Spekulatius

Nigeria looks pretty cheap if these ETF stats can be trusted: https://finance.yahoo.com/quote/NGE/holdings?p=NGE

Huh? What have the Fed hikes to do with politics ? Powell was chosen by Trump, by the way. Anyways, I can’t see how a 2.5% interest rates (real interest rate is 0.5-1% after inflation) can cause a problem. It sure seems to be a preferable situation Europe, where interesting rates are virtually nil and the economic is crawling to a halt nevertheless. My guess is that the recent drop in LT interest rates in The EU is caused by Brexit uncertainty, which is an exogenous event for the US. I also note think that every value investor should love volatility.

Recession would occur with and without the Fed. It looks like the yield curve inverses due to rates in the EU being inverses, not because the economy is too weak. I don’t see credit freezing up, nor do I see a recession. The only issue I see is that the Fed is talking about what they are going to do and it seems counterproductive. I suggest they do whatever they want to do and shut up about what they are intend to do in the future. I personally like some volatility in the stock market. Another panik run this year would be great.

Interesting company and nicely profitable, but revenues went nowhere for a couple of years, due to the mamaise in the E&P sector. They are paying a dividend in excess of earnings and sort of paying with this in shares (proceeds from stock option exercises). Looks like a bet on E&P recovery or possibly a takeout.

I doubt that private infrastructure would be cheaper. Sure there is some inefficiency with public infrastructure but the advantage of a low cost of capital is huge. Anyways, my favorite quote is: “What the wise do in the beginning, fools do in the end.” And then there is the age old wisdom: “Goes butter, goes cheese”

FITB today, it has been very weak lately. DIS yesterday.

7238.T ( Akebono Breaks) will Test that hypothesis. Terrible looking balance sheet and ominous language in their last quarterly report about going concern. This is an interesting case, because Akebono is actually a decent brand name in its space.

I have mostly purchased stocks in semi attractive business with growing top and bottom lines, selling at single digit PE’s and paying at least an increasing dividend. I have avoided these money losing or barely break even companies or those that are supplier slaves to keiretsus. So no iron bridge construction, textile or refrigerator companies for me. The movements in the Japanese stock markets are a total mystery to me, but from time to time, companies ai know get really cheap, even though the business isn’t changing much. so, I buy what looks cheap, with a good balance sheet (net cash) and paying increasing dividends over time and just ride them - hopefully up. It works more often than it does not and is often not correlated to other stock arrests either, although then Japanese markets sell of, they really do!

Are you guys buying just net - net or do you also look into traditional low PE/ “decent business at very low” price stocks as well. Most of the stocks I am looking at have a low valuation, but arn’t net nets.

Why do you sell your lower cost shares ? You should sell your high cost shares, perhaps take a loss and either wash sale it by parking in another tobacco stock or just rebuying 31 days later.

Looks like some kind of buying frenzy in the Hjorth household. What did your wife get?

MKL isn’t really cash constrainted, imo. Rather than adding bonds, how about reducing debt and specifically the preferred?. They pay about $350M in interest annually. I doubt adding some bonds at prevailing interest rates is effective vs just reducing interested rate expense ciampreferred or bond buybacks.

I've also reduced my shares, but it was basically because my thesis didn't play out. I loaded up on Fairfax expecting two things to happen: 1) Interest/Dividend income would dramatically increase over the following 2-3 year period due to rising rates which would lead to share price appreciation 2) Significant buybacks at prices from $450-550 USD would likely be accretive if income was to rise dramatically I sold most of the shares that I had purchased based on disappointing outcomes in both regards. 10-year rates rose to 3.2% prior to falling back down to 2.6%. With low inflation and limited pressure in the near/mid-term from rising front-end rates, it's hard for me to make a case for rates to rise as significantly as originally anticipated. I'm not saying Fairfax should've played the short-term game, but they did miss an opportunity to lock in longer-term rates and the opportunity set for increasing interest income in the near-term appears challenged. Further, buybacks have been less than I anticipated based on Prem's first comparison to Teledyne...and have been further diluted by compensation and share issuance that were unanticipated at the time of purchase. I still some shares and would be willing to add in the low 400s near book value, but there doesn't appear to the be the catalyst for anything to change with the company or help them achieve the 15% ROE that I initially anticipated. I agree on all counts. I think it’s fair to say that the thesis as most of us envisioned it a year ago didn’t play out and is unlikely to play out in the near term future.

I have reduced my shares before the annual report came out, and sold most of my remaining shares, except a tracking position after reaiding this. Reasons 1) share solution ( ~2M more shares). This isn’t Teledyne. 2) continued book value losses. 3) too many crappy investments. FFH is really too complex for its size and it’s not working. I recycled some funds into BRK last Friday, but have further thinking to do how to reinvest the proceeds.

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.