Good morning!
I had a terrific day yesterday at the London Value Investor Conference. There was some difficulty in getting there, due to emergency repairs required to faulty signals in the Haywards Heath area.
So unfortunately, I missed the Charles Brandes presentation, but did arrive five minutes before the bell was rung for lunch, so I was first in the queue for a delicious roasted salmon in tomato sauce, with mixed vegetables, and spinach, tomato, and mozarella. Smashing! The venue this year was the QE Centre, opposite Westminster Cathedral, which was a very good location. The only niggle was the squeaky chairs - so every time any of the several hundred value investors adjusted their bottom, a loud squeak was emitted by their chair.
Going to LVIC each year is almost like a pilgrimage for me, having my value battery charged up again with the core concepts which work best, after a year of being confused by background noise & other competing, but inferior ideologies, such as momentum, etc.
I've taken about 19 pages of A4 notes, so have at least two good articles currently gestating. In particular, the Neil Woodford session was interesting, although the interviewer liked the sound of his own voice a bit too much - isn't that annoying, when an interviewer has a great interviewee in front of them, that everyone is dying to hear from, but the interviewer won't shut up?!
Just a quick review of a couple of RNSs, as I stumbled back to Islington last night, so have to catch the train back to Hove shortly, and pick up the Jag from the repair shop - it will be nice to be mobile again. She developed a misfire, so new coils were required.
Avation (LON:AVAP)
Credit rating - this aircraft leasing company has recently issued bonds at a 7.5% coupon. I queried this with their CFO, querying why they were paying such an apparently high funding cost. He replied that the new bond financing is in lieu of equity, so it only funds the c.10-15% equity element of the purchase price for new aircraft, leaving the bulk of the cost to be financed through much cheaper bank lending, c.4-5%.
This company is expanding at a rapid pace, and is run by experienced management, who know the sector well, and the inherent pitfalls. So quite an interesting company, in my view. Although…
