@VIC: Lisa Rapuano of Lane Five: Overstock's a Buy

Fund manager Amit Chokshki attended this week's 3rd Annual New York Value Investing Congress on behalf of Seeking Alpha. Here are Amit's notes from the presentation of Lisa Rapuano, Lane Five Capital:

• Market is a complex adaptive system and margin of safety is over-used:
  • Focus on portfolio composition as opposed to individual/absolute ideas.
  • Over emphasis on margin of safety and conservatism can lead to loss aversion mistakenly characterized as risk aversion.
• Lisa and you are not Warren Buffett.
• Moats are over-emphasized.
• Value of growth is under-appreciated.
• Investors should use a probabilistic framework to derive value.
• Use real scenarios, not conservative; understand non-linearity of outcomes.
• Renault SA – long idea
  • Carlos Ghosn is executing a turnaround
  • Street questions the targets set by Ghosn by Lane Five’s analysis demonstrates that Ghosn can achieve those targets
• Overstock (OSTK) – long idea
  • Returning COO is focused on bringing company to profitability without needing much revenue growth.
  • As OSTK’s internal operations improve, the key value driver will then be the ability to grow revenues and prove OSTK’s viability to customers.
  • Lane Five classifies this as a high risk/high reward opportunity but it fits within their portfolio context.