The Intelligent Investing Podcast

Join Eric Schleien & Rafael Resendes discuss how to value and measure the intrinsic value of Tesla (TSLA) and GameStop (GME). Rafael Resendes is the portfolio manager & co-founder of Applied Finance Capital Management. To watch this on YouTube (which for this one, I would recommend) - you can click, here. Resources

• For listeners interested in some of the research presented on the show today, you can sign up for the monthly newsletter, The Valuation Edge.
• For listeners interested in actually modeling companies they can join the waiting list for the Intrinsic Value Tool.
• Value Investing 2nd Edition, on Amazon.
• Eric Schleien's Book: Principles Of Power: The Art & Wisdom of Badassery, on Amazon

About Eric Schleien

Over the past decade, Eric has trained thousands of individuals including board members of public companies as well as several Fortune 500 CEOs. Eric specializes in organizational culture and has become a leading authority on organizational culture in the investment industry.

Eric has been investing for 15 years and has been using breakthrough coaching methodologies for over a decade. Eric had the insight to combine proven coaching methodologies with shareholder activism techniques to create an entirely new model for shareholder activism that was more reliable and created greater sustainable results in a rapid period of time. On average, Tribal Leadership produces a 3-5x increase in profits of culturally troubled companies within an average of 24 months or less.

Eric currently resides in Philadelphia, PA.

Help Out The Podcast

If you like The Intelligent Investing Podcast, please consider leaving a rating and review on Apple Podcasts. It takes less than 30 seconds to do and makes a huge difference! You can also join the Facebook page!

You can subscribe to the podcast on the following platforms:

• Apple Podcasts
• Stitcher
• TuneIn
• Spotify
• Podbean
• iHeart Radio
• YouTube

CONTACT ERIC SCHLEIEN

Facebook | LinkedIn | Twitter | YouTube | GSCM | Instagram

Email: [email protected]

Join Eric Schleien with the founders of Alluring Oddities, as they share stories about their income-generating passion for thrift shopping and what it took to make this side-project grow and continue growing.

More than just a business, the founders treat their passion as a venture wherein they can cultivate experiences for their friends, loved ones, and Buffalo's whole community. Community over competition is a general outlook that they endorse.

Learn more from their experiences as you tune in further to what the founders have have to share.

About Alluring Oddities:

Alluring Oddities is a curated and cultivated gallery of mostly 60s or 70s offbeat thrifted treasures in Buffalo, NY.

Outline of the episode:

• [07:45] The fascination towards everything timeless in condition.
• [09:53] Make money out of it, not: get rid of it.
• [11:03] More than just a business, it's a lifestyle.
• [13:22] Alluring Oddities: a thrift store's gross margin.
• [14:37] Set your brand different from others.
• [15:30] The resurgence in Buffalo's market.
• [17:03] Why interact with your audience? Why research? Why benchmark?
• [19:44] Connecting to peoples' stories through their belongings.
• [25:43] On price tagging.
• [26:34] "Community over competition."
• [29:22] What your venture will mostly need from you.
• [30:06] Putting everyone's strengths at work.

Resources:

Bounty Hunter TK4 Tracker IV Metal Detector

Value Investing 2nd Edition

Principles Of Power

Thrift at or Donate to Goodwill

Thrift at or Donate to Salvation Army

About Eric Schleien

Over the past decade, Eric has trained thousands of individuals including board members of public companies as well as several Fortune 500 CEOs. Eric specializes in organizational culture and has become a leading authority on organizational culture in the investment industry.

Eric has been investing for 15 years and has been using breakthrough coaching methodologies for over a decade. Eric had the insight to combine proven coaching methodologies with shareholder activism techniques to create an entirely new model for shareholder activism that was more reliable and created greater sustainable results in a rapid period of time. On average, Tribal Leadership produces a 3-5x increase in profits of culturally troubled companies within an average of 24 months or less.

Eric currently resides in Philadelphia, PA.

Help Out The Podcast

If you like The Intelligent Investing Podcast, please consider leaving a rating and review on Apple Podcasts. It takes less than 30 seconds to do and makes a huge difference! You can also join the Facebook page!

