Spekulatius

Exposure to above multinational doesn’t give you much leverage to growth in Indian, as it is only a small part of the operations. Many of the above actually have their subs trading in China (Unilever) albeit at nose bleeding valuation and for us retail investors, there isn’t a good way to buy Indian stocks on their native exchange directly. It’s an interesting market, just like Korea, but unfortunately not accessible to retail investors.

I think what you’re describing is called the recency effect. Any asset that has been down and out for years can be affected by it. It’s almost always better to prospect for investments in the bombed out areas. So I think you are on the right track. I’ve also found that when nobody likes your idea and thinks “You’d have to be crazy to buy ____” you should get excited. But you still have to do the work. You need to be different and right, not just different. Bombed out is not enough to warrant an investment. I would always assume that anything that is down and out for a long time, is down for very good reasons. If you invest in these assets you need to see something the crowd doesn’t see and you need to be right within a given time period. Also, one should distinguish between a mental block and a heuristic. A heuristic is based on experience and is different than a mental block. The human brain is lazy and probably doesn’t want to look into areas that have proven to be minefields before when there seem to be simpler ways to accomplish the same thing. I admit of having a bias towards tanker stocks, E&P, mining stocks etc. I don’t think it’s a mental block, I just don’t feel it’s worth spending time on to turn stones around in areas where you need to be right or get wiped out or vastly underperform. It’s a heuristic and to some extend a circle of competence thing.

The investible pool in Vienna is quite small. in the past, I invested in Vienna Airport (FLU.VI) with decent success, when it was fairly cheap. The best blog I am aware of (for Mostly European stocks ) is Vallueandopportunity. I don’t think he owns Austrian stocks right now. I think NXPI is a higher quality alternative to Infineon at a similar valuation. Andritz is a good company, it does not look very cheap. I think Rosenbauers performance got worse, because of a cartel lawsuits where the suppliers of fire tracks determined quotes for market shares to keep prices high. With “fair” competition, margins may be lower forever in their business.

I would wish them to buy some companies in the aerospace industry in addition to PCP. It’s a great secular growth market where patience will be rewarded. The second one is infrastructure. Pipelines (KMI ?), AirPorts, Harbors etc.

For those who care, Eric disclosed his legal issues and the situation he is in prior to the meetup. I wasn’t aware of it, since don’t follow local news all that much. The story is what it is and I am not inclined to judge. What I do know is that the three of us had a great time talking investing, politics (a bit), stocks , doing a podcast (my first one) and play a board game. I wouldn’t hesitate to do another meetup again.

What’s wrong about listening to my incoherent ramblings about a stock that one is better of not knowing about?

I agree with Viking that the risk is WEB age. I think the company will be differently run after he is gone. Headquarters will become bigger, because nobody can fill WEb role as a CEO if the holding with such minimal staff and ensure compliance. There is a risk that the culture will change for the worse. I could see BRK getting broken into three pieces (Insurance, Utilities, Industry), but that may not be easy, because the Insurance subs own shares in the other parts as well as the holding company and it may not be able to get the stakes consolidated. BRK is huge and May becoming too large to control for a new CEO. I am in the 5-10% bucket and wouldn’t go higher than 25%. There is always systemic risk that someone, somewhere does something and affects the whole company.

You haven’t seen their stores, that’s why....It feels like it’s dying and Toys r Us 10 years ago. I haven’t been to their stores in years, it’s totally redundant with Target and AMZN if you have prime. They were very popular in the 90’s and early 2000’s, but then slowly lost their touch.

In my experience with lightly traded stocks, a limit order at the ask will only fill 100 shares and then the bid will move to one penny over your limit order which is of course why market orders are good to use when filling the order is more important than scalping a couple pennies. Buth then, a market order can really stick you with some bad fills, hence the allure of the adaptive algo, but alas it has its problems too. Ain't no such thing as a free lunch... Free trades at Merrill Edge are nice because you can split your order into multiple orders for free (assuming you are within your monthly allotment of free trades). But then Merrill won't trade many low price/volume stocks anymore. Years ago, I absolutely never used market orders, but over the past 10 years, I find sometimes they are just the only way to get a fill. Yep, but the most annoying trades are those where your bid never gets a fill, but then you see a trade for 0.01 penny higher a microsecond later. While you can only trade in 1 penny increments some HF trade can do smaller increments and suck up all the liquidity. At least that’s my take of it.

You can buy MS for book value today :-)

Mine looks like this: Business evaluation 1) Is this a good business? 2) Is the stock cheap? 3) Is management capable and honest? 4) Is the stock safe (balance sheet, business resilience) 5) Are there more head winds or tail winds going forward?

