Tilson – Gets “Brain damage” Booking First Trip Ever To Russia

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From Whtiney Tilson’s email to investors titled Europe trip; Munger: The Psychology of Human Misjudgement; Stock Picking Is Dying Because There Are No More Stocks to Pick; pharma scam; A New Casualty: Retail Jobs; T.J. Maxx; It’s Never Too Late to Build a Fortune

I’m flying to Amsterdam this evening for a little vacation with my wife in Holland, Belgium and London (I’m a big tennis fan, so a day at Wimbledon has always been on my bucket list (July 8th), then heading to Italy to co-host the 14th Annual Value Investing Seminar on July 13-14, then flying home with a day-long layover in Moscow on the 16th – my first time ever in Russia (I hope it’s worth the large amounts of time and brain damage it took to get a visa)!

2) The team at tiny.com (www.tiny.website) had a team of animators create an abridged video version of Charlie Munger’s famous speech, The Psychology of Human Misjudgement: www.youtube.com/watch?v=7-fe01CA3vc (14:41)

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3) Jason Zweig with some interesting points: Stock Picking Is Dying Because There Are No More Stocks to Pick, www.wsj.com/articles/stockpicking-is-dying-because-there-are-no-more-stocks-to-pick-1498223931. Excerpt:

Cowen: As Retail Struggles, Digital Sales, Mobile Integration Are Keys

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In less than two decades, more than half of all publicly traded companies have disappeared. There were 7,355 U.S. stocks in November 1997, according to the Center for Research in Security Prices at the University of Chicago’s Booth School of Business. Nowadays, there are fewer than 3,600.

A close look at the data helps explain why stock pickers have been underperforming. And the shrinking number of companies should make all investors more skeptical about the market-beating claims of recently trendy strategies.

Back in November 1997, there were more than 2,500 small stocks and nearly 4,000 tiny “microcap” stocks, according to CRSP. At the end of 2016, fewer than 1,200 small and just under 1,900 microcap stocks were left.

4) What a total outrage! How Two Common Medications Became One $455 Million Specialty Pill, www.propublica.org/article/horizon-pharma-vimovo-common-medication-455-million-specialty-pill. Excerpt:

Vimovo was created using two readily and cheaply available generic, or over-the-counter, medicines: naproxen, also known by the brand Aleve, and esomeprazole magnesium, also known as Nexium. The Aleve handles your pain and the Nexium helps with the upset stomach that’s sometimes caused by the pain reliever. The key selling point of this new “convenience drug”? It’s easier to take one pill than two.

But only a minority of patients get an upset stomach, and there was no indication I’d be one of them. Did I even need the Nexium component?

Of course I also did the math. You can walk into your local drugstore and buy a month’s supply of Aleve and Nexium for about $40. For Vimovo, the pharmacy billed my insurance company $3,252. This doesn’t mean the drug company ultimately gets paid that much. The pharmaceutical world is rife with rebates and side deals — all designed to elbow ahead of the competition. But apparently the price of convenience comes at a steep mark-up.

5) Just when you think things can’t get worse for small-town America: In Towns Already Hit by Steel Mill

Closings, a New Casualty: Retail Jobs, www.nytimes.com/2017/06/25/business/economy/amazon-retail-jobs-pennsylvania.html. Random fact: JC Penney alone employs nearly TWICE as many people as the ENTIRE coal industry! Excerpt:

Ms. Nasewicz is another retail casualty, one of tens of thousands of workers facing unemployment nationwide as the industry struggles to adapt to online shopping.

Small cities in the Midwest and Northeast are particularly vulnerable. When major industries left town, retail accounted for a growing share of the job market in places like Johnstown, Decatur, Ill., and Saginaw, Mich. Now, the work force is getting hit a second time, and there is little to fall back on.

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Moreover, while stores in these places are shedding jobs because of e-commerce, e-commerce isn’t absorbing these workers. Growth in e-commerce jobs like marketing and engineering, while strong, is clustered around larger cities far away. Rural counties and small metropolitan areas account for about 23 percent of traditional American retail employment, but they are home to just 13 percent of e-commerce positions.

E-commerce has also fostered a boom in other industries, including warehouses. But most of those jobs are being created in larger metropolitan areas, an analysis of Census Bureau business data shows.

6) An insightful, in-depth WSJ article about how TJX, almost alone among U.S. bricks and mortar retailers, is thriving. How to Survive the Retail Crisis: A Master Class from T.J. Maxx, www.wsj.com/articles/how-t-j-maxx-is-bucking-the-crisis-in-retailing-1497970910. Excerpt:

Traditional retailers are in crisis, damaged by rapidly shifting consumer tastes, technological change and cut-throat price competition. And then there’s TJX Co TJX -3.00% s., which is defying gravity with the simple idea that under the right circumstances people still like to shop in stores.

The owner of T.J. Maxx and Marshalls has seen sales at stores open at least a year rise for 33 straight quarters. Its annual sales exceed those of Nordstrom Inc. JWN -3.95% and J.C. Penney Co. JCP -5.17% combined. The company’s market value is almost seven times that of Macy’s Inc., M -2.69% which was once the more valuable company.

TJX gets almost all its sales from its roughly 3,800 physical locations and plans to open 250 stores this year. Its revenue and profits are climbing and it envisions expanding to 5,600 stores worldwide over time.

The Framingham, Mass., company isn’t shifting business online or using big data to figure out what shoppers want. Instead, it has become one of the country’s fastest-growing retailers by sticking with a playbook from a vanishing era. It relies heavily on the instincts of its merchandise buyers, many of whom have been with the company for decades. TJX stores rapidly turn over limited quantities of products that are all sold at bargain prices. The result is a rarity in retail—a constant treasure hunt.

7) There’s hope for me – LOL! (hat tip, Doug Kass)


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