Articles

Accounting vs Economic Reality Part 2: Intangibles

This is our second entry in a multi-part series on some of the common failings of GAAP (generally accepted accounting principles) when it comes to truly understanding the economics of a business. GAAP accounting is the accounting you will find if you open most US publicly reported financial statements. These are the numbers commonly used...

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Accounting vs Economic Reality Part 1: Stock Based Compensation

This will be the first in a series of articles covering a fundamentally important concept in equity investing: that there is a difference between reported accounting numbers and actual economic reality. GAAP (Generally Accepted Accounting Principles) is the accounting you will find if you open most publicly reported financial statements. These are the numbers commonly...

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Chinese VIE Structure: Recent Developments

We wrote back in November about the risks posed to Western investors by the Chinese VIE (Variable Interest Entity) structure. Following recent announcements by the Chinese regulator, we believe those risks have just increased, so we thought it best to revisit the issue and provide an update. For those unfamiliar with the VIE structure, please...

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Second Quarter 2021 Update

GCI Select Equity Q2 2021 We are pleased to report another positive quarter in both absolute and relative terms. Our GCI Select Equity strategy ended the first half of 2021 up 18.1% gross of fees. For comparison, the S&P 500 ended up 15.3%: Despite these continued positive results, you will likely have noticed that in a...

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Ocado (OCDDY): Automating the Really Difficult Stuff

We at Globescan mainly invest in US-based companies for fairly straightforward reasons: the regulatory environment is strong, the business environment friendly, there is a culture of entrepreneurship, and some of the most exciting companies in the world are US domiciled. That being said, there are occasions when we find companies overseas that offer something...

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Our Thoughts on Inflation

Over the past few weeks, you will likely have noticed increased mentions of inflation in the news. The March print for CPI (average price of consumer goods and services) came in rather high: +4.2% year-over-year. This is after many, many years of persistently low inflation. How concerning is this? Despite the markets knee jerk...

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GFL Environmental: From Trash to Treasure

During the first quarter 2021, we initiated a new position in GFL Environmental – a waste disposal company based in Canada. The Industry The waste industry has historically been characterized by high barriers to entry (land use regulations on landfills as well as scale economics due to route density), stable non-cyclical demand, exceptional pricing power, and...

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First Quarter 2021 Update

Dear Clients, We are pleased to report another positive quarter in both absolute and relative terms. Our GCI Select Equity strategy ended the first quarter of 2021 up 8.01% gross of fees. For comparison, the S&P 500 ended the quarter up 6.17%. Over a trailing three-year period, our strategy has now compounded client capital at a...

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Benchmarking Issues Part 2

Our last article, Indexing, Benchmarking, and the Problems Therein, generated a lot of positive feedback so we have taken the time to deepen the discussion further. As a quick refresher – Benchmarks and the Indices they are derived from are typically used by firms such as ours to provide some element of performance comparison and...

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Indexing, Benchmarking, and the Problems Therein

We are often asked about our performance relative to an appropriate “benchmark”. For this reason, we often cite our over/under-performance relative to the S&P 500 (the most widely used benchmark, despite significant drawbacks). But please note, we are indifferent to any benchmark, and by no means manage our portfolio with the S&P 500 in...

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