You can subscribe to the podcast on the following platforms:

• Apple Podcasts
• Stitcher
• TuneIn
• Spotify
• Podbean
• iHeart Radio
• YouTube

CONTACT ERIC SCHLEIEN

Facebook | LinkedIn | Twitter | YouTube | GSCM | Instagram

Email: [email protected]

Had the pleasure of bringing back on Don Chambers who is currently involved in an activist campaign against SVVC. To see the first episode where he discusses his ongoing battle with SVVC, you can click here. You watch this as a video on YouTube, click here. Show Links

• BDC Info
• Don's Proposal to SVVC (see page 16)
• Election Results

Don's Proposal

PROPOSAL THREE
(Non-Binding Stockholder Proposal)
THAT THE BOARD SEEK AND PURSUE ANY AND ALL MEASURES TO ENHANCE SHAREHOLDER VALUE

A stockholder, Donald Chambers, submitted the following proposal for inclusion in the Company’s proxy materials. If the stockholder, or a representative of the stockholder who is qualified under state law, is present and properly submits the proposal for a vote, then the proposal will be voted on at the Annual Meeting. The Board of Directors unanimously recommends that you vote AGAINST the proposal. The proposal and the stockholder’s supporting statement, exactly as received from the stockholder, are set forth below and are followed by the Board’s explanation of its reasons for opposing the proposal. As an advisory vote, if approved, the stockholder’s proposal would be a non-binding recommendation to the Board of Directors. The Company will provide Mr. Chambers’s address and number of shares held promptly upon oral or written request.

STOCKHOLDER PROPOSAL

RESOLVED: That the shareholders of SVVC assembled at the 2020 annual meeting in person and by proxy, hereby request that the Board of Directors of SVVC seek and pursue any and all measures to enhance shareholder value including: (1) orderly termination of the fund, (2) orderly liquidation of SVVC assets with distribution of available cash to shareholders, (3) tender offers for SVVC shares using available cash from any and all investment exits, (4) merger of the fund into an entity offering shareholder exits near NAV (net asset value), or (5) other measures likely to allow shareholders to exit SVVC near its NAV.

REPRINTED SUPPORTING STATEMENT FROM STOCKHOLDER

I urge shareholders to vote “Yes” to this proposal for the following reasons (based on information, belief and personal computations):

The performance of SVVC’s stock has been catastrophic relative to relevant benchmarks. The total annualized compounded market returns of SVVC and three relevant benchmarks over the life of SVVC are:

Ticker

Description

Annual Return
4/28/2001
-10/24/2019

VT1

Total stock market ETF

9.5%

VB

Small stocks ETF

8.0%

SPBDCUP

S&P BDC Index

6.3%

SVVC

-8.9%

Basing SVVC’s return on its recent NAV generates a positive return (4.8%). But that highlights the crux of the problem: SVVC’s NAV overstates its value under current management because it does not fully account for prospective fees and expenses. SVVC’s market price does reflect the massive fees and indicates a loss of -8.8% per year. SVVC’s 2% annual management fee (on gross assets) is roughly a 7% annual fee based on the market value of the equity. SVVC’s most recent statement reports $908,003 as the quarterly management fee (which is over 50 cents per share annualized). There are additional expenses and a 20% incentive fee on realized net profits. Accordingly, the discount of SVVC’s market price to its NAV has been very large - recently well over 50%.

The annual rate of compensation to each of the four independent directors of SVVC is $50,000 per year yet, reportedly, only one director held SVVC stock and that director held only 700 shares (see SVVC Proxy Statement 5/30/19).

Assuming that SVVC’s valuations of its private investments are reasonable, the Directors should be able to locate private equity investors enabling SVVC to be liquidated at a value near to its NAV.

Disclosure:

Mr. Chambers is a part-time employee (CIO-Model Portfolios) of Biltmore Capital Advisors (BCA) which manages approximately 292,254 shares of SVVC on behalf of its clients. Mr. Chambers has recused himself from all decisions at BCA regarding SVVC transactions or voting while this proposal is under consideration. SVVC is a restricted security for BCA employees so Mr. Chambers is restricted from transacting in SVVC while this proposal is under consideration.

About Don Chambers

Donald R Chambers currently runs the website, SaveFirstHandTechnology. He is also a recently-retired (June 2017) professor of finance with 36 years of tea...

