Turnaround Investing Blog

George Putnam, one of the country's leading turnaround and distressed investing professionals, shares his timely insight on the economy and turnaround investing opportunities.

Diversified Financials

As Expected: Cryptocurrencies Evaporate

It’s been a tough year for cryptocurrencies. From its frothy peak price of $19,205 in mid-December 2017, the price of one Bitcoin has collapsed over 65% to about $6,560. Other variants haven’t been so lucky: according to several websites that track them, as many as 800 to 1,000 cryptocurrencies have become effectively worth zero.

In our December 2017 issue of The Turnaround Letter, we shared with subscribers our views on the surge in investor enthusiasm: “…much of the cryptocurrency frenzy reminds us of the internet bubble of 18 years ago.”

As for the fate of most cryptocurrencies, it seems they have followed the path of similar fads. Our prognosis of “Just as most dot-coms were wiped out, we believe most cryptocurrencies will eventually become worthless” appears to be playing out.

A recent Bloomberg article (“Bitcoin Bloodbath Nears Dot-Com Levels as Many Tokens Go To Zero”) describes the current situation well.

Our December article on Bitcoin was a step-out for us as we focus almost exclusively on individual, out of favor stocks with real value and solid turnaround potential. The cryptocurrency bubble caught our eye as something exactly the opposite.

Identify & Profit from Distressed Investing

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Amazon = US GDP 1970

Amazon joined Apple in reaching a $1 trillion market capitalization. $1 trillion is about the same as the total value of New York City property and the total value of loans at JP Morgan, the nation’s largest bank in terms of assets. Jeff Bezos’ $160 billion stake would place him (personally) as the #33 largest company in the S&P 500 in terms of market cap, next to Coca-Cola, Disney and Netflix. We aren’t bold enough to predict whether the shares will continue upwards or if they are in a bubble reaching maximum inflation. Setting aside for a moment their investment prospects, let’s admire the truly remarkable milestone that these two companies have reached. Read More.

EV/EBITDA: What Is It & Why Are We Using It More?

In reading recent editions of The Turnaround Letter, you have probably noticed that we are increasingly using EV/EBITDA as a valuation measure, rather than the better-known price/earnings multiple.  We thought it might be useful to describe this measure and why we like it.

Read More.

Turnaround Letter Stock Pick Named Top Performer of 2017

 

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What Last Year's Top Stock Pickers Are Buying in 2018

 

This Forbes write-up follows up on the recent Top Stock Tips report--naming The Turnaround Letter's Crocs recommendation the top performer of 2017: With 90% gains, CROX beat out 100 other investment ideas included in the report; and the stock continues to have value investing appeal, according to Putnam.

 

George notes, "We see additional upside for the stock in 2018 as management's efforts continue to bear fruit, though the gains will likely be more muted than we saw in 2017."