plato1976
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Posts posted by plato1976
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PWE,LTS, etc. etc.
For all these mentioned here, which one is the lowest cost producer?
This sector was killed the last month...
Oil is on a pretty tight cycle. The realized price goes down and the more expensive drilling slows.
So, as mentioned above things like the oil sands, and offshore deep wells slow down. Once this happens the price starts to go back up. Natural gas is steady. The operators in Western Canada can switch nearly at will.
I dont think Pennwest's dividend is at risk. They had more than 4 times coverage out of funds flow. Management had the opportunity to slash it during the recent accounting thingee and didn't.
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pardon me, just begin to look into F&F
A naive question, if the gov wins these lawsuits, will these pref go to zero? or there will still be a floor price and floor value left?
I think it was implemented partially for political reasons, as you say to screw "hedge funds and wall street", you know, those people who destroyed our economy. But I also think it was to help pay the bills in Washington which has some serious budget issues.
I think everyone has an incentive to keep F+F alive, so I don't think they will be killed. But in terms of the Government's incentive, they'd much rather own 100% (which they do now) vs. 79.9% minus whatever goes to junior prefs (if they lose the case). And hence they'd end up in a worse position if they lose, and that's why it's taking so long.
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Very interesting insight!
Which alternatives mania are we talking about?
btw: I think Fairholme got its alpha mainly from large cap if I remember it correctly
but I agree they got it in a concentrated fashion
Charles Ellis has written a great history of active performance management and has observed that smart managers have arbitraged away most of the excess return of the largest 300 US stocks. I for the most part agree. What we may see after the alternatives mania is a movement to index funds for most institutional money combined with opportunistic managers that provide concentrated exposure to mispriced securities. Fairholme is the only manager that provides this type of offering today.
Packer
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which russian stock is trading at 10% dividend yield ?
I've been thinking about Russia's chronic P/E problem and have begun to wonder if it really matters as long as the stocks maintain high dividends.
You have the opportunity to buy a stock that trades at 100 and pays a dividend of 10. Assuming no growth we can consider two scenarios over a 15 year holding period.
1) the stock doubles and dividend proceeds are reinvested
2) the stock remains at the same price and proceeds are reinvested.
Does it surprise you that investors actually stand to make more in scenario two? I guess my point is that the ability to reinvest at chronically depressed prices is a boon for investors over the long term. Obviously you could make the argument that once it doubles you could sell and invest in something else that subsequently doubles, but there's no guarantee those opportunities will be around or revalue quickly.
I don't think chronic discounts are a bad thing. Rather, you can invest in them and reinvest the dividends in the chronically undervalued security when you have difficulty finding better opportunities and then reinvest the dividends in other companies once you think you've found a quality double. These are simply a vehicle that allow you to compound the free cash flow coming into your portfolio each quarter rather than compounding capital gains. You wouldn't ever need to hold much cash if you knew you could reliably have a portfolio that would yield 10% in cash each year.
Am I wrong to think this way? It almost seems like the same reason Gio likes Lancashire. It replenishes his cash.
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I searched around and didn't find one
appreciate if anyone can post one
I don't feel this is really cheap - it's actually at the higher side of valuation against its peers but maybe it's worth the premium
Is there a write-up available somewhere about Nestle? There is one on VIC but it's 5 years old.
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I think ADR dividend can be qualified dividend - so it's more like 15%
If they withhold your div tax I think you can claim it back if it's in a taxable account
Not sure how though
Nestle is a great company I've never bought any though because I thought the withholding tax was 35% and you cannot claim the tax within an IRA. I just looked back and a SA article I read said the tax rate was 15 or 35%. Which is it for US investors?
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I have some difficulty to understand why ppl call Nestle stock as cheap now
I think Nestle is such a wonderful business that I just own the equity and collect the dividend while waiting for the upside. Call options are predicated on the business reaching a certain price at a certain time. That may not happen as easily as Winter's expects . The emerging markets may not provide the upside immediately given currency issues and slowing EMs
As Buffett says " “Time is the friend of the wonderful business, the enemy of the mediocre.”. I am happy owning Nestle for a really long time
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semiconductor 's PE is ok
Intel, qualcomm, ...
I think if you look carefully, you may be surprised by how many public companies these days are unprofitable compared to past periods (other than the dot-com bubble). Pre 1990s it was rare to IPO unprofitable or heavily indebted companies - now it is normal.
My sense is that the action in penny stock pump and dumps is up a huge amount in the last year.