Show Summary

Happy day before Halloween! This is a very special episode of The Intelligent Investing Podcast. I bring Brian Langis back on the show to discuss Brookfield Asset Management which we have discussed before. We go into some of the slides from Brookfield Investor Day 2019 on both Brookfield Asset Management and also some of their subs such as Brookfield Business Partners. We discuss larger trends, low and negative interest rates, valuations, and culture.

Cultural Activism

We spend quite a while on the cultural activism going on at Brookfield Business Partners led by their COO, Denis Turcotte. I had the pleasure of meeting him at the Brookfield Investor Day and noticed he wasn't just giving lip service to culture but actually doing it and knew he didn't learn this from business school. Many of you don't know this but I have a 10 year background in transformational coaching and a 7 year background specifically on organizational culture- not just understanding it but actually empowering organizations to elevate it. Brookfield Business Partners is actually working with businesses to elevate culture not just talk about it and no surprise, profits go up!

Better Culture Equals Greater Profits

One of the things I have discussed with my colleagues John King and Scott Forgey is that greater culture equates to greater profits. John King is the inventor of Tribal Leadership which is the most cutting edge and leading cultural transformation technology on the planet. Scott Forgey is working with me on empowering organizations to elevate their culture, except we are focusing on public companies. When an organization goes from what is known as Stage 2 to Stage 4, profits go up by an average of 300% - 500%.

Relevant Links For This Episode

1. Eric Schleien interviews John King on Tribal Leadership | Thrive Global
2. Cultural Activism: A New Model For Activism | The Intelligent Investing Podcast
3. Netflix, Sears, Tribal Leadership | The Intelligent Investing Podcast
4. How To Keep Large Companies Innovative | The Intelligent Investing Podcast
5. The Oaktree / Brookfield Transaction | The Intelligent Investing Podcast
6. 2019 Brookfield Investor Day Slides | Brookfield Asset Management Investor Relations
7. Getting Into The Weeds: Recap on Brookfield Asset Management | The Intelligent Investing Podcast

Connect With Eric Schleien

• Visit Eric Schleien’s Podcast
• Visit Eric Schleien’s Twitter
• Visit The Intelligent Investing Podcast’s Twitter
• Like The Intelligent Investing Podcast on Facebook
• Follow Eric Schleien on Facebook
• Visit Granite State Capital Management’s Website
• Follow Eric Schleien on Instagram

Connect With Brian Langis

• Visit Brian Langis' BLOG
• Visit Brian Langis' SEEKING ALPHA
• Visit Brian Langis' LINKEDIN
• Visit Brian Langis's FACEBOOK
• Visit Brian Langis' TWITTER

For the full video interview on YouTube, click here. Subscribe

If you like The Intelligent Investing Podcast, please consider subscribing on:

• Apple Podcasts
• Stitcher
• TuneIn
• Spotify
• Podbean
• iHeart Radio
• YouTube

Overview

Endor AG is a Munich-listed holding company whose sole asset is Fanatec, the premium provider of racing wheels and other accessories for sim racing games played on consoles and PCs

Despite being a German-listed small-cap, the company has ~80% market share in the premium wheel/accessories segment and has essentially locked up exclusive branding rights for all the major OEMs and racing organizations (F1/Nascar/WRC) to produce branded replica racing wheels. Growth Endor AG grew 70-80% last year and has compounded revenues at 40% over the last 10yrs, as iRacing/simulated racing has grown organically in popularity at very high rates COVID-19 Impact Current growth is exploding due to COVID-19 and the mainstream recognition sim racing has garnered with normal sports closed for the last three months. The current business is growing 100-200% per annum, so much so that the company can barely keep up with demand. The company has already leaked they are targeting 150-200mm in revenues at 25-30% EBIT margins in the next couple of years (versus 40mm revenues last year and 80mm this year). Going Forward The stock currently trades at ~11x 2021 earnings, and ~2x 2021E sales, despite a multi-year runway where the business could grow 30% for a very long time. Fair value on a 'normal' exchange with English disclosures/investor relations would probably be 4-5x the current price. Jeremy believes that even on the minor German exchange, it's hard to see how the stock doesn't double or triple again. Staying In Touch With Jeremy Raper

• Blog
• Twitter

Staying In Touch With Eric Schleien

• Facebook
• YouTube
• LinkedIn
• Twitter
• Instagram
• GSCM