Professor Glen Arnold

N Brown - The business model

07 Jun 2019 @ 11:23
The way I see N Brown’s (LSE:BWNG) business model is that it sells clothes etc., to people at below cost as a deliberate strategy. That is, it makes a gross margin on the items it sells of around 52% (i.e. if it buys a dress from China for £28.80 it sells it to a Brit […]
 

N Brown – I’ve bought some more

06 Jun 2019 @ 10:15
I’ve more than doubled my stake in N Brown (LSE:BWNG) at £1.30 per share following the release of the preliminary results a couple of weeks ago. It fits nicely into my Modified price earnings ratio portfolio. I first bought N Brown shares last August at £1.42, so I’m pleased to pick up more at an […]
 

Reward managers, yes, but only when warranted - Warren Buffett's ideas

05 Jun 2019 @ 11:30
Just before I move on to post some analysis about a UK company (tomorrow’s newsletter) I thought I’d reproduce Warren Buffett’s ideas on how managers should be rewarded by shareholders.  The points are as profound yet simple today as they were back in 2005 when they were written down in Buffett’s letter to Berkshire shareholders. […]
 

What investors can learn from Warren Buffett's Gillette investment

31 May 2019 @ 10:19
Warren Buffett initially invested $600m of Berkshire Hathaway’s cash in Gillette’s preferred stock giving a 8.75% yield way back in 1989. It wasn’t until 2005, after the preferreds had been converted to Gillette common stock and then to shares in P&G, that he committed any more money, when he topped up his P&G holding with […]
 

Warren Buffett's investment in Duracell

30 May 2019 @ 09:13
When Duracell was bought by Gillette in 1996 for $7.8bn it was the market leader in alkaline batteries; it’s brilliant marketing, with the Duracell Bunny, had created a global brand. Duracell accounted for one-quarter of Gillette’s sales.  But it didn’t take long for competitors to offer cheaper versions; a price war ensued and two years […]
 

Warren Buffett's investment in Gillette becomes an investment in Procter and Gamble

29 May 2019 @ 09:27
In international markets, Gillette and Procter & Gamble face a mighty competitor in the Anglo-Dutch giant Unilever, with its terrific range of personal care and food products.  Unilever was bigger than both the American companies in many countries and enjoyed greater leverage with retailers. Jim Kilts, CEO of Gillette approached P&G with a plan to […]
 

Gillette's golden years after Warren Buffett bought

28 May 2019 @ 10:02
Warren Buffett bought into Gillette just as it was about to get the benefit from years of R&D spend.  This newsletter describes the period after Buffett bought in. It also looks at why Buffett held shares in Gillette after they had more than doubled. The Sensor In October 1989 the Sensor razor was unveiled, offering […]
 

Gillette's deal with Warren Buffett

24 May 2019 @ 10:22
In the early and mid-1980s Gillette was making good profits and this made the company attractive to a number of Wall Street players who had easy access to vast amounts of debt capital (this the era of the junk bond craze). Ronald O. Perelman, who had taken control of Revlon for $1.8bn the year before, launched […]
 

Investing in consumer brand economic franchises - lessons from Warren Buffett's Gillette investment

23 May 2019 @ 12:12
The case study I’m going to discuss in a series of newsletters demonstrates the value of recognising economic franchises formed over time by making a deep impression on the minds of consumers; people form attachments to products they have long been familiar with and have come to trust.  Once a brand has this “mind-share” it […]
 

SpaceandPeople – Competitors and Directors

20 May 2019 @ 09:01
SpaceandPeople (LSE:SAL) joined the AIM market in December 2004.  It sold 600,000 shares at 50p each (MCap of £5.7m).   These shares rose to £2.20 in 2008, then fell to around the issue price 2009-2012, rising to £1.52 in 2014.  Now they trade at 12p – 14p. This volatility reflects intermittent optimism about the potential of […]
 
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