Friday Morning Coffee 144: Change is around the corner

260321 Friday Morning Coffee

Friday Morning Coffee 144: Change is around the corner

With the hindsight bias of course, but sometimes we get a sense that not all investment decisions are tricky. Follow the established market wisdom and sit out a quarter or two; Change is around the corner. Today we would like to bring your attention to one such investment decision that we took back in 2019 that can simply be framed around three markets wisdoms;   “You should invest in a business that even a fool can run, because someday a fool will.” …Warren Buffett “Invest in a good business with a bad management and wait for heads to roll” …Ashwath Damodaran “Just as the London buses, profit warnings come in threes” …Anonymous   The business under consideration is Norma Group. The company produces clamps, couplings and connectors and fluid handling devices. It services wide range of industries and customers. No single customer account for more than 5% of the revenues. Norma has the product range of over 40 thousand SKUs and sells over 2 billion units annually, which has on average ASP of 60 cents EUR. The aspect of the case that we liked the most was the visibility the business had historically shown on the costs and operation side.