Ann: Appointment of Chief Financial Officer, page-31

There are too many threads on the same subject so you may not have seen my post on the other thread.

It is foolish to dismiss Whale’s post and insult him. He represents the sentiment of the sellers on Tuesday. It is important to understand that sentiment and calmly and objectively decide if you have data that allows you to disagree with that sentiment.

Successful investing is about disagreeing with consensus and being right! Agreeing with consensus doesn’t make above average returns. Disagreeing with consensus and being wrong loses money.

There is no such thing as “The Market” . When you are buying
a stock, you are buying that stock from a willing seller. When you are selling a stock, you are selling it to a willing buyer. You are disagreeing with someone. It is as important to understand the motive of the person on the other side of the trade as it is to understand your own motive.

Listen carefully to the sentiment that moves a stock and decide if you have data that allows you to disagree with that sentiment.

Whale represents the sentiment of sellers on Tuesday. I want to hear his point of view respectfully because it is an insight into the mood of the sellers....and he has cause for concern.

Then I look for data.

I might discover that Matt is in Europe conducting business on behalf of LVT and meeting with the management of the recent acquisition and JV partners. This would provide a data point that confirms the company statement that Matt has not left LVT.

I might discover that LVT has been conducting a search for a senior financial person for at least a month, that the criteria of the search based on people approached was for someone with accounting and reporting systems experience, preferably in a public company. I might discover clues that Matt was driving the search.

I can clearly observe from the resume of Matt that his experience was legal and investment banking and that he did not have accounting qualifications and financial reporting experience. I can observe that the new CFO does have this experience.

I can use my experience to know that when companies transition from $5 million of annualized revenues and one product to $35 million of revenues , to $100 million of revenues across several products and three continents.....that the reporting requirements to run that business grow exponentially.

I can speculate that when Matt found as highly qualified a candidate as he did, that in order to land the candidate, the title of CFO was warranted. I can observe that LVT has done 2 bolt on acquisitions and at least 3 product joint ventures in the 12 months....and that appraising these opportunities and conducting the necessary due diligence prior to acquisition , and formulating integration strategy post deal requires dedicated leadership and analysis. That Matt is eminently qualified for and relishes that role. Our investment thesis is that the business model of providing the customer with its enterprise intranet portal puts LVT in an extraordinary position to add bolt on enterprise software products to the customer suite. We can thus expect more product deals not less.


I can feel out with Citi and Blue Ocean as a potential buyer if any management stock is available in size and get no bites.

I can re-read the company announcement carefully and decide if the facts fit.

Individually each data point is not enough but together, the trail of crumbs paints a picture.

It is is enough for us to take a different view from the prevailing sentiment that Whale so articulately represented.