Many growth darlings are also performing worse rather than better the past year or two - look at AMZN, CRM, etc. A few years ago they were growing income/free cash flow - now in order to grow, they need to lose money.
My opinion is that it's hard to compare today's market to pre 90's as there were no software companies back then. If I look at today's market, the cloud/mobile/big data companies are overvalued as they have to execute perfectly to deserve their current valuations. However, if you look at traditional brick and mortar businesses, I don't see overvaluation.
I'm not just talking about social media and cloud/mobile/big data. There are many areas of the market with very high multiples: biotech, green energy, healthcare IT, internet retail, semiconductors, 3d printing, etc.
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I won't feel comfortable to declare 'retirement' until I can rely on the dividend from stocks like PEP to have a decent life. That probably means I need 3M ......
Some things that have me worried about retirement are healthcare inflation and education inflation. Unless something changes, I expect these to be much more expensive in the future and they can be more important to me as I age and if I have kids (especially more than 1). I think that a few people I work with are working just to put their kids through private colleges that can run you a total of 200k+ per kid!
I'm not sure what "my retirement number" is. I hope I can find a job I like that pays well and gives me enough time to read about investments.
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yes, not a big issue to me, sounds like
btw: $6000 SSI seems good
Is the income from like a pension or social security? If so, you guys only need to generate like $1500 a month then, right?
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what's the next cheapest country one year ago ?
I think one of those EUR countries that were in trouble ? Spain ?
Those of you thinking about buying Russian ETF, read Ben Inker's (GMO) thoughts on lagged value. Buying countries that were the cheapest one year ago beats buying countries that are the cheapest today. Value+Momentum > Value. See Page 11.
http://www.gmo.com/websitecontent/GMO_QtlyLetter_ALL_4Q2013.pdf
Russia was the cheapest market a year ago too.
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I am not sure if you can call qcom as cheap
I never truly understood when qcom 's patent cliff would come, and royalty is responsible for 2/3 of its earning... So it's hard to assign a PE to its current earning.
I find the below notable:
Imagine if equity markets fell by 50-70% and Fairfax has billions in cash when it happens. the whole global QE, the moral hazard of bailouts, unprecedented amounts of debt, and the interconnectedness of the global financial system make me uneasy.
ok. but this tends to happen every 30 or 40 years. And it just happened 5 years ago. So is that a wise bet? I see a two tiered market. I see massive overvaluation in a growing number of "hope and change" type companies. And I see reasonable valuation in many good companies like msft, apple, qcom, aig, lots of small financials, etc.
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I find this argument very convincing:
"he isn't going to touch small cap Russian companies...just too small. "
I have decided to invest in Russia. I know little about the country, little about the politics and I believe the country is very corrupt. But at a 4 p/e I think it doesn't matter. I am considering two investments: Market Vectors® Russia Small-Cap ETF and Gazprom. Gazprom sells at like a 2 p/e and its State owned and its basically a piggy bank for the corrupt Russian government.
Putin will probably take my cookies from Gazprom but at a 2 p/e how many cookies is going to get? And he isn't going to touch small cap Russian companies...just too small. To me this is a no-brainer by which I mean you need little research or understanding to make these investments. The low valuation is so important it overwhelms everything else.
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10% cash on cash before any cost ?
If I buy a piece of farmland and rent it out for 10% cash on cash and then sell it 28 years later for 5x my investment, it will have returned 16.6% with zero reinvestment.
It is entirely reasonable if purchases at opportune times. I could have purchased farmland close to where I live for 7-8% yield a few years back, but not today though. It also depends if you take straight rent or sign a crop sharing agreement. Typically you can earn an extra point or two return by signing a crop share agreement.
All Buffett did was look at normal earnings when the market was depressed. He bought the farm from the FDIC, or basically at the point of maximum pessimism. Same goes for the piece of real estate he bought near NYU. Neither were earning 10% on the asset immediately.
"Focus on the future productivity of the asset you are considering. If you don’t feel comfortable making a rough estimate of the asset’s future earnings, just forget it and move on. No one has the ability to evaluate every investment possibility. But omniscience isn’t necessary; you only need to understand the actions you undertake."
I would guess that reinvestment over and above d&a would have been needed in order to obtain current productivity levels. Were Deere tractors nearly as technologically advanced then as they are now? Did a technologically inferior Deere tractor cost as much then as it does now in inflation adjusted terms?
In order to receive the full 10% yield plus the 6.6% growth, that means the 6.6% is pure 100% pricing power over and above cost inflation - zero reinvestment-based growth. That means farming has one of the strongest pricing power profiles I've ever heard of.
