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Eric Schleien discusses value investing, rational investment analysis, and vital mental models.
Episodes
Tuesday Nov 10, 2020
Tuesday Nov 10, 2020
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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 |
|
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 teaching experience. Dr. Chambers has written several books regarding investments and personal finance that are distinguished by their clear writing and ability to make difficult concepts accessible to his audience. He is the lead author of the 600+ page Modern Corporate Finance: Theory and Practice which is in its eighth edition (forthcoming with FlatWorld), the 1,000-page Alternative Investments which is in its third edition with Wiley, and several other books on finance. Dr. Chambers has published over 50 scholarly articles.
Dr. Chambers has had numerous appearances in media including national television, national public radio, regional television, and regional radio. Dr. Chambers co-starred in a nationally-televised cable television series regarding finance in 1988 (45 Fortune) and frequently serves as a public speaker.
In more recent years, he has written numerous blogs and spoken frequently regarding investments in his role as Chief Investment Officer of Biltmore Capital Advisors.
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.
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Tuesday Oct 27, 2020
Tuesday Oct 27, 2020
In this episode, Eric Schleien sits down with Ann Hambly, the Founder/CEO of 1st Service Solutions. I'm a huge fan of Ann, as she transformed the CMBS industry and has also been impacted by the Tribal Leadership technology which I've shared about many times here, here, and here. As one of the managers of Brookfield Asset Management shared with me, "Transforming Culture is the last bastion of alpha due to the low competitive nature of the endeavor."
To watch this episode on YouTube, see below or click here.
Ann has been involved in literally every aspect of the CMBS industry throughout her 35+ year career. She created from scratch and ran many large servicing shops before creating 1st Service Solutions in 2005. She has been an intentionally integral part in shaping the CMBS industry since its inception.
Ann founded 1st Service Solutions in 2005 to address what she saw to be a gaping hole in CMBS. Unlike ‘on book’ commercial real estate loans, there is no ‘banker’ for the borrower to speak to after securitization. In creating what was to become the first borrower advocacy space in commercial real estate, Ann has grown 1st Service Solutions into what is now known as the preeminent CMBS Borrower Advocate practice. The company has been featured on William Shatner’s ‘Moving America Forward’ show as a company changing the business landscape in America.
Ann has been and continues to be highly involved in industry leadership as a featured keynote speaker at conferences across the country speaking on CMBS structure, CMBS workouts, assumptions, and hot topics in the general CRE industry.
With the release of her book, ‘CMBS 911,’ Ann once again set out to meet an unmet need: explaining, in simplistic and straightforward terms, the roles, responsibilities, and motives of every individual or entity involved in the CMBS process. “The whole process can be overwhelming and confusing for the borrower and there’s always a lot on the line,” she explains. The book has gone on to become an industry bestseller and is being adopted into the Purdue College of Business Real Estate curriculum as well as other colleges and universities.
In addition to her own book, Ann’s expertise has been featured in ‘True Leaders: How Exceptional CEOs and Presidents Make a Difference by Building,’ ‘Trends in Commercial-Mortgage Backed Securities,’ and ‘The Law of Distressed Real Estate.’ Ann is also a prolific contributor to many, many real-estate and business-related publications having published 50+ articles, commentaries, and columns in such publications as the Commercial Real Estate Show, the Commercial Observer, Scotsman Guide, GlobeSt.com, Mortgage Bankers Magazine, National Real Estate Investor, Real Estate Business, Real Estate Forum, and Reuters among others.
Jurists frequently request Ann’s involvement in high-profile cases regarding commercial real estate because of her vast and varied experience. She has been called upon to provide expert reports, depositions, testimonies, and professional consulting services on many high profile cases.
