the World’s Greatest Concentrated Value Investors -Description

Concentrated Investing: Strategies of the World’s Greatest Concentrated Value Investors by Allen C. Benello, Michael van Biema, Tobias E. Carlisle

Discover the secrets of the world’s top concentrated value investors

Concentrated Investing: Strategies of the World’s Greatest Concentrated Value Investors chronicles the virtually unknown—but wildly successful—value investors who have regularly and spectacularly blown away the results of even the world’s top fund managers. Sharing the insights of these top value investors, expert authors Allen Benello, Michael van Biema, and Tobias Carlisle unveil the strategies that make concentrated value investing incredibly profitable, while at the same time showing how to mitigate risk over time. Highlighting the history and approaches of four top value investors, the authors tell the fascinating story of the investors who dare to tread where few others have, and the wildly-successful track records that have resulted.

Turning the notion of diversification on its head, concentrated value investors pick a small group of undervalued stocks and hold onto them through even the lean years. The approach has been championed by Warren Buffett, the best known value investor of our time, but a small group of lesser-known investors has also used this approach to achieve outstanding returns.

  • Discover the success of Lou Simpson, a former GEICO investment manager and eventual successor to Warren Buffett at Berkshire Hathaway
  • Read about Kristian Siem, described as “Norway’s Warren Buffett,” and the success he has had at Siem Industries

Concentrated Investing will quickly have you re-thinking the conventional wisdom related to diversification and learning from the top concentrated value investors the world has never heard of.

Concentrated Investing: Strategies of the World’s Greatest Concentrated Value Investors –  Review

This is an original approach to both value investing and diversification, and brings a new perspective to some familiar topics. (Money Week, May 2016)

From the Inside Flap

If you’ve studied value investing, some of the names in this book may be familiar, but the majority probably won’t be. Nonetheless, they are a who’s who in concentrated value investing, each with their own unique story, skillset, and philosophies that have gained them tremendous wealth and accomplishment while flying below the radar—until now. Concentrated Investing: Strategies of the World’s Greatest Concentrated Value Investors takes you inside the ledgers and playbooks of this select group of history’s elite value investors to uncover their secrets for the new generation of wealth builders.

Turning the practice of diversification on its head, concentrated value investors purchase a small group of undervalued stocks and hold them through the highs and lows of the long term. You will read a lot about the juggernaut of value investing, Warren Buffett, who amassed the legendary Berkshire Hathaway with this approach. But this motivating book shows you he wasn’t the first or only one. This eye-opening examination will have you re-thinking conventional wisdom on asset allocation and emulating such concentrated value investors as:

  • A former GEICO investment manager whom Buffett has named “a cinch to be inducted into the investment hall of fame”
  • Kristian Siem, who grew Siem Industries at 25.6% annually over the past twenty- five years by following two key principles
  • Edward Thorp and the formula he trusted to risk $662.5 million on to collect just $2.5 million in a rare opportunity
  • Trends, momentum, volatility, and volume all change day to day and create opportunities to pick up the undervalued stocks that grow into fortunes, as you’ll see in Concentrated Investing.

Kristian Siem Concentrated Investing

Concentrated Investing: Strategies of the World’s Greatest Concentrated Value Investors by Allen C. Benello, Michael van Biema, Tobias E. Carlisle

Kristian Siem