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Not sure how matters it is
small value probably outperformed SP500 in the past 13 years
but from 1925 there are many periods small value underperformed
I am not sure in overall how much small value outperformed SP500 in the past 100 years
And there is counter-argument that if you change to equal weight instead of cap weight for stocks in SP500, you dramatically reduce your underperformance against small value (equal weight doesn't help small value as much)
I feel either way (using small value, or use SP500) doesn't make a big difference
unless we use PackerIndex then most of us will feel pretty bad :)
As a result of the Martin Asset Management thread, I was thinking of appropriate value investor benchmarks. I think for most small (less than $10 million to invest) investors the small cap value index fund is the best because you can buy it as an alternative to active management and only pay 8bps. What to do you think and what benchmarks do you use?
Packer
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Don't exactly understand what's MTGOX 's "technical" issue :)
But it's taking them a long time to fix ...
I don't know how much more secure it is, but I've only used Coinbase to get USD into BTC. At the very least, they're located in the US and venture funded, so perhaps there could be a class action lawsuit in case something happens.
At the same time, I have almost nothing in BTC. I've taken that BTC and split it up equally among any alts on the exchanges and am in buy and hold mode. I just hold the coins directly on the exchanges since otherwise, I'd have to setup more than 300 wallets. My risk is therefore in the altcoin exchanges.
However, just to show that the markets aren't as bad as you think, I held about half a BTC's worth of LTCs, and another 0.5 BTC that had already been invested in coins on one exchange. The exchange was hacked and they closed. However, they funded everyone's LTC orders at 85%, so a loss of 15% there. For the remaining coins, I was able to transfer their full amount to other exchanges. I had a group of coins that weren't currently on an exchange and I didn't want to setup wallets for them. I was able to sell the coins at a profit by using the online forums.
I have no idea if my strategy is good or not, but at least it's a strategy :P
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A quick question is if their property are really valued at current market price, or valued at the acquisition price many years ago (maybe in some cases ?)
Not familiar with the accounting and the situation there, so just wonder...
HK property companies are cheap as their property assets are valued at current (inflated) market prices. Factor in the probability of a correction and they're not as cheap as they appear.
Research In Motion/BlackBerry
I'm also trying to generate more cash to put to the side in case a buying opportunity arises. My average cost on BB right now is $11.
Haven't found anything else outside of EXOR and Henderson Land Development companies (which I think people should look closer at, especially Henderson).
I am just starting to look at Henderson Land, this HK company is ridiculous cheap. P/BV = 0.5x. Book value has grown around 10-20% EVERY year for the last decade..... does anyone own this baby?
I am still in the process of due diligence which involves just glossing over their 10K (or the ADR equivalent)
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What if we are on the road ? wifi coverage won't reach there, right ? So without using a tower nearby, we just rely on satellite ?
thanks txlaw for your insight on this -
i have a simplistic view on this as well - perhaps overly simplistic.
i think over the next few years we are likely going to just have wireless providers and content providers for the general consumer & wireline will just be for enterprise....
wireless coverage & capacity seems to have a lot to do with installing cell towers & their back haul connections; and there is a cost associated with that.
if i already have a certain market share in an industry.... and so are my competitors, would i want to spend a whole bunch of money so i can gain a bit of market share, but at the risk of losing my pricing power?
i agree the absolute capacity is infinite - just like the airline industry there's a lot of space in the sky for planes, and all the players in the industry could just get more planes - but that's clearly not happening, and more and more people do want to travel.
agreed on owners earnings vs us gaap - i was a bit surprised when i hear that...
Gary
PS. Look at alaska airlines, delta, etc - they've done really well the last 5 yrs
Wireless coverage is really about more than just cellular towers. When you boil it down to its essence, it's about getting access to the communications networks in the easiest possible way, and that does not necessarily have to be done through the infrastructure and RE that the traditional wireless carriers control (i.e, their spectrum positions and cell tower networks).
If I am a consumer, I don't care about what technology I use to connect to the Internet. What I care about is ubiquitous connectivity, high throughput, low latency, and mobility. The reason I go with the traditional wireless providers is because they offer me a last mile connection that I can utilize pretty much anywhere with devices that I can carry around with me. At this time, VZ and T are the big dogs of this space. In fact, they're really the only game in town -- as of now. That's why there is pricing power -- not because of capacity issues. In this type of situation, when new entrants come in that have a viable alternative to what you're selling, you have the double whammy of losing market share and price competition finally taking hold. And that hopefully (for the consumer) means reduced ARPUs/ARPAs -- or at the very least, more value for each dollar spent. Why would new entrants come in? Because there is finally economic opportunity in this space for these new entrants. The wait and see approach generally works when technology brings costs down and the market for your proposed services solidify, as John Malone has proved over the years.
