Cocoa Beans (English version at the end)
Una breve historia sobre granos de cacao, inversión y la búsqueda de valor
En la década de los 50, Warren Buffett obtuvo sus mejores años en términos de rentabilidad. Según ha comentado él mismo en varias ocasiones, en estos años consiguió hacer crecer su cartera a un ritmo del 50% anual compuesto.
Posteriormente, en 1957 creó su sociedad de inversión privada o Partnership, con la que obtuvo una rentabilidad anualizada del 31.6% hasta el momento de su cierre en 1968. En el mismo periodo, el Dow Jones tuvo un rendimiento anualizado bastante menor, del 9.1%.
En su primera carta a los socios de su Partnership, entre otros detalles, hizo referencia a las principales pautas de su estrategia de inversión. Entre ellas destacó la categoría “work-out”, que la definió de la siguiente forma:
“A work-out is an investment which is dependent on a specific corporate action for its profit rather than a general advance in the price of the stock as in the case of undervalued situations. Work-outs come about through: sales, mergers, liquidations, tenders, etc. In each case, the risk is that something will upset the applecart and cause the abandonment of the planned action, not that the economic picture will deteriorate and stocks decline generally”.
En Cocoa Beans pretendemos recuperar esta época más desconocida de este afamado inversor, pero que hizo a Buffett ser Buffett, es decir: conseguir alzarse como un inversor millonario a partir de un capital modesto en un tiempo relativamente corto.
Para ello, nos centraremos en buscar inversiones relacionadas con situaciones especiales o “work outs”, intentando analizar situaciones tales como: spin-offs, arbitrajes, fusiones, liquidaciones, recompras masivas y ocasionalmente compañías muy infravaloradas cotizando por debajo de su valor de liquidación o “cigar butt stocks”.
El término Cocoa Beans que da nombre a este blog deriva de una historia de inversión relacionada con una empresa de granos de cacao, que posteriormente ha sido ampliamente conocida y a la que se ha hecho referencia en cartas de Berkshire Hathaway, charlas del mismo Warren, o incluso en su biografía autorizada The Snowball: Warren Buffett and the Business of Life, de Alice Schroeder.
La historia ocurrió en los años 50, en pleno repunte de los precios de cacao, cuando Ben Graham y Warren Buffett identificaron una situación de arbitraje, en la que el dueño de Rockwood, una compañía productora de dulces, ofrecía a sus accionistas la posibilidad de cederle sus acciones valoradas en 34$, por granos de cacao valorados en 36$.
Ben Graham le pidió a Warren Buffett que aprovechara esta oportunidad de arbitraje para Graham-Newman Corporation, el partnership fundado por Ben Graham, obteniendo 2$ por acción. Waren Buffett así lo hizo, pero además, tras analizar profundamente la compañía, descubrió que tenía un valor de liquidación, debido a los granos de cacao que poseía, de más de 80$ por acción. Esto explicaba la “generosa” oferta inicial del dueño de Rockwood en el intercambio de acciones por granos de cacao. Buffett compró acciones de Rockwood para su propia cuenta e ignoró la oferta de vender sus acciones por granos de cacao. Cuando el mercado finalmente descubrió el valor de las acciones de Rockwood, Buffett ganó 58$ por acción frente a los 2$ por acción que ganaron los arbitrajistas.
Esta historia captura el espíritu que pretendemos emular en este blog: acudiremos allí donde podamos ganar algo con independencia de la macro, la inflación, los bancos centrales o si la acción es “value” o “growth”.
Os invitamos a acompañarnos en esta aventura donde trataremos, con humildad, de encontrar nuestros propios “Cocoa Beans”.
Cocoa Beans
A brief history of cocoa beans, investment, and value seeking
In the 1950s, Warren Buffett experienced his best years in terms of profitability. He has stated on several occasions that during this decade, he was able to grow his portfolio at a compounded annual growth rate of 50%.
Subsequently, in 1957, he created his private investment partnership, which generated an annualized return of 31.6% until its closure in 1968. During the same period, the Dow Jones had a much lower annualized return of 9.1%
In his first letter to his partnership's investors, Buffett outlined the key principles of his investment strategy. Among them, he highlighted the 'work-out' category, which he defined as follows:
“A work-out is an investment which is dependent on a specific corporate action for its profit rather than a general advance in the price of the stock as in the case of undervalued situations. Work-outs come about through: sales, mergers, liquidations, tenders, etc. In each case, the risk is that something will upset the applecart and cause the abandonment of the planned action, not that the economic picture will deteriorate and stocks decline generally”.
At Cocoa Beans, we aim to revisit this lesser-known period of this renowned investor's career, a period that truly made Buffett, Buffett: starting with modest capital and achieving millionaire status in a relatively short time.
To achieve this, we will focus on seeking investments related to special situations or "work-outs", analyzing situations such as spin-offs, arbitrages, mergers, liquidations, massive buybacks, and occasionally, significantly undervalued companies trading below their liquidation value or "cigar butt stocks."
The name Cocoa Beans comes from an investment story involving a cocoa bean company, which has since become widely known and has been referenced in Berkshire Hathaway letters, talks by Warren himself, and even in his authorized biography, The Snowball: Warren Buffett and the Business of Life, by Alice Schroeder.
The story took place in the 1950s, during the cocoa price boom, when Ben Graham and Warren Buffett identified an arbitrage opportunity where the owner of Rockwood, a candy company, offered shareholders the chance to exchange their shares, valued at $34, for cocoa beans valued at $36.
Ben Graham asked Warren Buffett to take advantage of this arbitrage opportunity for Graham-Newman Corporation, the partnership founded by Ben Graham, earning $2 per share.
Warren Buffett did so, but after thoroughly analyzing the company, he discovered that it had a liquidation value, due to the cocoa beans it owned, of over $80 per share. This explained the "generous" initial offer from the owner of Rockwood to exchange shares for cocoa beans. Buffett bought Rockwood shares for his own account and ignored the offer to sell his shares for cocoa beans.
When the market finally discovered the value of Rockwood shares, Buffett earned $58 per share compared to the $2 per share earned by the arbitrageurs.
This story captures the spirit we aim to emulate in this blog: we will go where we can earn something, regardless of the macro, inflation, central banks, or whether the stock is "value" or "growth.
We invite you to join us on this adventure as we humbly seek out our own "Cocoa Beans.