| Small & micro cap project / Activism insight

Cove Street Capital’s blog review

 

by | Nov 19, 2019

Cove Street Capital was founded by Jeffrey Bronchick. Roughly 30% of the companies in the portfolio have a market cap of less than $1 billion, while 60% are between $1 billion to $10 billion.

The fund’s blog covers various areas – investment strategy, investment management industry, competitive advantage, activism, governance, compensation, etc.

Recent notable posts

http://covestreetcapital.com/counterfactual-investing/

http://covestreetcapital.com/great-governance-ideapoor-execution/

Strategy letters

Every year, the founder pens roughly 4 – 5 letters. Here is the link – http://covestreetcapital.com/category/csc-strategy-letter/

Here are a few extracts from the recent strategy letter:

To be fair, let’s discuss when to fire us. Here is a quick list: we blow through the asset size we told you was optimum for our strategy; we have people leaving in droves; the Founder has a second wife, a third home, a plane and is in the opening band for the final Rolling Stones tour; we sold a majority stake in the firm; and/or we walk into your office with 76 stocks in the portfolio. Any combination I would suggest is a sign that something is different here.

We argue that in a world of silly, value investing is an antidote. In a world where investing firms are legitimately going away—or are about to—we are a firm that has staying power. In a world where competing groups of the world’s smartest people are raising the largest funds in history to pay the highest multiples in history with the most lenient credit profiles in history, nosing around for a handful of good businesses at reasonable prices amidst the abandonment of 2500 or so investable small cap public assets is arguably a legitimate idea.

http://covestreetcapital.com/wp-content/uploads/2019/10/Strategy-Letter-37-October-2019.pdf.pdf

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