Spekulatius

Somewhere, between #5 and #8, the Millennials will be kicked out of the basement and off the of the old mans family cellphone plan. The struggle will be real.

Because the high market share Is the moat. I know it’s sort of a circular answer.

1) new fridge for wife at whirlpool inside $1100 2) Jeans at Levi’s.com for 50% off and free shipping $28 3)prepaid cellphone service for a year for all 3 member‘s of the Spek family (eBay/ redpocketmobile Store ): $600

It’s about 4% and 1/2 year with of profit. BRK is known of naming their price and sticking too it. No if and when or renegotiation. Keeping it simple may cost them some deals, but it will also make their offers a simple proposition and prevents them from becoming duped like OXY did. when they thwarted CVX.

It’s similar to BRK’s TTS in a sense. I strongly believe that Warren is advertising BRK when he talks about this failed deal with Becky Quick. “ Hey we are open for business and can close a deal quickly!”

Yes, home ownership is Italy is quite high and low in Germany (and even lower in Switzerland) and this is a huge impact on net worth. The balance sheet of Consumer households in Italy is actually in a good shape.

Greece is booming right now, FWIW. Italy has structural problems that existed before the Euro was implemented. Lousy demographics, inefficient institutions and low productivity are the main one that come to my mind. The grip of the Mafia on half the country didn’t help either, although they have improved in this regard. All these will, when they would exit the Euro zone. Italy is actually the main benefactor of the low interest rate policy. If they exit the Euro, the interest rates for new debt as well as for the business within would go way up.

For a low maintenance portfolio, I would probably put my money into index funds, some US, some world Index fund like VTWSX (or equivalent). If you want a value component, one could think about and equal weight cap fund for mid or small cap exposure and maybe some BRK. I also second GOOG if exposure to tech is considered, but I would keep it smaller than BRK, which is diversified by itself. Canada is a strange stock market since there is so much exposure to commodities and banks. If OP wants exposure to this, he could just buy a few individual Canadian banks stocks with an equal weight. if I wanted exposure to energy, I would just buy an oil major like RDS or CVX or a bit SU. Then rebalance this once a year.

A lot of multiple expansion has been with high quality stocks. MA, V, FISV, MSFT various SAAS/cloud plays like WDAY, NOW, rollups like SHW, ROP, POOL, CSU-TO etc. Oddly enough, some fangs like GOOG and FB aren’t all that expensive compared to above. They haven’t really seen multiple expansion lately either, as their share price has roughly followed their growth rate.

^ Thanks for above comments regarding EM banks. I guess I was just biased based on the performance since the GFC in 2008. I have owned EM banks before, made some dough in BAP ( Chile) and one a stub in AVAL (well run Bolivian bank) and I am tracking ITUB too, but not invested currently. I do agree, if they get the Brazilian economy going again, ITUB should be money good. It just seems to be that since 2008, they have used just about any opportunity to scoot themselves in the foot in addition to macro headwinds (waning commodity boom and meltdown of energy markets)

I wouldn’t call something where a significant part of the return comes from closing the gap to intrinsic value a compounder though. A compounder for me is a stock that grows intrinsic value at a high and fairly consistent rate. In order to do so, they will need to earn high returns on capital, Because over the long run, the returns from you stock investment should about equal the returns of invested capital of the business you are invested in. I doubt that a bank (ITAU) in a volatile economy like a Brazil can be a compounder in that sense. Actually most companies in EM won’t work either, because their ROIC isn’t high enough, despite being located in high growth countries.

Sold more $SDI today.

I keep it simple and just mention one compound that is surprisingly affordable - CMCSA. Stock trades at 8.3x Y2020 EBITDA and an ~8% FCF yield is the CS analyst is correct. According to the 2018 shareholder meeting presentation, they have compounded ~17% annually. It don’t see why they can’t do low double digit returns for quite some time going forward.

Yes, I believe it is correct. Compounders that work over decades are rare and in most cases, they keep compounding because management pivots and makes smart decisions. Look at Disney for example - early on it was founder driven and the moat was drawn animations, then parks and then they fizzled on the 70 and 80’s until they got into regular films, CGI then cable (with Eisner), CGI animations (Pixar) then adding additional IP and now direct to consumer. They have to reinvent themselves every 15 years or so to stay relevant. Newspapers were a great business for a 100 years until the wheels came off. Buffet is pretty good at finding companies with enduring moats, in fact that’s his main goal when investing. Even he gets is occasionally wrong (IBM). None of the above is new and has been written about for at least 10 years in the value investing mainstream.

