Spekulatius

BIAL (Bangalore airports) seems like a nice business. I wish there was a direct way to invest in it.

I am not sure, why owning a conglomerate saves you from having to analyzing the business. In a way, owning a conglomerate makes the problem worse, because you need to Analyse all the components of a conglomerate. I guess , the idea is just to own a good capital allocator and be done with it? I guess you could look at holding companies as well than conglomerates. There are quite a few to chose from in Europe and Asia. Investor AB, Exor NV, Groupe Brüssel Lambert /Pargesa , Schouw & Co, CK Hutchison and Jardine Matheson are some that come to my mind and are quite cheap and reasonably well managed.

You can often get a picture about the industry by stitching together info from public competitors. In this case, I would look at NLS.

I don’t have data on how much s driven by new home sales, but I don’t think its the main driver. I believe the driver are home renovations and heating/ air conditioning replacements. I think that REZI‘s managment May have low balled the guidance , so they can make/ beat the numbers easily - they probably have incentives to do so. The strong last quarter was a good sign. The business was probably managed for cash and I think being a separate company will benefit them.

Spek, What's your thesis on Rezideo? I looked at both HON spins and couldn't get comfortable enough to take a chance. Any thoughts on how they are competing against upstarts in the smart home market? Rezi is competing against the smart thermostat upstarts, but they are also supplying them with sensors and components. So it’s an opportunity for them to participate in a growing market.

Bought some REZI (Honeywell spin-off) today on weakness. I also added to WBA.

You know the photo is staged when she wears high heels on the factory floor. Was there any expectation that it wasn't staged? As in, a photographer sneaked in the high-security ITAR-compliant factory and just happened to catch in a candid moment the COO of SpaceX admiring some hardware on the factory floor? ;) Because I like nit pick: 1) High heels are not allowed on the factory floor typically, because they are considered a safety concern. 2) The fact that the COO wears high heels on the factory floor means that she either doesn’t care about safety violations and/or she is almost never on the factory floor (except for PR). Or perhaps nobody cares about safety violations 3) It’s not a big deal, but sometimes, these little things give you and insight into the company culture.

A lot of the volume comes from HF traders scalping for pennies and they have a direct plugin to the exchange and don’t trade through brokerage like we do. They also seem to have special rules that they can bid in smaller increments than the average investor, increasing their ability scalp. I do deal with low volume stocks where these shenanigans are more obvious. You put in an order for 100 shares of XXX and then you get 10 shares (To Name an example) of XXX and the bid and ask instantaneously moves. It’s not another human doing it, but a trading bot for sure. These things get really old. If there are other ways to get rid of these shenanigans I am all for it. The way I see it, the aggregate profits from all these HF traders come from investors pockets. Aas long as the sum of these taxes or fees paid is lower than the aggregate profits from HF traders, then it’s a net benefit for the investors. I think this all started when the e changes realized, that they can make more money serving the HF, than from serving their originally mission to facilitate trades amongst investors.

I totally agree. I also have been outbid by fractions of a penny. I think a small tax that introduces enough friction costs for them to go away would help some more.

I am in favor of a small transaction tax. The main benefit for the small investor would be that it penalizes these HF trader leaches and hopefully puts them out of business. I believe that this would help the market transparency. I have no idea if the 0.1% transaction tax would do that , but I would support any tax that is just high enough to get rid of HF traders.

We are on the internet. What do you expect us to do?? Haha, very true. I read the article and it’s true that the Aegis fund seems to run a true value strategy (with microcaps) and it’s performance has been dreadful. So, I am not sure the authors claim about the performance of the strategy is correct based on the examples provided. Either way, the studies about low P/B were I think academic study and not based on mutual fund performance.

I have been listening to a lot of value investing podcasts and most practitioners seem to believe that price /book has stopped working for some time ago. Quite a few others believe that even PE or even any quantitiave metric has stopped working, at least for mid and large caps. I think there is evidence that this is probably correct in most market segments. There are probably pockets in the market (microcap) or countries where these old heretics for value stocks still work. It is probably more important to understand and evaluate the business now, rather than looking at metrics. looking at metrics now is really easy, but understanding the business is harder and there is a better chance that a business is misunderstood rather than a business with great great value metrics is overlooked.

Well, Detroit went through a bankruptcy in 2013, and the Pensions obligations took a much smaller haircut than other debt obligations. Buffet wrote about this and clearly stated that moving a company to location with a pension problem implies a liability for the company or their employees and needs to be considered. Buying a property or house in such a Location is pretty much the same.

I am betting on tequila via CUERVO.MX. Tequila is underpenetrated anywhere but in Mexico and the USA, imo. Supply constraints for Algarve hurt in the short term, but should benefit an integrated company like Becle ( CUERVO.MX) in the long run. Family business and a good balance sheet are additional positives. I think the most important attribute in spirits is brand building.

I found this article about trend following quant funds interesting. It’s turns out they didn’t do too well in 2018. Apparently the culprit is that there is too much money invested in the same strategy: https://www.bloomberg.com/news/articles/2019-03-01/one-of-wall-street-s-most-popular-trading-strategies-is-now-failing

Interesting article on beer. I was surprised to see that even craft beer brewers are hurting. It’s a bear market for beer :o https://www.ccn.com/millennials-killing-us-beer-next-victim-is-heineken The trend to spirits is mentioned as well. Heineken is the Budweiser of Europe, imo. the stock looks pretty overvalued too, but I think they are better run than Ambev.

