Spekulatius

I realized that LYG isn’t as cheap as it looks. The reasons is that th statuary returns are much less than thr opereting returns. Two items make a large difference PPI and other provisions: PPI provisions were ~1.6B £ / year and other provisions were 800M£ . Those suck of roughly 30% of the opereting earnings. Then there is a pension deficit of roughly $7B£, which is 15% of thr equity base. It looks like Uk regulators are pretty keen on closing shortfall (unlike in the US), they have to to pay increasing amount into the run maxing out at 1.3B£/ year to eliminate the gap. If you just look statuary returns, the earnings/share are 4.4p, and then a 66p share price does not look cheap. I briefly looked at Barclays, which trades far below book. The 2017 shareholders letter is quite honestly depressing. All the profits during the last 6 years (35B£ roughly ) went to litigation and conduct charges, non core losses (from runoff business) , taxes and losses on disposals. zero value created for shareholders. When will it end? Even the CEO doesn’t know. I feel that the skandinavian banks have more promise.

I have been looking at European banks recently. Not all of them are sick dogs like DB. I found some fairly strong looking and reasonably cheap business there. Here is an excellent article about Lloyd’s (LYG), which also has an interesting chart in it that covers other European banks: https://seekingalpha.com/article/4166898-lloyds-cheapest-high-performing-developed-market-bank Danske Bank book value: ~165 DKK share price :~ 212 DKK Earnings:~20DKK ROE: 13-15% I noticed that they have high notional leverage (equity is 145M DKK and total balance sheet is 3.54B),but a lot of these are mortgages. It sure if these are guaranteed or not, may be John can help out? NIM is below 1%, but high leverage enables satisfactory ROE. Unless I understand, why this leverage is “safe”, I wouldn’t touch it. LYG Book value: ~55p Share price ~ 66p Earnings ~ 7 p LYG is probably the best managed Uk bank, they have negligible investment banking activities if any. NIM is close to 3%,I was surprised to see it that high because when I looked at it a while ago, it barely above 2%. Potential issues with Brexit exit need consideration. SVNLY book value: 70 SEK (?) share price : 98 SEK earnings 8.5 SEK ROE ~12% This bank has shown very consistent performance for the last 10 years, NIM is <1%, but thr bank is rated AA and apparently assets are very safe. Banking model seems similar to Danske. share price has been weak recently due to slightly lower Earnings. They have distributed a lot of dividends, typically 65% of their earnings and yet still managed to grow their business. ROE is ~15% in Sweden, but lower elsewhere (Nederland, GB, Ireland). This stock looks somewhat less favorable due to high Swedish dividend withholding tax of 30%, which together with the high dividend, penalizes shareholder in the US. https://danskebank.com/-/media/danske-bank-com/file-cloud/2018/4/interim-report---first-quarter-2018.pdf https://www.handelsbanken.se/shb/inet/icentsv.nsf/vlookuppics/investor_relations_en_q-reports_hb_2017_eng_annualreport/$file/hb_2017_eng_annualreport.pdf I hope to get some discussion going, because I am sure that there are some gems to be found. Some of these banks look cheaper than Us counterparts right now.

Agreed an sharing vs eating your one plate. Sharing isn’t common where I am doing from, but I rather prefer it now, since I learned it from my wife’s family. Long Island is a Bit of a drag in culinary terms as it just lacks diversity. There are some decent Asian places, gastropubs, but mostly it’s just an over abundance of way too heavily Italian food, they isn’t really like the real stuff in Italy, as far as ai remember. I did find some perfectly preserved retro (unintentionally, I presume) German restaurants here, that are far better than anything there is on the left coast, as well as some German butcheries, which make a perfect Sauerbraten. The diversity in food generally follows the diversity of people moving and living there and Long Island as this point isn’t very diverse yet. FWIW, I have found most of the great hole in the wall places via Yelp actually.

Yeah, to change the world, you need to be like Bill Gates--old and well-educated. Wait a minute.... Never mind. Imagine what Mark Zuckerberg and Steve Jobs could have achieved, if they hadn’t dropped out of college ???