Never invested in this company or followed it, but just by reading the last couple of pages it seemed they tried to time the market like some macro tourists. (read: they are not value-investors.) Is my understanding correct? Yes, they made a bet going long garbage and short the general market, which didn’t work out. They also had a deflationary macro view and did lose money on inflation bets. The latter are gone or worthless , as are the shorts on the general markets, but they are still long garbage and even adding to it (Seaspan). The latter may work out due to better protection and management (Sokol), but you know what they say when good management runs a bad business...

I can live with terrible Communication when the execution is good. Terrible execution with terrible communicsti9n however is a real problem. FWIW, I own several insurance co. with decent underwriting, and they can do high single digit ROE currently with zero equity exposure. FFH has ~$4.6B in equity exposure (this has been flat over the years with ~$12.5B in equity (numbers are from memeory, so may be a bit off), that’s roughly 37% of their equity. I am guessing they can’t go higher, unless their stocks actually start to appreciate so the addition mal equity exposure becomes “House money”, and not necessary to support the insurance business statutory capital, like is the case with BRK.

I agree with then concept of trading volatility. If the current prices environment of instability and volatility persists and the market just swings around in crazy moves and ends up going nowhere, this could become very profitable. Note that POTUS always talks up progress in trade talks with China, when the market tanks, with no follow up. Seems like a good bet to sell these releases. The Fed talk yesterday very much reminds me on Bernanke‘s armchair talk in March 2009, which pretty much marked the bottom of the bear market. It’s a different situation now, but this talk was clearly orchestrated to calm the markets.

It’s not a truck, but I absolutely love our 2015 Subaru Forester. Mileage is actually better than with my 2012 Hyundai Elantra on our suburban roads (31 mpg vs 28mpg LT average) despite being heavier and having a 4 wheel drive (which is very handy in winter). The progress in mileage in the last few years has been significant.

Pretty good talk from Damodaran about the current equity risk premium and why he feels good about owning equities right now:

Market timing is tough, but both Howard Marks and even Graham to some extend thought about the market in a broad context. Howard Marks reminds us where we are likely within a cycle and Graham suggested to put a higher percentage of a capital into bonds when the market was high and bargains were few, as far as I remember.

I own at least one of his picks, Ming Fai (3828). They shut down an unprofitable business line the past few years, are paying out a big dividend. Market cap ~750m, ~300m in excess cash and 100m in net income last year. Decent company & very cheap. Allan international is similar company. Webb sometimes uses his stake to push a bit for sensible capital allocation so I guess he generates his own catalysts? My guess is that he's not very busy with looking for 'catalysts' and just buys reasonable companies at unreasonable valuations. Though I have to admit I don't understand all of his picks. How do you know what he owns? I don’t see it on his webb site.

The deferred taxes on LT gains need to be taken into account, since the cost base of their long term holdings is so low.

Other than Trump being a wildcard, I see no connection to any investing strategy.

FWIW, very few companies in the auto business have FCF = net earnings. For many, it was about half that number, which makes even a 5-6x PE less enticing. Some of the auto suppliers don’t have debt disruption risk, like for example seat manufacturer LEA. LEA is one of the companies that deserve a second look, because they do actually generate a lot of FCF and are well managed with a solid balance sheet, unlike ADNT. The problem with suppliers is generally low margin and fixed cost, as well as dependency on fee customers which could go bankrupt and pulling their suppliers down with them. Another angle is to invest in EXO.MI, You get a double discount, as they hold discounted FCAU as well as a steep conglomerate discount, despite being a good capital allocator.

I am guessing that was the bank where the CEO felt he needed to dance as long as the music keeps playing. One real lesson from 2009 is that you never want to be in a situation where you needn’t dilute at the bottom. This is what killed many Bank stocks, even those those that survived. It’s sometimes that little extra buffer on the balance sheet that doesn’t matter in good times that can make all the difference in bad times. I never worked in banks, but have been with companies where management destroyed a lot of value (99% from top to bottom in one case and 70% in another) and they still made out very well. Quite amazing how incentives are stacked.

i bet Warren weighs the price declines for his holdings vs the price declines for BRK, and BRK until today has actually outperformed. My guess is that he put much more funds into adding to his holding than buying back BRK shares. This may changes, when the relative value proposition changes.

Bought some TRUP (starter position) after the discussion with OG Investor. I am not totally comfortable with it, but I feel that I can’t let a potential very long term compounder slip away. It also helped that the stock was down a decent amount today. Added a bit of FDX. I have some high priced shares that I am probably going to sell in a month to harvest some tax losses.

Things can always get worse. I share your concerns regarding macro. I do think that a lot concerns are baked in current valuations.