constructive
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Posts posted by constructive
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It's a momentum strategy masquerading as a dividend growth strategy. The data set is small in length of time and especially in number of stocks held. They don't provide a credible explanation for why it should work.
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King Digital (KING) - I understand why people would spend on entertaining mobile games, but these particular games seem to be terrible.
National Beverage Co (FIZZ) - It's a $2B drink company and I can't remember ever seeing one of their products in a store. Also, they have higher returns on equity than KO, PEP or DPS. I thought KO was supposed to have a huge scale/distribution advantage over smaller competitors?
I don't suspect either of these are cooking the books. If I don't understand something, the problem is probably as likely to be me as it is the company.
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I can't seem to find anything on Fido, is there anywhere I can find more information on this? I did a search and didn't find anything useful, not sure what you mean by IB thread, I feel like I'm missing something lol
Fido = Fidelity
IB threads = http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/brokerage-recommendation/
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KMI splits out maintenance vs growth capex which is definitely useful.
In 2014 they had depreciation of $2B vs maintenance capex of $500M. For this level of capex to be sustainable, that would imply the useful life of their PP&E is 4x as long as it is accounted for - on average 80 years instead of 20 years. Seems unrealistic.
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I find the massive employee turnover at the top management consultancies and investment banks confusing. Instead of looking for top students who want to get a name on their CV and then move on to the next job, wouldn't it make more sense to find people who really want to work in that field and help them build a long term career, reducing the costs of retraining all new staff every two years?
I talked to a careers advisor in my MBA program yesterday and she suggested that I would be a strong candidate in consulting, even though I have no interest in it and want to work in asset management.
We also had an equity research firm give a recruitment presentation, in which they admitted that working 60 hours a week in equity research was not anyone's goal. Their pitch was that working there for 3 years would prepare us for a better job somewhere else.
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Given that there is no data supplied to back up this assertion, I'm calling BS.
Also to the VIC author's point, look at the charts for PPC, TSN and SAFM. He says you can take advantage of intense negative cycles in their stock prices every 3 years. That's false on its face, the cycles as reflected in stock prices have been fairly subtle and unpredictable, even in retrospect.
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I would argue any investment other than buying an index fund is a variant perception. That tells you nothing about whether it varies in the correct direction or the incorrect direction.
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In my opinion, you don't need deflation protection. You may need protection against the value of your equity assets declining, but deflation is just one possible mechanism for that - and not a particularly promising one.
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The funny thing is, after his remarks, apparently he has pretty decent approval from the latino's. Which kind of surprises me. Latino vote usually decides the elections right?
Not really. Latino votes are concentrated in non-swing states like Texas, California, Arizona, Illinois, New York, etc. Florida is an exception, but Cubans and Puerto Ricans don't necessarily identify with Mexican-American issues.
Trump may poll well with hard-core Republican Hispanic voters, but there are not that many of them and I am very doubtful he will do well with moderate Hispanic voters.
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Trump's unfavorables are high and his head to head polling is weak against pretty much anyone. To win the nomination he needs the Republican field to stay wide open. If Bush or Walker gains a lot of momentum and candidates start dropping out, they can pick up moderates and second choice voters and beat him fairly easily.
Head to head versus a competent Democratic campaign he has very little chance. He may attract more entrants to the Democratic primary, because a lot more Democrats can beat Trump compared to Bush.
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I think Washington would be very impressed with both the US and Europe, notwithstanding their many flaws. We have achieved peace and security that few people could have dreamed of in the 18th century when warfare was still very present in the average person's life. The same goes for democracy, human rights, the systematic rule of law, territorial stability, the free flow of people, ideas and goods, growth of the middle class, relative economic stability, etc.
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I understand the impulse to be skeptical, but comparing Holmes to Batista is just random and uncalled for IMO. Might as well compare Elon Musk to Batista while we're at it...
Yes, I would absolutely make that comparison.
In a raging bull market, companies are valued on blue sky potential. In a bear market they are valued on short term earnings and assets. Given that Tesla is consuming tons of cash, they are very dependent on the capital markets remaining favorable.
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She is impressive but I am very skeptical of the valuation.
Remember when Eike Batista was worth $35B? It turned out the market was wrong and he was worth $0.
The economics of Theranos' business don't sound promising at all. I suspect it will be lower margin and more capital intensive than investors are hoping.