Good advice given here. I think in most cases, when the rent yield (assuming you would rent the place you are buyin) is higher than the interest cost (assuming you would finance 100%), I think a purchase is almost a no brainer. if you are married, SD is correct that your wife will make the decision for the most part. if you are single, you may find the unexpected benefit that owning a house will make you more attractive to many women, specially if you accomplish to do so at a relatively young age. 8)

The fact that this thread even exists is counterproductive (although some advice is worthwhile). It’s like getting help from your nerdy friends to prove that you are not nerdy. I would delete this thread and concentrating on proving they you contributed to raising your kids, that’s it. The fact that you did investments on the side doesn’t matter. Other folks have to go to work 8-10 hours a day and still don’t lose custody of their kids in the case of divorce - there is a high hurdle for this nowadays.

Seems dangerous! I live in Mexico and we are about to elect a new president and part of congress. The candidate that’s leading (by a lot!) is clearly socialist and against market systems. This doesn’t mean that if he wins he is going to nationalize private companies or move against industry, nor that congress will approve such decisions, but he may control an important part of congress and indeed make some moves against free markets. The peso is reflecting some of these fears and if I were to bet (I’m not), I would bet against the peso! I base my investment decisions on facts, not on news or emotions. But hey, that makes a market. Maybe i am wrong. Currency speculation is precisely that, speculation. And facts tend to be deceiving when dealing in an speculating environment, but seems you are comfortable and convinced of what you are doing. I was just trying to point you in the direction of some “facts” you consider news or emotions, so be my guest! I agree with above. A bad government in a developing country (I consider Mexico 2nd world) can do a lot of damage to the currency via debasement, just look at Argentina or Brazil a while ago, So this trade is assymetrical in a negative way, IMO.

I think Eric should look for documents that prove that he was involved with the kids, get statements from the people who been running the activities, friends, That ought to be easier than showing some post from and obscure Internet forum, which are almost more likely to play into the hands of your wife’s lawyer. Good luck!

If I were an investor in his fund, I would take my money and go elsewhere since these side interest helping the performance of his funds in any way.

I don't doubt that at all. But, what will be the potential savings? A typical train might move 10,000 tonnes of freight and it requires how much labour to operate? Are there three guys in a train these days? So, if you eliminated those three guys, you'd save perhaps $100/hour each, or $300/hour total? So, you might save $300 for every 600,000 tonne-miles? Those savings don't strike me as a game changer. . Eliminating human error from railway operations, however, is probably a good thing. SJ I think improving the efficiency and reducing errors will be the largest benefit. Unions will probably be trying to block progress, but the same is going to happen with respect to autopilot trucks

I think we will have self driving trains before self driving trucks, since trains have already a dedicated lane, by definition. It should be much easier to implement and in fact there are already several systems operating.

I think that FB is way cheaper than GE. GE does have a very low cash flow yield that is almost entirely consumed by the dividend, high debt load, pensions issues and probably more accounting skeletons hiding some where in the financial arm. None of the above applies to FB. I think FB FCF yield is equal or higher than GE’s, especially if you take the EV as a denominator rather than market cap (a bit unfair because GE has a financial arm)

One port company that I've spent some time on is Xinghua Port Holdings (1990.HK). There are a couple of things I like about it: - It's a recent spin-off from Pan-United Corporation (P52.SI), a Singapore listed company. Xinghua got its separate Hong Kong listing in early 2018. It's likely that some of the Pan-United shareholders aren't interested in owning the Hong Kong listed port business and that there is/has been some selling pressure. - The ports are majority owned by Xinghua, most Chinese ports are majority owned by the government. - The valuation look reasonable. The two ports they own are Changshu Xinghua Port Co. (85.5% stake) and Changshu Changjiang International Port Co. (77% stake). Both ports are adjacent to each other and located on the southern bank of the Yangtze River. Cargo types include pulp and paper cargo, steel cargo, logs, project equipment and containers. The valuation looks quite reasonable to me. The market cap is $1.02bn HKD or 821m CNY. Net income for 2017 was 71m CNY (excl. minority interests). Book value is 748m CNY. So you're paying 11.6x earnings and 1.1x book value for a business that should benefit from an increased flow of cargo traffic on the Yangtze. What has stopped me from investmenting so far is that the growing revenues for Xinghua's ports over the last decade haven't translated into higher profits. Those profits have been pretty stable, but not growing. I haven't done enough work on the company yet to figure out why this has not been the case. That said, the downside looks well protected because the business has been consistently profitable. Their debt level of 624m looks quite low as well. Operating cash flow was used to reduce debt by 100m RMB in 2017. This is an analyst report from 2016 about Pan-United that contains some useful info about the two ports: https://brokingrfs.cimb.com/Y6MF761G5YImQr9s1dfxyS25w2irrtNiSvvcfwmEOoJwOO-lDrnrqsZNN5k7Rm9nCpMAgM2u6NZ4Tg2.pdf (PDF) If you or any other readers here do some work on the company, I'd like to hear your thoughts. [Edit:] I had some feedback on Twitter about the company and they appear to have a bad safety record. There was an accident earlier this year, which I read about, in which four people died, but apparently there have been other deadly accidents at their ports in prior years as well. I read about Xinghua Ports in an hedge fund letter - I don’t recall which one - and put it on my watch list. Apart from a 10% price jump after ai put it there it seemed to me very much of a niche business with their specialization on pulp. I am guessing that one of larger ports in their area could easily desplace them, if they wanted to. Then there is this issue with the government owning the land, so thr port is more of a concession than an ownership. I think the land lease is up in 15 years or so, but don’t recall the exact date. I have read about La-Ka Shing and all his companies ( Cheung Kong, Hutchison ) seem like to be well run with no scandals whatsoever. I will have a closer look, as they seem to be a great way to invest in China with little worries.

