I can relate to your story on Meta with my investment in Kaspi, where I was a buyer all the way to July 2022. The political situation in 2022 in and around Kazakhstan hammered the valuation.
Yeah I've been following Kaspi aswell. No position. It has been crazy volatile. It went to a ridiculous valuation and earnings growth plus a small amount of buybacks did the work.
If it's been at 15-20% earnings yield for a long-time. Probably capital allocation is really bad. Else they would close the discount buying back shares
Well in many cultures there is low dividend tax rate and no witholding tax so with a high dividend, the investor is supposed to do his own buyback by reinvesting the dividend. Not perfect, but I take that.
Buying back does close the discount IMO. If you can retire 15% of shares per year. It compounds. And eventually the market will have to give you a higher multiple. That's why the USA market has a higher multiple than markets that do zero buybacks. Just my opinion. Not buying back at low multiples is bad capital allocation
Great explanation of your point of view, very illustrative. Thanks for the writing.
I can relate to your story on Meta with my investment in Kaspi, where I was a buyer all the way to July 2022. The political situation in 2022 in and around Kazakhstan hammered the valuation.
Yeah I've been following Kaspi aswell. No position. It has been crazy volatile. It went to a ridiculous valuation and earnings growth plus a small amount of buybacks did the work.
uncertainties around politics and large growth is a good cocktail for volatility
for me its more valuation based. If its like giving you a 20% stable earnings yield, even if the business is ugly and boring, that's a fat pitch.
15% is also a fat pitch
If it's been at 15-20% earnings yield for a long-time. Probably capital allocation is really bad. Else they would close the discount buying back shares
Well in many cultures there is low dividend tax rate and no witholding tax so with a high dividend, the investor is supposed to do his own buyback by reinvesting the dividend. Not perfect, but I take that.
Buying back also does not close discounts.
Buying back does close the discount IMO. If you can retire 15% of shares per year. It compounds. And eventually the market will have to give you a higher multiple. That's why the USA market has a higher multiple than markets that do zero buybacks. Just my opinion. Not buying back at low multiples is bad capital allocation