Ann is a member of the Board of Directors of the Counselors of Real Estate (CRE) and has been an active member of C12, a Christian CEO group, for the past several years. In addition, she has previously served on or as the chairman of the Board of Directors for the Mortgage Bankers Association (MBA), the Commercial Mortgage Securitization Association (CMSA), the Multifamily Housing Institute, and the Real Estate Capital Recovery Association (RECRA).
Throughout her lengthy career, Ann has received many, many professional awards and citations. Among them are the induction in the Commercial Real Estate’s Hall of Fame, numerous times designation as a ‘Legend and Woman of Influence in Commercial Real Estate’ by Real Estate Forum, named a ‘Top 10 Most Distinguished Women in Real Estate’ by the Mortgage Bankers Association, selected as a member of the prestigious Real Estate Roundtable, and named as one of six ‘Most Influential Women in Commercial Real Estate’ by National Real Estate Investor to name a few.
Ann lives in the Dallas/Ft. Worth Metroplex and enjoys time spent with her family, especially her six grandkids.
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Contact Eric Schleien
Facebook | LinkedIn | Twitter | YouTube | GSCM | Instagram
Email: IntelligentInvesting@gmail.com
Contact Ann Hambly
1st Service Solutions | Email: ahambly@1stsss.com
Friday Oct 23, 2020
Friday Oct 23, 2020
Summary
In this episode of The Intelligent Investing Podcast, I sit down with Luis Carlos Sánchez. Mr. Sánchez is has a background in commercial law and is an avid net-net investor.
If you are interested in Net Net Investing, I would also recommend listening to a previous episode with the Founder of Net Net Hunter, Evan Bleker.
You can also watch Episode #122 of The Intelligent Investing Podcast on YouTube.
Net Net Stocks Mentioned
In this episode, we discuss three different net net stocks. Two of the companies either via myself or my clients are also shareholders in. One of the companies is a stock that Luis recently sold but it makes an interesting net net stock case study.
Trilogiq SA (Paris: ALTRI)
Trilogiq SA is a company based in France that specializes in the production and design of tubular structures for production lines. The company’s products and services are used to reduce non-productive areas, decrease operator movements, and optimize ergonomics, costs, and production times. It's a relatively simple and straightforward business.
This makes an interesting net net case study due to the fact that a few years ago the now CEO (who is also the founder) brought in a new CEO to help grow the company. The business, in turn, took on debt to start new projects and they didn't exactly work out too well. During this attempted transition, some value funds that like "strong-moat" businesses started buying the stock.
The Founder eventually took back the role of the CEO position in which he pretty much has absolute authority on the direction of the company being the largest shareholder at over 75% ownership in the business. During the past year, the Founder/CEO, Eric Courtin, started shutting down the money-losing projects and bringing the company back closer to its roots once again. They are also paying down debt and sticking to what they do best.
Support.com
We also highlighted Support.com (NASDAQ: SPRT) as it is another interesting situation. However, the company is much less compelling of an investment as it was back a few months ago pre-COVID. The company mainly focuses on online tech support which has been helped by COVID lockdowns.
Ref Holdings
We also discussed REF Holdings Limited (HKSE: 1631). The company provides ancillary services such as the provision of conference room facilities and financial printing services for the financial sector in Hong Kong. Ref offers a wide range of financial printing services, from typesetting, proofreading, translation, design, printing, web submitting, newspaper placement to distribution. Luis bought the stock below net cash and recently sold out.
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CONTACT ERIC SCHLEIEN
Tuesday Oct 20, 2020
Tuesday Oct 20, 2020
Summary
In this episode of The Intelligent Investing Podcast, I sit down with Harris Kupperman (also known as Kuppy). Kupperman is the Chairman and CEO of publicly-traded Mongolia Growth Group (YAK: Canada and MNGGF: USA). Kupperman is also the founder of Praetorian Capital and writer of one of my favorite investment blogs, Adventures In Capitalism. You can also watch this episode on YouTube.
