Horizon Kinetics February 2013 Market Commentary

This month we continue our series on Predictive Attributes by discussing companies that fall under the rubric of “Bits & Pieces.” Bits & Pieces, which we actually research on a formal basis and for which we publish a monthly review, refers to the ownership by a publicly-traded company of stakes in other public companies or marketable securities. As the three examples below illustrate, it is occasionally possible to identify cases where, if one subtracts the market value of the investment stakes (even when they are publicly-traded and therefore readily verifiable), the market appears to attribute little or no value to the remaining operating businesses. Such circumstances are akin to acquiring the core business or assets of a company for free.