I think it is difficult for value investors to succeed beating the index, when thr market is rising mainly because of multiple expansion, which is what has happened from 2012 to now basically. Multiple expansion is not so much driven by fundamentals, but rather by exogenous factors (interest rates, momentum etc) which tend to be ignored by value investors. I also think that many successful business starting out as asset light models means that value investors ignore them or underestimate their growth potential. The latter is really a paradigm shift, while the former will very likely reverse itself.

I have looked at 144:HK specifically and I can’t square their information in their 2017 annual report with Moody’s credit opinion. The leverage based on what I see on their website looks fairly low, while Moody’s opinion seems to suggest a ~6x Leverage (Fund flow is 15% of their debt per Moody’s). China Merchant port looks optically cheap, based on book value and current earnings ratio, But I am not sure, I understand the, correctly. It seems that he minority subs,of which they seems to be buying quite a few recently make a significant difference, but I am not sure why the debt of those would need to be consolidated. I do understand that this is a state owned enterprise with minority public shareholders, so their goal may be to further trade more so than making shareholders rich, although the two are not mutually exclusive. I also understand that ports in China are more like long term concessions, since the government owns he land underneath the ports and may take them back, on e the lease expires. seems less likely to occur with a state owned company, but what do I know. I would appreciate more color on this or similar companies, especially port companies. it’s a good business and there may be opportunities there, but also pitfalls, which makes comparing them to western enterprises that we are used to more difficult.

Yeah, I recall that one too. I loved Mungers answer when he was asked what he thought about thr question “I am glad she is not nine years old”.

When you buy JD for example, you don’t directly purchase a stake in and internet business in China, you buy a stake in a shell holding company in the Cayman isles, which holds IOUs on shares in an Internet business in China. If the government of the current managements decides to screw you out of your shares, then they can easily do so, and you keep holding your worthless shares in the Cayman shell company. That is one reason, why Chinese stocks with this structure should be much cheaper than comparable shares with a direct ownership structure.

Boy, I am relieved to read this report. With the growing stable of owned businesses, I was worried that some of the subs had country club type work environment. Lifetime employment guarantee for all type of shit. Living in Chicago I had heard of the cushiness at Kraft with layers of management each with mini fridges stocked with free food. That was before 3G. They probably should get the fridges back into the offices. If the 3G guys tried their own food every once in a while, they might be more inclined to make it better.

You need to set hard exit criteria for these kind of trades. In case of BH, I think you would need to set a date by which the position is sold. If you don’t do this, you let the botched short term trades become a long term investment, while you know they are not potatoes really. Beware of changes in the investment thesis, they rarely work out. Easy to say, but hard to do.

Valid posts about BH from several fellow board members here - but not based on the time horizon applied by treasurehunt for this move. To me, it's more like SharperDingaan buying DB back in September 2016. I agree, for a short term trade with a clear exit - win or lose, Mr. Bigs integrity is almost irrelevant. Speaking of the DB shipwreck, the price is almost back to where it was in 2016. Are they better or worse off than back in 2016? I have a hard time telling.