Added to FCAU and bought a starter in WBA

My guess is the fact that this deal is in the news means is that the rumour likely is false. BRK has been very good at keep on their plans secret in the past.

The earth has reached the carrying capacity 20,000 years ago. Then the humans invented agriculture. I think the concept of a fixed carrying capacity is incorrect as it has static variables as an input, but humans are highly adaptable.

Good point. I too am ignorant on the specifics. I didn't mean to impugn Metro Bank management, but to respond to Cubsfan's comments and assessments as I understood them. Falling victim to a charlatan is the worst case scenario that we all are trying to avoid, but there are many lessor risks in evaluating manager skill and honesty. One heuristic I developed (in a costly manner) was to always sell any financial stock that has a run in or problem with a regulator. I have several experiences with these issues and one I remember vividly was that AIG in one of their filings around September 2008 noted a disagreement about valuation with their auditor , as I recall. I thought about this for a while, my position was already in the hole at that time. I decided to sell, because I thought if their management can’t agree with their auditor about valuation of some assets, who am I to value this stock? It turned to be the correct decision. I had several other experiences like that with banks and none of them would have worked out. It’s a bit different with Industrials or non-financials, but with financial the rule to to sell first is probably right in the vast majority of the cases.

A 10% efficient system that captures energy at 2c/kwh needs an input of energy with a <0.2c/kWh cost to work at the given value.

I second what Read the footnotes stated. My impression is that Metro’s management lacked the ability ( to exactly understand the rules governing banking in the UK) and were not necessarily dishonest, but I could be wrong. I haven’t followed this story too closely however.

Hi. I've been looking a bit into that. Seems very interesting. Have you seen a decent writeup anywhere or mind to share a couple of points? What's obvious is the deposit growth, which is incredible. The culture is based on the Commerce Bank model, that Vernon Hill "invented" in America. The culture is real - I can tell you that. Both customers and employees love this company. You have 56 "stores" going to 100-130, roughly in 5-6 years. The "store model" is totally repeatable - and UK will eventually support, perhaps, 200 stores. There are structural reasons for the growth - by that I mean - the UK banking sector is being forced to shrink (I mean the legacy banks) as the UK regulators and the public's interests have not been served. (RBS is still 65% owned by gov). So some assets are being dispersed, the market is opening up, and legacy branches have closed at a fast rate due to cost cutting and poor locations. So there are significant industry tailwinds for the growth of "challenger" banks. Metro is the best of them all. It's the fastest growing bank I have ever seen in my life. Looks like Metro Bank is blowing up. Risk weighting for mortgages off - they had RWA for commercial mortgages at 50% rather than 100%. Did they forgot to read the manual for bank accounting in the UK? Looks doomed to me, or at least has to raise capital. On then surface, it still looks adequately capitalized, but I stay away from financials that can’t get their accounting right - a lot of them become doughnuts. https://finance.yahoo.com/news/british-lender-metro-banks-2018-072746266.html Dumpster fire continues - cash call: https://finance.yahoo.com/news/metro-bank-slumps-shareholder-cash-081129938.html

Is anyone here qualified to do so? The presenter certainly isn’t. He has Nobel price in physics based on work done in the 60’s and knows very little about Meteorology, nor is he expert in statistics. To debunk climate change , he would need to go into much more detail than he did in this talk, publish some peer review work in this field etc. To my knowledge, he hasn’t done this. FWIW, i have a PhD in physics but that doesn’t make me an expert in other fields. So, what are you doing here in an investment forum discussing investments when you do not have the appropriate educational qualifications? If only the people who can discuss climate change are climate scientists, why are politicians discussing climate change? Dismissing someone's argument because of their lack of expertise is one hell of a condescending manner that would turn off anyone who might genuinely want to participate in a healthy discussion otherwise -- wasn't that the point of democracy? Of course, maybe the goal is to simply shut down all types of discussion around climate change. I didn’t know what there is an qualification needed to sign up for an investment website. The lack of expertise of this presenter is a fact. He is not an expert in climate science and doesn’t really have peer reviewed publications as far as I know. He is consdescenting to the scientist working in this field as he claims they are faking data for example. The global warming theory has been existing since the 1960’s and slowly more and more evidence has been generated . That’s almost 60 years of science. Name me a case where the science consensus with a huge body of work has been wrong for 60 years in recent times. Also, science is not a democracy - the best data and theory wins, not the one with the most votes. I think the real discussion that the public and politicians should be having is what to do with the data. just acknowledging the clime change problem does not necessarily mean that we should abandon all fossil fuel sources. This is a decision that the public needs to make, not the experts, The experts should, provide the input for the decision, but the decision needs to be made by the public. That’s where the politics come into play and where imo some scientists overstep their boundaries. Politicians that state they believe this or that without having a clue about anything are overstepping their circle of competence, imo and are hence not credible.

Bought a little bit of GNRC. I might get this one cheaper , but I like the sector and the brand equity. I also believe this sector has secular growth, even though near term results can vary, based on weather patterns.