Author Topic: SYTE - Enterprise Diversified  (Read 162974 times)

Gregmal

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Re: SYTE - Enterprise Diversified
« Reply #490 on: October 07, 2018, 01:15:34 PM »
It's sort of funny how the only real "investment" that SYTE management made was the HVAC and that was a horrible one.  But, now the investors who made that investment will be moving on to remake themselves as asset managers.  It really shows how much of a sham asset managers are.  Complete fee-driven business without performance being accurately accounted for.  This case has that written all over it.

Your comment doesn't make sense.  Yes HVAC has not performed well.  Why is the existing asset management business not an investment?  Why is Mt. Melrose not an investment?  Both are many times larger.  They are not moving to something new.  Maybe you are not familiar with what they have been doing the past year and a half.  Why are asset managers a sham??  They sell a service to clients just like other service businesses do.  Maybe you don't need it but that doesn't mean others don't.

Yea I've never understood this line of logic. In a world were casinos/betting are legit businesses, anonymous source based journalism is considered a legitimate business, and pay day loans are accepted as businesses, how is asset management a sham?


Foreign Tuffett

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Re: SYTE - Enterprise Diversified
« Reply #491 on: October 07, 2018, 02:00:42 PM »
It's sort of funny how the only real "investment" that SYTE management made was the HVAC and that was a horrible one.  But, now the investors who made that investment will be moving on to remake themselves as asset managers.  It really shows how much of a sham asset managers are.  Complete fee-driven business without performance being accurately accounted for.  This case has that written all over it.

Your comment doesn't make sense.  Yes HVAC has not performed well.  Why is the existing asset management business not an investment?  Why is Mt. Melrose not an investment?  Both are many times larger.  They are not moving to something new.  Maybe you are not familiar with what they have been doing the past year and a half.  Why are asset managers a sham??  They sell a service to clients just like other service businesses do.  Maybe you don't need it but that doesn't mean others don't.

Yea I've never understood this line of logic. In a world were casinos/betting are legit businesses, anonymous source based journalism is considered a legitimate business, and pay day loans are accepted as businesses, how is asset management a sham?

Asset management isn't a sham, but single manager funds ARE very different than normal businesses in that they are extraordinarily dependent on the services of a single person. If that person quits/retires/dies the business is gone -- or at least greatly diminished. Also, think about how much leverage the manager has over any entities that own parts of the GP.

IIRC the Fortress Investment Group/Graticule Asia Macro/Adam Levinson situation is a good example of how this dynamic can play out.

Gregmal

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Re: SYTE - Enterprise Diversified
« Reply #492 on: October 07, 2018, 02:36:09 PM »
It's sort of funny how the only real "investment" that SYTE management made was the HVAC and that was a horrible one.  But, now the investors who made that investment will be moving on to remake themselves as asset managers.  It really shows how much of a sham asset managers are.  Complete fee-driven business without performance being accurately accounted for.  This case has that written all over it.

Your comment doesn't make sense.  Yes HVAC has not performed well.  Why is the existing asset management business not an investment?  Why is Mt. Melrose not an investment?  Both are many times larger.  They are not moving to something new.  Maybe you are not familiar with what they have been doing the past year and a half.  Why are asset managers a sham??  They sell a service to clients just like other service businesses do.  Maybe you don't need it but that doesn't mean others don't.

Yea I've never understood this line of logic. In a world were casinos/betting are legit businesses, anonymous source based journalism is considered a legitimate business, and pay day loans are accepted as businesses, how is asset management a sham?

Asset management isn't a sham, but single manager funds ARE very different than normal businesses in that they are extraordinarily dependent on the services of a single person. If that person quits/retires/dies the business is gone -- or at least greatly diminished. Also, think about how much leverage the manager has over any entities that own parts of the GP.

IIRC the Fortress Investment Group/Graticule Asia Macro/Adam Levinson situation is a good example of how this dynamic can play out.

I don't disagree, but don't people realize that this is the product they are investing in when they chose to do so? I mean I get the complaints here, but at the same time I think it's also pretty naive if folks were buying THIS, because they wanted to be in the HVAC biz and didn't realize this was massively reliant on an asset manager...

That said, I've heard from quite a few respected people that asset/money managers make great CEO's(in a sarcastic, biding their time to bilk value type of sense), especially with small companies because they know the lingo, know which levers to bump to produce aesthetically promising but still ultimately hollow results and generally speaking play the long game. Not saying that's the case here but it's something I tend to watch out for with smaller companies run by finance guys.

globalfinancepartners

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Re: SYTE - Enterprise Diversified
« Reply #493 on: October 07, 2018, 03:35:42 PM »
So y'all are saying that by going from an HVAC roll up strategy to a group of one-man money management businesses SYTE is making the same mistake twice because it's an identical key-man business.  Seems possible but I feel the money mangers will be a lot more loyal.  Time will tell

Spekulatius

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Re: SYTE - Enterprise Diversified
« Reply #494 on: October 07, 2018, 05:58:19 PM »
To me, it always looked like SYTE had many (perhaps too many) lines of business, and now they are trimming those that don’t work out or don’t have a future long term, I don’t know if this doesn’t make sense, what does? Should Berkshire have stuck with the textile business?
« Last Edit: October 08, 2018, 09:22:09 AM by Spekulatius »
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Sportgamma

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Re: SYTE - Enterprise Diversified
« Reply #495 on: October 08, 2018, 03:31:30 AM »
Although a permanent loss of capital is never a good thing, at least I would credit them for jumping out of the HVAC hole early. I think it's actually a much harder thing to do than to keep on digging.

writser

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Re: SYTE - Enterprise Diversified
« Reply #496 on: October 08, 2018, 04:05:26 AM »
Bit odd that HVAC wasn't mentioned at all in the letter. Stay tuned for additional details, I guess.
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InelegantInvestor

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Re: SYTE - Enterprise Diversified
« Reply #497 on: October 08, 2018, 04:15:15 AM »
Bit odd that HVAC wasn't mentioned at all in the letter. Stay tuned for additional details, I guess.
Not odd at all.
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Spekulatius

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Re: SYTE - Enterprise Diversified
« Reply #498 on: October 08, 2018, 04:19:24 AM »
Bit odd that HVAC wasn't mentioned at all in the letter. Stay tuned for additional details, I guess.

Itís not odd. If it doesnít get mentioned, it means it get sold off.  Itís implied ,the way I read this letter. I have been in the corporate world long enough to read the tea leaves, and this seem as clear as they come.
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writser

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Re: SYTE - Enterprise Diversified
« Reply #499 on: October 08, 2018, 04:33:25 AM »
Itís not odd. If it doesnít get mentioned, it means it get sold off.  Itís implied ,the way I read this letter. I have been in the corporate world long enough to read the tea leaves, and this seem as clear as they come.

What I was trying to convey: that they possibly want to get rid of the HVAC business isn't odd at all. But if HVAC is a disaster then I believe our great value investing hero WEB would say just that in his shareholder letter. I'd expect the same from these guys. But maybe there are some (legal) issues with that that I am not aware of - explaining the 'stay tuned for more details' in the shareholder letter.
« Last Edit: October 08, 2018, 04:35:32 AM by writser »
When you are dead, you do not know you are dead. It's only painful and difficult for others. The same applies when you are stupid.