On this episode we discuss St. Joe Company (JOE) and Cornerstone Building Brands (CNR)
See Blog Posts Below:
We also discuss Inflection Investing and the Tortoise Acquisition Arb deal in which Hyliion is getting acquired by Tortoise Acquisition (SHLL – USA)
Get In Touch With Kuppy
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CONTACT ERIC SCHLEIEN
Wednesday Oct 14, 2020
Wednesday Oct 14, 2020
SUMMARY
In this episode, Eric Schleien and Brian Langis discuss TikTok, social media, Facebook, and more. This episode was recorded before Oracle announced an intention to buy TikTok. This was more of a free for all and great discussion as always with Brian. Hope you enjoy! You can also watch this episode on YouTube.
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CONTACT ERIC SCHLEIEN
Wednesday Sep 16, 2020
Wednesday Sep 16, 2020
To watch this episode on YouTube, click here.
Summary
The music industry is growing for the fourth consecutive year, driven by the rise in online streaming. Platforms like Spotify, Youtube, Amazon Music, Pandora, and others are revitalized the industry which presents an opportunity to acquire intellectual property rights that pay royalties each time a song is streamed. Companies like Facebook, TikTok, and SnapChat have also recently announced that they will start paying royalties for music that is being used on their platforms which will only further increase the value of royalties are new users are starting to upload videos. The ICM Crescendo Music Royalty Fund (the “Fund”) is positioned to acquire songs in the $100,000 to $5 million range based on analyzing data such as historical royalty revenue and factors like artists tour schedule, number of playlists a song is on if the artists are releasing songs in the future, amongst other variables.
Data Analytics
To efficiently and objectively evaluate acquisition opportunities, the ICM Investment Management Inc. (the “Manager”) has developed an algorithm that will offer support in the acquisition process of material catalogs. Currently, 18 different input variables are analyzed to help predict the number of future streams of a particular asset. While machine learning mechanisms come to a conclusion without human intervention, a live tech expert will determine which input variable is useful and will place weights on each. While the model generates a certain prediction, the way we weight the variable will influence the anticipated future income streams.
Partnership
A Canadian music royalty fund was launched under the partnership between the Manager and Crescendo Royalty Corporation as an advisor to the Fund. Investors now have an opportunity to own music royalties and benefit from the rise in music and video streaming, generate incremental income, and have fun while doing it.
ICM Asset Management was founded in 2003 and currently has over $1 billion in assets under management in real estate and venture capital investments. Crescendo Royalty Corporation has been acquiring royalties since 2017 with interest in hits like LaLaLa by International pop star Shakira who performed at Super Bowl LIV and Blame it on the Alcohol by legend Jamie Foxx.
Additionally, Devo Harris was brought on as an Advisor and he is a Grammy Award-winning producer and songwriter who discovered, signed, and produced EGOT winner John Legend and has written for Kanye West, Britney Spears, Aretha Franklin & more.
Own Your Favorite Song
On the ICM Crescendo Music Royalty Fund website, you can submit a song you would like to own. The team will track down the rights holders and will attempt to acquire an interest in the song you submit. By investing in the fund, you can therefore potentially own a piece of your favorite songs.
Make Money While Listening to Music
The Fund also has a Spotify playlist so you can track all the songs they have acquired. If you listen to the playlist, the Fund will also make money every time you listen to a song on the playlist. To follow the playlist click this link.
How to Invest
Canadians are able to invest into the Fund directly through the Manager or through their own investment advisor.
US residents who are accredited investors can invest into a Delaware based Limited Partnership.
Show Links
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:
Contact Eric Schleien
Facebook | LinkedIn | Twitter | YouTube | GSCM | Instagram
Email: IntelligentInvesting@gmail.com
Thursday Aug 27, 2020
Thursday Aug 27, 2020
Subscribe
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Summary
Structural Balance
International Seaways
Distressed Mortgage Notes
Show Links
- Never Navios (blog post)
- Navios Bonds (SEC Filing)
Staying In Touch With Braxton Gann
Staying In Touch With Eric Schleien
Tuesday Aug 25, 2020
Tuesday Aug 25, 2020
To watch this episode on YouTube, click here.
