Buy and forget investing
How one man cashed in on his own carelessness in a big, big way
When he was younger, Max Fawcett wanted to make a mint in the markets. Now as the managing editor of Alberta Venture he gets to write about them. Close enough, right? He can be reached at email@example.com
by Max Fawcett
Sometimes it pays to be forgetful. Just ask 29-year old Norwegian engineer Kristoffer Koch, who bought 150 kroner (about $25 Canadian, give or take) worth of Bitcoins back in 2009 and then put them away in a metaphorical box. When he figured out how to re-open it – it took about a day’s worth of attempts to remember his password, according to a story in the Telegraph – he was able to cash them in for 1.1 million – yep, million – kroner, and use the proceeds to buy a flat in Oslo. His ROI? A cool 733,233 per cent. Click here for the cover story we published earlier this year about the decidedly more modest returns people are getting on the quasi-currency today, and how it’s being used by the people that hold it.
Meanwhile, in more conventional investment circles, AltaCorp Capital had an interesting note out yesterday that included a look at the relationship between the valuation (enterprise value / debt-adjusted cash flow) and changes in the leverage of Alberta energy companies. And while, generally speaking, higher amounts of balance-sheet leverage tend to result in thriftier valuations, the companies that have done the most work to reduce theirs in 2013 haven’t been rewarded – yet. “Overall,” the note said, “names that have seen a drop valuation while maintaining leverage levels (and CFPS growth expectations) are names that should see a reversal in their multiple, helping the name to outperform. Names that have seen the largest decline in valuation (while lowering leverage and growing CFPS growth expectations) include Birchcliff (TSE:BIR) Bonavista (TSE:BNP), Legacy (TSE:LEG), Tourmaline (TSE:TOU), and Trilogy (TSE:TET).”