4 Comments
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Diversified Chaos Investing's avatar

Good for you on the audit. This was really interesting. I imagine you deserve to include those dividends as that is real return. Maybe I misread that part. Great work. Keep up the quality.

FRAGMENTS's avatar

Thank you. You read it correctly: dividends were excluded from this first version, so the figures are price returns only.

I agree that total return is the better measure, especially for the REITs and other income-producing companies. I am adding dividends in the next update, along with the benchmark comparisons.

I appreciate you pointing it out. :)

Brad's avatar

Really appreciate this kind of analysis. I bought MERC after reading your report. Small position, but obv has been a disaster. I’m OK with mistakes but only if someone comes clean. Thank you

FRAGMENTS's avatar

Thank you, Brad. And you are right to say it plainly: MERC has been a disaster so far.

I am sorry you ended up on the wrong side of it after reading my work. I do not want to hide behind the cycle, the balance sheet or another explanation. The report was mine, and the loss belongs in the record.

I have not written Mercer off, though. Peter Kellogg now owns close to 38% of the company and bought another one million shares in May. That does not make the original thesis right, and it does not undo the damage, but it is one reason I still believe there may be more to this situation.

I wrote a separate special-case article on exactly that setup here: https://cundilldeepvalue.substack.com/p/what-if-peter-kelloggs-mercer-problem

I will keep following it, and I will keep updating the thesis when the facts change. Thank you for holding me to that standard.