The question you should ask yourself is whether this is a good business for you to own - at times even the best manager may not be able to do wonders to a fundamentally tough business with a crumbling moat
I haven’t thought about CMPR for awhile now, I followed it when Arlington Value Capital had it as its 2nd largest position mostly, with BRK as its 1st, before they folded in 2020. He wrote a lot about the company in his annual letters though.
You're 100% spot on. My intrinsic value estimate has gone down. But it's less than the drop in the share price so the dynamic is still there. Owning a stock, including holding, is an ACTIVE process of continual reassessment and evaluation. That's par for the course. It's definitely underperformed business-wise to what I'd expected.
I think there's a little bit of muddled thinking here: yes, the price has gone down but I'm not sure the odds have increased significantly because operating performance has been poor at the same time. I suspect your estimate of intrinsic value must have dropped alongside profit forecasts? I don't think you can conclude you should hold just because the price has dropped.
Compounding that issue, it sounds like business performance has been substantially worse than you expected? That should make you reassess your understanding of the business and its attraction as an investment. Even if you think the potential upside is higher, I think it's ok (and even advisable) to exit the position if there are signs that your understanding of the business is wrong.
Finally, your article makes it sound like capital allocation has been poor with a (unexpected) shift to acquisitions. If this is the case, it would be yet another reason to reasess the odds - and again it compounds the two problems above (misunderstanding of the business and it's prospects; and lower future cashflow to shareholders as some will be used for M&A).
Hi Adam - how have your thoughts evolved on Cimpress? Do you still own shares?
Hey - I am curious - when you say sources 90M net income, where does that come from? Is that a cumulative number you are using or one year?
Thought provoking work. Thanks!
The question you should ask yourself is whether this is a good business for you to own - at times even the best manager may not be able to do wonders to a fundamentally tough business with a crumbling moat
I haven’t thought about CMPR for awhile now, I followed it when Arlington Value Capital had it as its 2nd largest position mostly, with BRK as its 1st, before they folded in 2020. He wrote a lot about the company in his annual letters though.
You're 100% spot on. My intrinsic value estimate has gone down. But it's less than the drop in the share price so the dynamic is still there. Owning a stock, including holding, is an ACTIVE process of continual reassessment and evaluation. That's par for the course. It's definitely underperformed business-wise to what I'd expected.
I think there's a little bit of muddled thinking here: yes, the price has gone down but I'm not sure the odds have increased significantly because operating performance has been poor at the same time. I suspect your estimate of intrinsic value must have dropped alongside profit forecasts? I don't think you can conclude you should hold just because the price has dropped.
Compounding that issue, it sounds like business performance has been substantially worse than you expected? That should make you reassess your understanding of the business and its attraction as an investment. Even if you think the potential upside is higher, I think it's ok (and even advisable) to exit the position if there are signs that your understanding of the business is wrong.
Finally, your article makes it sound like capital allocation has been poor with a (unexpected) shift to acquisitions. If this is the case, it would be yet another reason to reasess the odds - and again it compounds the two problems above (misunderstanding of the business and it's prospects; and lower future cashflow to shareholders as some will be used for M&A).
Interested to hear your thoughts!