Palantir

1) Invest in Coke and hookers 2) Lending Club 3) Apartment

SWY

What are the best ways to play this major trend? We can buy gas producers with the lowest cost, like XCO and UPL. We can also buy oil producers with a lot of gas in production, like SD. What other options do we have? Pipeline construction companies? Auto companies that will launch nat gas trucks? Thanks! WEB plays the oil boom via rail shipments. I recall reading many years ago that the people who got rich during the gold rush were those selling shovels....we need to find our "shovel" ;D cheers Zorro Either find shovels, or find existing undervalued gold mines. But never buy junior companies that has nothing except a promise to find gold mines. I think the pipeline companies could be interesting. Also LNG exporters. This is a "shovels" idea - HCLP. I have not done much DD on it myself though, just putting it out there.

You may choose to ignore market risk because of your "very long time horizon", but that doesn't mean the particular property does not exist.

There aren't many people who don't like upside volatility. Not true. Take an asset that has only upside volatility, and compare it to an asset with equal expected return and no deviation in return (essentially a risk free asset with same E® ). You would prefer the volatile asset? I would not. On the other hand, if by upside volatility you mean volatility above the mean, then the asset would have a higher E®...above the RF asset... Upside volatility is not separable from Risk, and not a meaningful concept, if I understand you correctly, you're looking at the positive side of the distribution and saying "This part is good", but the "good" side also comes with a "bad" side that WILL balance it out to equal E®. You have a dispersion of outcomes, and to an asset holder, given the same expected return, you want the asset with a smaller dispersion...

I'm pretty sure risk IS volatility. What other concept of risk is there? We had this discussion a few weeks ago, but even measures like shortfall risk etc use volatility as an input. As one poster stated on that thread, risk can be seen as the asset's true standard deviation....but that's obviously unknown. What Birdman is referring to is a totally different type of risk. Operational risk is important, but it is not the same as the market risk of an investment.

I wrote a letter to Buffett in April recommending that he purchase a company I suggested. He has not written me back, nor has he invested in the firm. Lame

It is useful for looking into MF's for asset allocation data, expense ratios, but that may be available free as well or on google. What's good with morningstar is their screener. If your company is heavy on using MF's, it might be worth it, and it is not too expensive. For private use, I don't think it is as useful.

Before any serious responses come in. She used to be a house cleaner: http://ucesy-sk.happyhair.sk/celebrity_img/alves1m2310.jpg Hire someone like her....

Ethics is my worst section...then again, maybe that says something about me.... ;D How'd all you mofos do? Level 3 was okay.......AM was ok, PM was tough dude...

For me....discount rate is "hurdle rate". I want to make greater than 10% on my investments, so I use a 10% or greater discount rate. I also calculate it using higher discount rates, like 11-15%. If the 15% discounted value is less than Market Value, obviously it is a better value than something that is only undervalued at lower discount rates. I project cash flows for like 40 years and put a terminal value on it. My method is very simple, because I don't know more sophisticated methods of valuation. I start with an FCFF, and project growth at a conservative rate. So if Google is growing at 15% annually, I model it at growing at 7% annually declining to like 4% into perpetuity. (And it still came out undervalued! LMAO) I find that my valuation method is useful for my personal investments, but it is not sophisticated enough to impress professional fund managers in job interviews. :-[

Richard Sherman did graduate from Stanford, and seems like a smart guy. I get the impression that value investors are only happy when others are sad...and sad when others are happy...Market may keep going up for years..... Maybe we can get him to come on here....:)

^What's in your wallet?

I think opportunities like KO (Maybe not AS big) but great companies at very cheap prices do happen from time to time. (Cough GOOG last summer mid 500s). There are not many of them, but IMO you need to go as Paula Broadwell said, "All In".

After you account for his epic capital gains taxes? Then invest that cash into a sector he knows little about? Personally, I believe in the long term buy and hold to an extent few value investors do. I don't follow quarterly earnings, don't bother listening to conference calls, frankly after I buy stock in a company I pretty much stop following it because I believe in it and want to hold it for years, so I don't really care what the next earnings report says. Mostly because I am too lazy to do more work than I need to ;D. Let's see how it goes.

^Increasing "money supply" is only increasing one component of the money supply, there are others that will not necessarily double. We need credit growth and growth in velocity before we can see asset price inflation...

You're right, perhaps FCFE is the wrong way to look at this. If we take the basic OCF calculation, and ignore the effects of working capital management and subtract CapX, we should get about 2B in *modified proxy for* FCFE right? m-FCFE = 2B Growth multiple = 10+5(10% growth/2) Debt = 2B we get (2*15)-2= 28B, this should give us a 10% return, estimated conservatively. Since the volatility in OCF is due to WorkingCap management, do you think it's theoretically sound to ignore the movements in WC to estimate owner earnings?

What growth do you expect from their future EPS? That is the key. When Buffet acquired the Northern SanaFe, It was some PE like 11, which is not very cheap, but look at the EPS growth since then... If NOV grows the EPS by 20% for the next few years, this will be a huge win. If the EPS is flat, you won't lose money by buying at 11 PE. Of course if the EPS drops, you will lose money. That's a fair statement, what's your growth estimate? I personally prefer to use FCFE rather than Net income, and from that angle, the earnings multiple doesn't come out nearly as generous.

I want to know this too...I would probably short Treasury ETFs rather than TBT though. Shorting T's would give you a really low cost of capital....and even a low, stable investment could be levered up...

^Yeah but those measures are all based on the use of standard deviation as a measure of risk. Sharpe ratio, beta, semideviation, shortfall risk etc etc. Now in some cases they use nonnormal distributions as a measure, but it's still underpinned by a form of return volatility.

What other notion of market risk is there? It's pretty standard that risk is defined as a dispersion of returns.

http://gameaxis.com/wp-content/uploads/2009/11/lolwut.jpg

Why don't you start a public mutual fund...? There may be a lot of interest.

Congrats sir. How are you planning on marketing and increasing the visibility to investors going forward?

Yeah I agree, he shares characteristics with the legendary entrepreneurs like Akiyo Morita, Henry Ford, or Steve Jobs. He clearly has an eye for good design, and the product looks fantastic. Whether this will be like Apple I suppose depends on the margins.... Any of many talented value investors here buying these cars? :)