Subscribe
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Summary
In this episode of The Intelligent Investing Podcast, Eric Schleien sits down with Mariusz Skonieczny. We discuss the shipping industry, COVID recovery stocks, value investing in general, Oroco Resources, and Mitcham Industries. We also discuss his new website, Microcap Explosions.
About Mariusz Skonieczny
Mariusz Skonieczny is the founder of Microcap Explosions and Classic Value Investors and the creator of Value Investing University. He is also the author of several books on the subject of investing.
He is a professional investor meaning and has written books and videos. He also, teach ballroom dancing.
Mariusz graduated from Indiana University in 2003 with a Finance degree. From 2003 to 2008, he was in the commercial real estate industry as an appraiser and broker. During the 2008/2009 financial crisis, he left the industry to start Classic Value Investors.
Staying In Touch With Mariusz Skonieczny
Staying In Touch With Eric Schleien
Thursday Aug 20, 2020
Thursday Aug 20, 2020
Robert is a Certified Management Accountant (CMA) who graduated Cum Laude with a BSBA degree in Finance and Economics from the University of Massachusetts, where he also earned his MBA degree in Accounting and Finance. He is an accounting and finance professional with an immense passion for stock and real estate investing, business, entrepreneurship, traveling, and spending time with his friends and family.
Show Links
- JL Collins (The Simple Path to Wealth) on Millennial Investing
- Pomp (Bitcoin, COVID-10, and Macro) on Millennial Investing
- Simon Erickson (Growth Investing) on Millennial Investing
- Gary Mishuris (Warren Buffett Value Investing) on Millennial Investing
- TIP's Real Estate Deal Analysis 101
- Chad Carson (Get Start in Real Estate) on Real Estate Investing
- Neal Bawa (COVID-19 and Finding Great Markets) on Real Estate Investing
- Real AF Podcast with Andy Frisella
- 1st Phorm
- 75Hard
- 75Hard book
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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!
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CONTACT ROBERT LEONARD
CONTACT ERIC SCHLEIEN
Friday Aug 07, 2020
Friday Aug 07, 2020
OVERVIEW
In this episode of The Intelligent Investing Podcast, Shana Sissel sits down with Eric Schleien to discuss the world of Alternative Investments. Shana is a seasoned investment professional with almost two decades of industry experience. She currently serves as the Chief Investment Officer at Spotlight Asset Group. She also serves as one of the most prominent public faces of the firm. Shana is a frequent contributor on Bloomberg, Fox Business Network, the TD Ameritrade Network, Yahoo Finance and CNBC and travels the globe as a sought-after investment conference speaker.
Mrs. Illinois International 2020
In November 2019 Shana was crowned Mrs. Illinois International 2020 at the North Shore Center for Performing Arts in Skokie, Illinois.
Financial Literacy For Girls
As Mrs. Illinois International she is a prominent advocate for improving financial literacy rates for women and for gender diversity within the finance industry through her platform Investing in Girls.
Through her work with organizations like Invest in Girls and Rock the Street Wall Street, Shana seeks to introduce financial concepts to high school girls and serves as a mentor for young women entering the field of finance. Shana also serves as a spokesperson for Women in ETFs (WE), an organization dedicated to improving gender diversity in the investment industry, where she is a member of the WE Speakers Bureau and Press Corp.
Women In Finance
In 2019, Shana was recognized for her talent as an investor and contributions as an advocate for women in finance when she was named a finalist for Index Portfolio Manager of the Year at the Women in Asset Management Awards. In March of 2020 she was named the winner of Citywire USA’s Women Driving Change in Manager Research & Investment Due Diligence award.
SHOW LINKS
SUPPORT 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:
CONTACT SHANA