constructive
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Posts posted by constructive
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Nobody is going to offer Greece financing on terms anywhere near as good as the troika. I think refusing to negotiate with the troika, in the face of 11% yields and running out of cash, signals this is the big one. Either they exit the Euro or they force a huge >$100B haircut within the next few months.
Bad news for Fairfax/Eurobank - and many other European banks.
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Drug companies have been on fire the last 4 years. The biotech index has almost quadrupled, the majority coming from higher multiples, not earnings. From a macro perspective now is definitely not the time to be thinking about buying small cap pharma companies.
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Regarding #4...
Are you sure there isn't memory bias going on here? There is no logical reason that over a large sample size this would be a problem -- unless you're strategically doing something very wrong. In fact -- I'm pretty sure waiting an extra week or month possibly to convert a short term capital gain to a long term capital gain is going to be a net positive over the long run for most people. Like everyone I've had a couple of these bite me in the butt, but over the long term (in taxable accounts) it has been quite profitable to pay the long term capital gains rate instead of ordinary income tax. I'm sure people forget about all the times they delayed a sale for tax reasons -- and stock increased another 10-15%.
I agree. Holding stocks a few months too long might be a systematic problem for a very small minority of people. The vast majority of people have the opposite systematic problem which is more serious.
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Predictable 25% growth at 12x earnings is not very easy to find right now.
If you are willing to moderate your growth requirement to 10-15%, take a look at VIAB and WDR.
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Congrats Gio.
I am at -4.5% for 2015. Although looking at the positive side, at least I am pretty confident that those results are repeatable. :)
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I think humility, and an evidentiary approach, are underrated when talking about macro economics and investing.
The market doesn't care whether or not you understand why the dollar is economically useful.
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4. So far Buffett has been shown to be wrong on the whole issue.
Really? He made $2.3B on foreign currencies and silver in the early to mid 2000s. Since then his view has become more positive on the dollar's value (and he holds something like $60B in dollars). This has coincided with recent dollar strength versus other currencies.
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Waddell & Reed (WDR) - an institutional mutual fund manager, they also own 20% of Legendary Entertainment, 11x earnings. Asset management is one of my favorite business models since it is scalable and high ROE.
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$100 per transaction is not sustainable. Let's say $10 per transaction is a fair price. Either transaction volume has to increase 10x or BTC has to drop 90%.
As predicted, cost per transaction is now below $10.
By my math the average transaction amount is roughly $60,000,000 per day / 80,000 transactions per day = $750. Which seems surprisingly high (though I'm sure the median is much lower, and probably over 90% of transaction volume is speculative). At current levels Bitcoin's cost and speed appears attractive compared to Western Union and Moneygram.
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I have no idea why international Swiss stocks gained when measured in USD or EUR. Doesn't make sense.
Probably because the currency markets are more responsive to currency issues than stock markets are. Stock markets, like any market have some amount of price momentum or stickiness, so they don't immediately fully rerate to changes in currencies.
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Congrats Orange, great picks!
After being in the middle of the pack at midyear, I'm surprised to come in 3rd with a 100% hit rate. If only my short positions performed as well in real life...
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2014: 13%
2013: 52%
2012: 34%
Winners include Apple, DirecTV, Baidu and Netease. Losers include Genworth and Altisource.
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They earned $4M this year so $1B valuation sounds about right.
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Are you still planning to start an investment newsletter?
Actually I am writing it... But no cash flowing from that endeavor until now... :(
Gio
How can I become a reader of this newsletter?
Your first step should probably be to learn Italian.
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Congrats gio!
Are you still planning to start an investment newsletter?
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Genworth at one third of tangible book value.
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Taibbi says financially illiterate stuff like this:
"Couple this with the fact that the bank's share price soared six percent on news of the settlement, adding more than $12 billion in value to shareholders, and one could argue Chase actually made money from the deal."
This article, and Taibbi's work generally, is really poorly constructed in terms of logical leaps, false assumptions, innuendo, etc. He just plays on the prejudices of his readers.
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The substance of the article is the same subbing X for 9 in the title.
Yeah, exactly. The writer kept the legal analysis superficial and didn't engage with the quantitative financial aspect at all. I have no interest in anyone's prescriptive opinions until they've demonstrated descriptive competence.
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Like a lot of pop financial writing, this seems really naive to me.
There is no recognition of the fact that $9B is an enormous amount of money and might be an appropriate fine. The writer just presents it as self-evident that however much it is, it should be more.
I also think the whistle-blower really screwed up her own legal strategy. If she wanted recognition and whistle blower money she shouldn't have assumed that the government would help her out. She should have sought out JPM's counterparties and testified for them.
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The last three lunches have been $20K, $18K and $17K. But I think they have also involved a smaller number of people.
Anyone interested in forming an 8 person group bidding ~$3000 each? I'm on the east coast so I'd prefer NYC, or even better DC.
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Three words: Virtual Reality.....Porn.
Yeah, with all 5 senses.
Smell is going to take up a lot of bandwidth.
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As a political issue I think it is more insurgent vs establishment than right vs left. Nobody is going to confuse Epstein for a liberal.
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If the value of shares was $0 in 2008-2011, why should it not be $0 in 2012 and beyond?
Can you expand on that a little bit? There are many ways to go with what you're saying, and I just want to make sure that I'm understanding your point.
Why was the value of the shares $0? Because there were losses at one point in time? Because there was negative equity at one point in time?
Just trying to figure out what you're saying.
The value of shares was $0 because the financial condition of the company, including the cost of government financing, prevented any reasonable expectation of returns for shareholders.
I realize that sounds circular, but it all flows from the validity of the financing.
One last comment, FHFA has successfully put the company in sound and solvent condition. This has involved putting the public shareholders in clearly unsound condition. The company is not the shareholders.
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In other words, but for the Sweep, the companies would have built a combined amount of capital equal to about $188 billion
That might be a good legal argument but it is financially naive. But for emergency financing, the companies would have entered bankruptcy in 2008, potentially Chapter 7 as they would have rapidly run out liquidity to even keep the lights on.
You keep talking about 2008, and I can't understand it. If you're a doctor, and you save a person's life, are you then entitled to murder them later?
We are talking about what happened in 2012. No one needed emergency funding in 2012.
If the value of shares was $0 in 2008-2011, why should it not be $0 in 2012 and beyond?
There can be no taking of something that is worthless.
I don't believe the shareholders were even impaired by the full sweep, since they were already fully impaired by the insolvency and emergency financing of the company. The ultimate return for the government with the sweep will likely end up below 10% annualized.
Best Money Managers Looking Forward 15+ years
in General Discussion
Posted
He showed the opposite.
During the four years he ran both, he averaged 31.9% annual returns in the fund versus 18.5% with Berkshire.
During the 12 years he ran the partnership, he beat the market by 15.5% annually, versus 11.9% for the first 12 years at Berkshire Hathaway.
And those are net numbers, gross returns are even more in favor of the fund structure.