I am positive on DIS, but I don’t think that DIS streaming channels will be much of a competition for Netflix. Netflix offers you a tremendous amount of content to watch for $10/month whenever and however you like. DIS will offer you some of their content, as well as sports (via ESPN) in segmented plans (I suppose). It will be a much narrower and spezialized offering. I don't see it as an either or. It seems more like when Lowes & Home Depot or WalMart & Target build right next to each other. I think both Netflix & Disney will co-dominate with Amazon, Sling, Roku & such squabbling for the offal. I believe that GOOG might become a strong player eventually. I also think that AMZN should not be underestimated, since it isn’t a separate offering, but there are over 100M prime members and it is a strong part of their Prime Suite offerings. I use AMZN prime video quite a bit and found it good enough to to cancel Netflix as I found more than enough stuff to watch there. DIS has to prove themselves in streaming and it is a high stake game for them. Those that cant make the jump from cable to streaming might be forgotten altogether within 10 years just like Blockbuster Video is forgotten.

I am positive on DIS, but I don’t think that DIS streaming channels will be much of a competition for Netflix. Netflix offers you a tremendous amount of content to watch for $10/month whenever and however you like. DIS will offer you some of their content, as well as sports (via ESPN) in segmented plans (I suppose). It will be a much narrower and spezialized offering.

Opinion: LOL and I am certainly not bullish on crypto currencies. I wouldn’t even know how to argue why governements starting their own crypto currency/s would be bearish of bitcoin and al, in fact if anything, I would consider it being bullish.

My NFLX trade is a gamble, i won`t argue about that and my history with these type of bets is not favorable for me (even though this year i am at +-0 with these type of bets). I still do it from time to time, because i sometimes simply can`t control my gambling habits. But these bets are always very small. I tried to get rid of them by simply having no access to free capital in my brokerage accounts which worked very well in 2016, but since i trade other systems than my NCAV system now (OTC stocks eat all the available margin.) i have to give my gambling habits a little room from time to time. (So i try to control my bad habits by doing them at least half way intelligently.) Other than that i am trying a lot of different stuff and keep doing what works for me personally, the DAX hedge is something i tested and that worked in the past. But of course you can`t get payoffs of 5:1 or 8:1 and win on every single trade. I try to collect a number of quantitative systems over time that suit me and that simply work. My options system for shorting stocks that i tested from Sep 2017 to last month has not worked for me because trading and implementation costs where a lot higher than simulated and expected. So i stopped doing that, even though it was profitable. I am just not the guy who can buy an index fund or AMZN/GOOG/NFLX/AAPL/BRK.B and leave it alone. Its not in my DNA. But my performance over the past 5 years was in line with the market and i expect to do a lot better in the future, especially if we finally get a larger market correction. How do you value the knowledge that compounded over this time? This was meant as an open question, not as a critique. Option trading is tough, since time is your enemy and as writer stated expected value is negative. I tried hedging as well a few years ago, as an insurance against my longs as well as shorting and found that it didn’t work for me. It required much more energy and time, distracts from long term thinking and even increased the volatility of my portfolio rather than reducing it. So shorting for me is out now and if anything, I would do an option trade, where I know exactly how much I can lose, which kind of helps with sizing. Even Munger said, don’t do shorting and I think he is spot on for 99% of the investors. Viel Glück!

Outstanding bank. Actually most of the Turkish banks are pretty good. Also Sabanci family has an excellent reputation. Pity about Erdogan though. I got aware of AK Bank when I was in a Turkey on a business trip. it’s is the best Turkish bank by virtually all metrics, with an owner operator family controlling them. Trades at around book and a 6x PE. I agree that thr political situation is a mess and a lot of the educated folks don’t like Erdogan. The country itself has a chasm between western and Muslim and hopefully can resolve this. The country itself has a lot for potential and the Turkish people are hardworking and some of the business work hard to be competitive world wide and making visible strides too. Very nice folks although the security situation is concerning; there are bomb searches in every car driving in a hotel and guards with metal detectors. That said, I am keeping this a very small bet and probably would be trading out of this to take advantage of the volatility. I own a bit of AVAL the columbian Bank, - same idea, but more expensive and safer.