Friday, January 9, 2015


The Absolute Return Letter - January 2015 (LINK)
January each year brings with it a host of forecasts, many of which are 'pie in the sky' – silly predictions on equity markets, interest rates and currency movements. We are not in that game. Instead we focus on structural trends when analysing the future. In this letter we argue why these are more relevant for investors.
The Perils of Trying to Time the Market III (LINK)

Is this the best-performing VC fund ever? (LINK)

Robber barons and silicon sultans [H/T Will] (LINK)

The Cook & Bynum Fund visits Peru and Bolivia.

Tailored Accounting at IPOs Raises Flags (LINK)
Zoe’s Kitchen Inc. is serving up profits—but only after leaving some of its expenses off the menu. 
Zoe’s, a chain of 125-plus Mediterranean-theme restaurants that went public in April, reported an adjusted profit of $13.2 million for the first nine months of 2014 under its own accounting treatments that strip out a variety of expenses. 
Including those expenses, as is required under standard accounting rules, Zoe’s reported a loss of $8.4 million. 
It is far from an isolated example. Forty companies went public in 2014 reporting losses under traditional accounting rules but showing profits under their own tailor-made measures. That is 18% of all U.S. initial public offerings for the year, according to consulting firm Audit Analytics, the highest level since at least 2009. Of 2014’s 10 biggest IPOs, nine used nonstandard earnings measures alongside the official accounting treatment to some degree.