Someone already mentioned "carrier wifi." Why are these big wireless providers working on carrier wifi? Because they know that all consumers care about is having ubiquitous connectivity. AT&T's goal is to give you a very high speed connection from anywhere and convince you to subscribe to their services on a monthly basis. But what happens if the MSOs (cable cos) start blanketing cities with their own wifi access points and partnering with wholesale wireless providers (or white space providers) to fill in the gaps? All of a sudden, you have viable alternatives to AT&T and VZ. I can turn to TWC, for example, for all my connectivity needs instead of AT&T. What if big tech decides they will try to subsidize connectivity for customers who use their services by purchasing capacity from the wifi providers, sat cos, wholesale wireless providers, or whomever? What if content providers who also control communications infrastructure can subsidize their high margin content bundles by providing low cost Internet access? And if we get a metered world, then you start to see things changing even more. Consumers will be able to hop on and off people's networks in a much easier fashion. Again, IMO, it's not really about the spectrum positions and cell tower networks over the long run. It's about being a low cost provider of connectivity and about customer relationships.
The telecom and media industry contains some of the best businessmen in the planet. IMO, for the vast majority of investors, they're better off putting their money with the John Malones, Brian Roberts, Barry Dillers, and Charlie Ergens of this world, rather than trying to do it themselves. Even WEB played this space by partnering with Tom Murphy.
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Why QCOM ? Don't think their patent dominance can continue - they are already not dominant in 4G patents
It is interesting John has this thesis that the telcos will get good pricing power moving forward - I am wondering if anyone else on this board has thought about this?
His argument is that due to the engineering limitations, it won't be possible to have an infinite number of cell towers to supply the demand for boradband wireless data in the next decade.... and as a result... telcos will have the ability to raise their prices.
i quickly checked my cell phone bills - seems like there is some truth to that. i am wondering if others agree with this observation. Are there any experts in telcos here (Packer? and others... ? ) that could weight in on this? Thanks Gary
I think he's on to something.
With more things utilizing broadband data (cars, phones, laptops, tablets, appliances) the demand should only rise. Another angle might be to buy QCOM.
Even my cable internet had pricing power on me- comcast, time warner aren't losing pricing power considering regional monopolies
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valid concern in my opinion;
interesting to watch how this evolves
http://blockchain.info/nl/charts/n-transactions
This still worries me. It exploded in the media, and nobody really uses it. Everyone is hoarding.
http://blockchain.info/nl/charts/n-transactions-excluding-popular
Even this one doesn't look good. It went from pretty much unknown to mainstream. Your suposed to see a big rise here, but it did slightly better then double really. If we dont see a large rise here in 2014, then i predict the price will crash. Or maybe it sustains for 1-2 more years, untill people start to figure out that it really is still a niche product.
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wachtwoord,
why cannot a big player like visa/mastercard or amazon issue their own crypocurrency ?
with their channel it will be much easier for them to pump up such a crypocurrency
Sure they need to make that crypocurrency transparent and distributed just like bitcoin;
the only benefit for them is that they can own a big chunk of such currency as the founder
And if such a currency can be a major currency down the road - that chuck will be worth a lot for them
I see this as a real threat to bitcoin b/c it's much easier for those ones to pump up another currency
- to pump up bitcoin gives them zero benefit
I just don't see Bitcoin pulling another 100x, but hopefully this is a tide that raises all ships sort of thing.
You don't see Bitcoin go up a 100x from here so you prefer the casino?
I'd say investing in Bitcoin is a (very) profitable decision EV-wise while investing in a basket of altcoins is negative EV. I'm not saying it's impossible, but neither is 31 black ;)
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That's nice
But I suppose you can not put an online order and have to call them to put an order ?
Fidelity has access to the Korean market including the preferreds. They don't show it on their site but I called and confirmed with them.
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Guys, what's our latest estimation of FFH 's book value now (after the $10 div) ?
The last hard market was more than 10 years ago
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no offense here, but I don't think Tim's long term record is good enough
I really don't mind if the past 3 is good
But really his track record in overall didn't convince me he is a star fund manager
btw: I do enjoy his letters and some interview
Sanjeev,
Tim McElvaine is an outstanding investor...He too will have his day again.
Dazel.
Canadian oil patch for sale!
in General Discussion
Posted
Why canadian oil companies are selling cheaper than U.S. peers?