In today’s briefing:
- Softbank Group – Didi Relief and ZME Pain Highlight Multiple Potential Outcomes
- Parent-Subsidiary Listing Investment Strategy Update (5)
- Rhizome Partners Q1 2022 Investor Letter
- Diamond Hill Mid Cap Fund Q1 2022 Market Commentary
- Diamond Hill Large Cap Fund Q1 2022 Market Commentary
- Horizon Kinetics 1st/2nd Quarter Interim Commentary
Softbank Group – Didi Relief and ZME Pain Highlight Multiple Potential Outcomes
- Didi shares jumped 24% on reports regulatory relief was at hand. That is good news for Softbank although the halo effect boosting Alibaba had more of a valuation impact
- Less noticed but also relevant as a potential outcome is the de-listing of Zhangmen Education which fell 50% Monday and is down 97% for VF in total
- Softbank shares trade at a 43% discount to fair value and remain range-bound. Tech market sentiment remains the primary driver and we continue to be cautious
Parent-Subsidiary Listing Investment Strategy Update (5)
- This article updates NTT DATA by referring my earlier article although Hopes of NTT Data becoming a wholly owned subsidiary are far from fulfilled after the May 9th news conference.
- My previous article stated reorganization with NTT’s overseas operations is priority to strengthen NTT Data’s overseas business. NTT Data’s stock price is highly valued while NTT Data’s profitability is lacking.
- The timing of NTT Data becoming a wholly owned subsidiary will depend solely on how quickly the company can raise its profitability while it focuses more on domestic business.
Rhizome Partners Q1 2022 Investor Letter
- Rhizome Partners LP is a Delaware limited partnership, aims to achieve long-term capital appreciation while limiting the risk of loss.
- For the first quarter of 2022, Rhizome Partners generated a net loss of 9.9% versus a 4.6% loss.
- We may be experiencing a regime change in the market in 2022.
- Investors seem to have started to favor profitable companies trading at low multiples of existing cash flow over companies with uncertain payoffs in ten years.
- We still favor good businesses with healthy margins, good balance sheets, structural moats, high returns on invested capital, rational competitors, pricing power, and reasonable growth.
Diamond Hill Mid Cap Fund Q1 2022 Market Commentary
- Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline and client alignment.
- Amid a rocky market quarter overall, Diamond Hill Mid Cap Fund’s negative returns still outpaced the Russell Midcap Index by a healthy margin in Q1.
- After a strong rebound in 2021, global GDP growth is expected to moderate in 2022.
- From current levels, equity market returns over thenext five years are likely to be below historical averages.
Diamond Hill Large Cap Fund Q1 2022 Market Commentary
- Diamond Hill invests on behalf of clients through a shared commitment to its valuation-driven investment principles, long-term perspective, capacity discipline and client alignment.
- During a volatile quarter, Diamond Hill Large Cap Fund held up better than the Russell 1000 Index by a decent margin in Q1.
- After a strong rebound in 2021, global GDP growth is expected to moderate in 2022.
- From current levels, equity market returns over the next five years are likely to be below historical averages.
Horizon Kinetics 1st/2nd Quarter Interim Commentary
- Horizon Kinetics LLC, founded in 1994, is an independently owned and operated investment adviser. With a long-term absolute return mindset, and based on first-hand research, our portfolios tend to be concentrated and avoid tracking or mimicking any benchmark or index.
- Texas Pacific Land Corp is entering into a strategic alliance with two cryptocurrency mining companies to develop a mining operation on some of TPL’s land.
- The public discussion has now turned to how “aggressive” the central bank will be in raising interest rates in order to try to stem inflation.
- Debt-to-GDP ratio can increase for a very prolonged period of time, like the 39 years from1980 to 2019, without the economy experiencing serious inflationary pressures.
- If the supply of oil were to grow even as high as 2% a year, while the supply of currency to pay for it is growing at 12% a year, then the price of oil measured in currency is going to go up.
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