Yes, Fleabag is also great. I just can’t watch this when my son is around. ;D. That’s the thing with Netflix, they have a lot of foreign TV. I am sucker for Brit TV and now Netflix also has a lot of German TV series, Chinese and Korean costume movies and who knows what else. Amazon Prime has one of this too, but no ones else comes close. To get these things one needed to buy a special subscription, which would cost quite a bit, now it is included in Netflix and Amazon “all inclusive” streaming buffet. Disney can’t beat that, but of course they have another angle. I haven't seen them yet, but I've heard good things about 'Dark' (German) and 'Money Heist' (Spain -- La Casa Del Papel). “Dark” is excellent, but it’s also really dark. Money Heist is on my “to view list”.

Yes, Fleabag is also great. I just can’t watch this when my son is around. ;D. That’s the thing with Netflix, they have a lot of foreign TV. I am sucker for Brit TV and now Netflix also has a lot of German TV series, Chinese and Korean costume movies and who knows what else. Amazon Prime has one of this too, but no ones else comes close. To get these things one needed to buy a special subscription, which would cost quite a bit, now it is included in Netflix and Amazon “all inclusive” streaming buffet. Disney can’t beat that, but of course they have another angle.

I would call it BS, plain and simple.

Bought back some recently trimmed CMCSA today. Down ~3.5% today, anyone knows the reason? Anyways, the stock is surprisingly cheap still, trades at <8.5x Y2020 EBITDA. once they reach their leverage target next year, they can resume stock buybacks again. Lots to like - management track record, low leverage, broadband, theme parks and humming along, Telemundo and CNBC gaining market share over the years.

Is it soapy with exaggerated overacting? I've recently watched, again, Ken Burns' The Civil War. Fantastic, as always. The Expansion season 4 and The Witcher are coming soon, looking forward to both. I don’t think “The Crown” has any overacting, I found the acting exquisite. It’s a bit like Downton Abbey in a way, except all the characters and events are real. The season 1 was slow at times and I almost thought I would skip and look for something else, but Season 2 and especially Season 3 got better and better.

Just watching “The Crown” on Netflix and it keeps getting better through the seasons. I am in the middle of season 3 and it is exceptional well made TV.

I wish BRK would detail the summarized earnings and balance sheet from their acquired subs if possible. That way we could judge if they have been successful or not. Wedgwood for example has stated that Lubrizol has not been a success, but how would we know. they bought it for ~12x earnings (post tax) so even with little growth, it should have been an Ok acquisition. Or if their any way to deduct at least the earnings of the acquired subs somehow?

I looked into this, it seems that the right implies a ~62% probably for each drug to approved, which is lower than the estimated probably. From that perspective, it seems like a good value. What tells me to hold this odd is the Fact that the terms of this CVR (all three drugs need to be approved at a certain date) makes it so easy to avoid a payment for BMY, which amounts to $6B total, if some articles are correct. They can just push through 2/3 of the most important drugs and get them approved as quickly as possible, then delay one until after the cutoff date and presto, they just saved themselves $6B. Doesn’t take a genius to think that this will cross somebodies mind at BMY’s management. They could be quite opportunistic about this depending on which hurdles will develop with any of the 3 drugs even if it’s not the plan right now. For sure the intentional delays are a risk. But I don't think they are a deal-breaker. Some good discussion in the comments here. My own view of how management in large corporate settings works, has over the years dimmed enough that I assume that if there is a possibility to game an outcome, it will be gamed in all likelihood.

Ist this all one needed to know before moving on?

I looked into this, it seems that the right implies a ~62% probably for each drug to approved, which is lower than the estimated probably. From that perspective, it seems like a good value. What tells me to hold this odd is the Fact that the terms of this CVR (all three drugs need to be approved at a certain date) makes it so easy to avoid a payment for BMY, which amounts to $6B total, if some articles are correct. They can just push through 2/3 of the most important drugs and get them approved as quickly as possible, then delay one until after the cutoff date and presto, they just saved themselves $6B. Doesn’t take a genius to think that this will cross somebodies mind at BMY’s management. They could be quite opportunistic about this depending on which hurdles will develop with any of the 3 drugs even if it’s not the plan right now.

I don’t think the comparison of WDAY and NOW with CSCO is fair as they are totally different business. a better comparison would be with another software company like ORCL and MSFT. the latter trades at ~8.5x sales now. I bought NOW a while ago (for a bounce after a CEO change) and it was trading at ~13 sales, but given the fact that the year is almost over and they have good visibility, the relevant number was ~10x forward sales. While it is true that NOW isn’t GAAP profitable (due to stock option expense), when you exclude this expense, it is quite nicely profitable. My own take is that it can’t be ignored, but when I solely look at revenue growth rates/share and hence incorporate the roughly 5% dilution from stock based comp and their convertible raises, that it compounds intrinsic value quite nicely (~30% annually) and at that point was a better deal than MSFT. Just a different point of view. I missed the run up in SAAS stocks totally and yet, I think there is a lot of folly in this sector, however, some products are quite sticky and the stocks deserve a high valuation. I think NOW and to a lesser extend WDAY belong in this group, while TEAM doesn’t.