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I bought LOGI at US$9.5995 on 28 September 2011 and sold it at US$10.50 on 24 October 2013. As a result, I made a profit of 16.5% including dividends and transaction costs. I am fortunate to make respectable return on this 2 years investment in LOGI.
All of us know so much about Logitech International SA. The rational of investing in LOGI is as follows. In Q4 2011, it was heavily short-sold because a lot of short sellers thought that the era of keyboard and mouse will end as touch-screen feature will completely replace the mouse and keyboard. At that time, LOGI has sturdy balance sheet quality such that it can withstand all kind of financial and economic disasters. Because of that, I thought that this kind of sentiment was overblown and young people and our generation will still use keyboard and mouse as a form of assurance such that we can control where we tell mouse and how fast we type. They will still exist in the office for the next few decades. What about at personal homes – gamers can never do without mouse and keyboard to play WOW, FPS games and other sort of games.
With that in our mind, what about LOGI’s competitors? Microsoft is fierce competitor but it is slow in reacting to trends of the keyboards and mouse. Razor, being run by Singaporean, focus too much on gaming experience but less focus on quality. LOGI produces all types of mouse and keyboards for such specific usages while retaining the quality. At home, I have more Logitech devices than Microsoft devices!
Few weeks or months after our purchase, short-sellers were clobbered. They have to cover their asses by buying shares at higher price. It rose to USD$13+. However, I never sold because I believe that the intrinsic value is much higher than that.
Unfortunately, ex-CEO was too slow to react the changing landscape of desktop and mobile computing. Nobody expected that PC manufacturers started to develop touchscreen monitors for desktop. The penetration of tablet is so great that people are getting comfortable. I personally recognize it after I bought tablet. However, there is a need for mouse and keyboard for certain moments.Previous CEO resigned as he knew that he had lost the plot. Interim CEO was appointed to stabilize it while searching suitable person with sufficient time. New CEO, Bracken Darrell, took over and took time to create a suitable strategy to restore Logitech’s profitability in the face of changed computing landscape. Few months later, the result is showing. He did a good job for making Logitech devices more relevant for mobile uses and tablets. Logitech’s keyboard for ipad is one of top 3 popular devices.
I have been talking about mouse and keyboards. Logitech owns a subsidiary called Ultimate Ears (UE). It is excellent company that makes quality earphone, headphone and portable speakers for average Joe. UE products are selling quite well.
All that said, you can find that Logitech is really impressive company. However, Logitech has reduced its balance sheet size to survive for approximately 1.5 years. As a result, margin of safety has decreased in terms of balance sheet quality.
Right now, it is good time to sell LOGI as I want to reduce the exposure to computing technology industry. At the same time, I cannot see how the future pans out for hardware computing. In 2011, I know that keyboards and mouse will not cease to exist but poor management of ex-CEO destroy the shareholder’s value. Thankfully, margin of safety protect us and enable us to make money.
Post mortem of CNTY
I am quite speechless that CNTY has reached at $5 plus price level this year. I guess I didn't have much patient to wait after learning that managing casino is not highly profitable business I would thought. Attracting the customers to the casino is the key in this case.
If I kept CNTY till now, I probably achieve higher return. Nevertheless, I am happy to sell CNTY and bought another US stock, which appears to be making positive unrealized return for me.
BooksTitle: Measure Up! How to Measure Corporate Performance (2nd Edition)
Author: Richard L. Lynch and Kelvin F. Cross
Rating:7/10
Remark: This book discuss their creation of performance pyramid. It emphasis why traditional costing method does not work in today's working environment due to changing emphasis of direct labour and overhead.
Title: The Shipping Man
Author: Hope, Jeremy
Rating: 10/10
Remark: The story about shipping industry seems to be real. There is sufficient emotions written on the book that the readers cannot help themselves to grin.
Title: Beyond Budgeting: how managers can break free from the annual performance trap
Author:Hope, Jeremy
Rating: 9/10
Remark: It is very convincing message to tell us why we should not use traditional cost methods in fast changing working environment.
Drama and Movies
Title: Catch Me Now (Hong Kong Drama 2008)
Synopsis:
A leader of a team has a belief that laws cannot put some evil guys into jail. Therefore, he takes his own hands to be robin hood, stealing money that are obtained through vice and donate a large percentage of it into charity. However, cops will not like it. These cops catch them one day.
Rating: 8/10
Remark: It is good chemistry. It kinda remind me of Take 5 (Japanese drama 2013).
Lawyers of Korea (Korean Drama 2008)
Synopsis:
A guy ditched his girlfriend not telling the reason why he has to fly America. He only left voice message to her voicebox. She was all alone to pay monthly installment for the apartment. 6 years later, he is back to Korea. He is competing with her over a divorce case as lawyers.
Rating:7/10
Remark: It is much more about love story rather than lawyers.
