James Grant Presentation – Ira Sohn 2014 Conference

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James Grant is a financial journalist and historian and the founder and editor of Grant’s Interest Rate Observer, a twice-monthly journal of the investment markets. Among his books is the newly published Mr. Speaker! The Life and Times of Thomas B. Reed, the Man Who Broke the Filibuster (Simon & Schuster). James Grant is, in addition, the author of five books on finance and financial history. His John Adams: Party of One, a biography of the second president of the United States, was published in 2005.

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James Grant spoke at the IRA Sohn Investment Conference, also see Alex Porter, Hedge Fund Pioneer, Dies, Leaving Behind Struggling Amici. Below are notes from his presentation.

NOTE we had technical difficulties but there was a really inspiring speech by Elana Smith who is a cancer survivor and proceeded Jim Grant on the stage. Ira Sohn is an incredible (totally a partisan) charity and its important to note the cause is more important than the ideas. Evan Sohn is an incredible persona (who I had the honor of meeting with personally) and has done a great job promoting the conference for his late brother.

Highlights from James Grant’s presentation

3:08 Will James Grant talk about the short case for VRX again were finding out right now. As noted in prior presentation,  High-school senior Elana Simon spoke about her battle with cancer. She is going to Harvard next year!

3:11 Grant: OGCD is HLF without Carl Icahn. He says to go long Gazprom. There is no more reviled business than Gazprom says Jim Grant (the comment about Herbalife was a joke for those who missed it).

He notes that the corporate governance at Gazprom is not great stating that it is the polar opposite of Tesla Motors, and used as a political instrument of Putin’s policy.

3:15 Grant cracks another joke stating that Gazprom is “Donald Sterling with a London ticker”

Using a very contrarian argument which ValueWalk readers will find familiar Grant asks what could possibly go right with gazprom? Good things tend to happen to cheap stocks.

3:17 Grant uses some more humor and says that Gazprom trades at only 2.4 times 2014 earnings even after taxes and stealing

In terms of capital allocation Gazprom pays a dividend of 5 percent, while the payout ratio is less than 15%.

3:20 “in the credit markets, we have a saying: no bad bonds, bad prices. Gazprom may or may not be a bad company, but all of the bad things probably priced in”

Grant calls Gazprom the ‘worst-managed company on the planet’

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