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Palantir

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Posts posted by Palantir

    Drunken Thought

    in General Discussion

    Posted

    at some point there has to be some value added? Isnt that what corporations should do?'

     

    Investing is a zero sum game. Its not a socially useful activity (with the exception of VC and IPOs). We are parasites. Its quite possible to make a lot of money investing without adding any value.

     

    I would say that if Buffet had never existed, the world would be more or less the same.

     

    Not true, there is an expected return > 0 for market participants, meaning it is not zero sum. Alpha is zero sum.

    What is the extent of the 'opportunity' in the oil market?

    in General Discussion

    Posted

     

     

    is it not also the case that countries like Russia, Saudi, Iran etc will have to produce no matter what the price. A canadian or US producer reduces production if the price start falling and remains low

     

     

    Not if that US or canadian producer has a ton of debt obligations he/she needs to meet!

     

     

    The hypothetical US or Canadian producer with a ton of debt has a finite amount of time in which they can produce at a loss, as does Russia, SA, etc. But, the US/CDN producer has a much greater finite amount of time.

     

     

    -Crip

     

    Not necessarily, the US/CDN producer has creditors who can declare it in violation of debt covenants anytime. Russia has gunz.

    Understanding high cash flow, "low earnings" accounting (ie KMI)

    in General Discussion

    Posted

    I think you're forgetting that the company is also subtracting maintenance capex, and even opex which is an offset to depreciation. Now what could be a legit concern is understating maintenance capex... For earnings, you have to keep in mind that different cos recognize revenues at different times, so the underlying economic performance may not be reflected in I/S. Eg. for service firms, you want to look at cash flow.

     

    TL:DR : each industry has a unique way of interpreting financials. For MLPs like KMI, you should focus on EBITDA, DCF, and Debt/EBITDA. What is happening with them is that their cost of capital is rising to 9%, and their leverage (D/EBITDA) is elevated, which hurts their ability to finance projects, damaging growth expectations.

    Is an MBA worth it?

    in General Discussion

    Posted

    MBA is the best way of getting into investment management especially if you're not in the industry. Of course, I am only referring to top tier MBAs.....:)

     

    Just go online, and look at the profiles of the people who are working in the jobs you want to work in. What do they look like?

    1.2x P/BV entry point

    in Berkshire Hathaway

    Posted

    Have members ruled out that BV might decline? I mean BRK is so leveraged and heavily into cyclical, industrial stocks which are getting pounded this year. Eg, NSC is down -30% YTD, and if we assume a similar valuation decline for BNSF, and multiply by 2x for leverage, the "true" BV might be lower than anticipated?

     

     

    BNSF has a book value to Berkshire of $34B. Using a simplistic analysis of the decrease in market value of BNSF (simply saying the "right" multiple has gone from 20X to 14X), then BNSF went from being worth $90B to $56B, from 2.3X GAAP book to 1.6X GAAP Book.

     

    It would be incorrect to say NSC is down 30%, Berkshire has 44% equity/ assets, ergo Berkshire's interest in BNSF is worth 60% less.

     

    BNSF is simply "worth" a less giant premium to book than before. That premium moves up in down in an unlevered fashion because Berkshire's equity stakes in BNSF and BE are not themselves levered like that.

     

    Interesting, thanks.

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