Spekulatius

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.

I also added some DD at $65 and change today. Had bought a 2nd lot a few days ago, but sold it immediately flat when the tape turned soft. It looks like this stock is going to see $63 again in short order, but you never know. Added a bit more DD today. I also added for the umpteenth time MEGACPO.MX. Starting to get towards my max. Position size here.

Interesting clinical candidate with an unmet need. It looks to me like they will need to raise cash with a secondary very soon though. Word of advice...this is a highly promoted stock at tier 4 brokerage houses and to date, the company has been very eager to use any sort of share price bump to raise capital. Note, that's what they all do, some just more regularly than others. Thanks for the color. I have no idea what a Tier 4 brokerage is, but I suspect that these are the dinky outfits that recommend and pump microcaps? Anyways, the way I see it CR P has maybe 2-3 quarter of cash left, which means that they probably raise in the next 3 month or 6 month at the very latest. Typically buying ahead of a secondary is not a winning proposition.

Interesting clinical candidate with an unmet need. It looks to me like they will need to raise cash with a secondary very soon though.

I also added some DD at $65 and change today. Had bought a 2nd lot a few days ago, but sold it immediately flat when the tape turned soft. It looks like this stock is going to see $63 again in short order, but you never know.

Sold some FOX, just in case we get another round trip to $30.

I think I would rather deal with the Russian than the Saudi corruption. Valuation are much ore forthcoming too and in Russia, We know what to expect. From what I read, the rich cronies in the SA upper crust are more or less forced to invest, which probably tells you all one needs to know about this. Perhaps this stock is interesting at some point in the future after a steep selloff. For now, it probably should go into the “too hard” or “yuck” file.

The article states that growth has outperformed for at least 25 years. So in a way, one could say that the timeframe from 2002 to 2007 was the aberration, not the time since 2008. Maybe investors systematically underestimate the propensity of growth to persist and business disruption and overestimate the ability of business to reverse to the former mean?

I wouldn’t lose any sleep over it.

Sold part of my SDI today. Stock popped due to proposed merger with the 50.1% sub TPB. I wish I could have accumulated more SDI, but I take what I get.

The podcast with Prem is way too much of a love fest for my taste. I haven’t listened to podcast with Smith from FDX yet but he feels a little bit delusional to me regarding AMZN in his CC.

The position at that point was limited to 80% only because otherwise, FRE and FNM would have to be consolidated on the governments balance sheet, which would ave cracked the debt ceiling (at least that’s what I recall). Anyways, I have spent more than 2 h on this and still don’t know what to make of it. I think it’s basically a political bet and if the political wind blows in a different direction going forward before it is privatized, I think the status remains as is, which pretty much would be the best for any stakeholder (government, homeowner) but the current shareholders. That’s why this is an “oddball” and not a regular value investment, imo.