Pain & Gain (Hollywood Movie 2013)
Synopsis:
This is based on true story life but it is modified to fit in Hollywood standard. It goes by a guy who do not want to be burden by unpaid bills. To resolve that, he want to rob rich guy. How does the plan work out?
Rating:6/10
Remark: It is decent show.
Bullet to the Head (Hollywood Movie 2013)
Synopsis:
A professional hitman has no choice to work with a cop to find out who is the mastermind of the job as well as the murder of the hitman's partner.
Rating:7/10
Remark: Nice pace. Straightforward story.
New World (Korean Drama 2013)
Synopsis:
A cop is assigned as a spy in the gang so as to provide intelligence to the cops. The head of the gang was killed. There is a silent cold war between two obvious successors. What will they do each other? What will the cops plan to deal with this matter?
Rating:9/10
Remark: Brilliant plot. It is comparable to Hong Kong's infernal affairs.
The Academy (Hong Kong Drama 2005)
Synopsis:
The story starts with a guy who wants to prevent a cop trainer to win his mother's heart. That trainer gave him a challenge that if he graduate cop school with silver whistle, he will give up chasing her. It is all about training recruits to be policemen and policewomen
Rating:8/10
Remark: It is good show with plenty of emotions.
Now You See Me (Hollywood Movie 2013)
Synopsis:
The FBI and a lady from Interpol is trying to figure out how the 4 magicians manage to steal the money out of the bank at Paris and gave them to the audience in Las Vegas within minutes. There are the next two acts for the magicians to do. FBI is trying to arrest them with sufficient evidences.
Rating:7/10
Remark: Stunning ending twist together with powerful magic.
World War Z (Hollywood Movie 2013)
Synopsis:
Humans, after bitten by humans, are going to attack every humans. Gerry and his family observe this as it has began in the bright morning. Every country is under attack. Gerry's former employee of United Nation hired him to investigate why they are doing this and what kind of virus it is.
Rating:8/10
Remark: Very intelligent movie with appropriate dosage of actions.
Welcome to the Punch (British Movie 2013)
Synopsis:
A cop was trying to track impossible-to-catch criminal but his leg was shot. In few years later, that criminal came back to his jurisdiction because his son was in trouble. Can he arrest him?
Rating: 7/10
Remark: Fine story.
Dragon Ball Movie 14 The Battle of God (Japanese Animation Movie 2013)
Synopsis:
God of destruction of 7th universe is seeking for Super Saiyan God as he was thought to have seen the latter in his dream. If he doesn't find the answer, he will destroy the earth.
Rating:7/10
Remark: Fine story for any Dragon Ball fans.
Pacific Rim (Hollywood Movie 2013)
Synopsis:
Ever since monsters appeared, making huge damage on each country in the world, all countries work together to create mechanical monsters to fight them.
Rating:9/10
Remark: Good story together with powerful sound effects.
Iron Man 3 (Hollywood Movie 2013)
Synopsis:
Tony Starks is trying to reconcile with the two options of either keeping the suits or go surgery to remove shrapnel in his heart.
Rating:8/10
Remark: Astonishing long movie with puzzling ending coupled with explosive actions.
Good Doctor (Korean Drama 2013)
Synopsis:
Park Si On, who has autism, was about to be employed as pediatrics doctor. However, some members in the board of directors and some professors have reservation about him. The guardian of Park Si On, the director of the hospital put his position in the stake. Can Park Si On proved them wrong?
Rating:8/10
Remark: The actor acted very well. The story is reasonable that the viewers will go along the flow.
Fast and Furious 6 (Hollywood Movie 2013)
Synopsis:
A boss of the retired car stealing team was 'recalled' by a federal cop in the form of recruitment to catch a dangerous criminal with his team. The latter is trying to steal parts in different places. These parts are required to build a gadget to jam the communication. The deal for that boss, retired criminal, is to get pardon if he recall his teammates to catch him.
Rating:7/10
Rating: As usual, there is fast paced actions.
The Heat (Hollywood Movie 2013)
Synopsis:
One female FBI office was given the task to catch the drug lord in Boston. She met a female plainclothes police officer. They were on the same track catching that drug lord.
Rating:7/10
Remark: Too much profanity.
The Lone Ranger (Hollywood Movie 2013)
Synopsis:
Tornto, Indian native in America, tells the story to a young boy about the life of the lone ranger.
Rating:8/10
Remark: I think the story is slowly developing with top class facial acting by Johnny Depp.
Star Trek Into the Darkness (Hollywood Movie 2013)
Synopsis:
A team of USS enterprise is embarking unknown journey in order to capture unknown identity who killed the former captain of USS enterprise.
Rating:7/10
Remark: Although I never understood Star Trek in the past, this story in that movie is decently fine.
Man of Steel (Hollywood Movie 2013)
Synopsis:
Kent Clark is trying to find out how he is as he knows that father and mother are not his real parents. If he knows the truth, what will he do?
Rating:8/10
Remark: Stunning CGI acts.
Tony Del Piero wrote and posted at at 1:34 am