I see no reason to compare her to Eike Batista at this point. He was highly leveraged, operating in a fairly corrupt and bureaucratic country, in a cyclical, commodity industry, while being extremely promotional to push his public companies to ever higher valuations. She's been in stealth mode for 10 years working on technology and runs a private business that has only been valued by extremely savvy investors like Larry Ellison, and as far as I know they have no debt.
If anyone smells a bit like Batista at this point it's Drahi, in my opinion...
Batista had a lot of debt but his companies also had a lot more assets than Theranos (I'm guessing).
Also you don't get a $10B private valuation on minimal revenue without extremely serious salesmanship. There is nothing wrong with being a salesman / promotional if you can back it up. I hope the company can create $10B in value to justify its valuation.
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She is impressive but I am very skeptical of the valuation.
Remember when Eike Batista was worth $35B? It turned out the market was wrong and he was worth $0.
The economics of Theranos' business don't sound promising at all. I suspect it will be lower margin and more capital intensive than investors are hoping.
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Horizon Kinetics has a strong performance record in this area.
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I'm just curious, why do you want to get an MBA to get into real estate investment/development? From what you've posted here it seems like you've got architecture/construction experience? Is there some reason you feel you need an MBA as opposed to starting a RE investment company and building it up?
I completely understand you'd want to get an MBA regardless. Also, congratulations on getting into Oxford!
Thanks!
My primary interest is asset management - I would really like working at any kind of equity or real estate fund. Real estate development is more of a backup plan. I could probably get into development without getting an MBA, however the jobs I could get now would be lower level, would be more operational instead of financial, and pay considerably less than MBA level positions.
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Great news - I was just accepted to Oxford's MBA program. Very exciting, although still not an easy decision because it is expensive and a huge life change. I'm currently an architect and I want to transition to a career in asset management or real estate investment/development.
Any Oxonians on here? Any words of advice?
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The report feels pretty thin. Some of the content there might be useful politically in pushing for a resolution, but I doubt a court is going to hear much of this - there's a reason most of the litigation surrounds the third amendment and not the initial conservatorship. It's just very hard to credibly argue that Fannie/Freddie did not desperately need help in 2008; this report chooses to ignore completely the financing needs of the GSEs, and yes if we assume that the market would have continued to roll over hundreds of billions per quarter of debt at each GSE through 4Q08 and 1Q09, they were probably fine. But I don't think that was a realistic assumption at the time and I doubt a court is going to second guess the decisions based on those assumptions without very very strong evidence they were not taken in good faith.
I agree. The authors are naively ignoring that Fannie and Freddie were dependent on rolling over short term low interest rate paper. If they had not received government financing, they would have not have been able to afford the market rate cost of capital and would have encountered liquidity crisis and bankruptcy very shortly.
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It just depends on how much you're willing to spend on accounting and audit. If you run an investment fund for free for a couple of years that will chew up money, even if you don't want to pay for one time RIA registration.
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One of my coworkers had an MBA class that categorized MBTI types into 4 colors. I pointed out that their colors and associated traits were an exact match for Hogwarts houses. I'm a proud Ravenclaw so that is my preferred system.
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I would definitely recommend Damodaran's blog for valuation of growth companies. He explains his assumptions and logic very well - his approach is much more intellectually rigorous than is typical, especially in the growth space.
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It was interesting that when the congressman asked Lew that question, he did not dare to answer. He turned back and looked at people sitting behind him, and only after those guys said yes did he answer "Yes". I wonder what those guys are. Treasury lawyers?
Lew is not in charge of knowing whether Fannie and Freddie have paid back $170B or $230B or whatever. He has staff members who know the exact numbers.
He answered the question, and he mildly objected to the framing of the question. But his objection didn't match Treasury's official objection to that question, which they have published in multiple documents and legal filings.
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The official position from the Treasury, FHFA and Fannie and Freddie is that they still owe $189B, and the money they have paid to Treasury has been interest, not principal. Lew did a remarkably poor job of expressing that position. That doesn't mean the position has changed.
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By the way, I wouldn't refer to the structure as "RIA". The investment fund structure and the managed separate account structure both require RIA registration (unless it is very small scale, then either structure can qualify for an exemption).
REITs and expense ratios
in General Discussion
Posted
This looks like a smart thesis Packer. Are you looking to invest in any other REITs besides Broadstone and which do you see as most attractive?