Spekulatius

FYBR has presentations in their IR section with uptake rates for the fiber builds and they do plan to get to 40% in a couple of years and track the progress to some extend. This applies to areas where there is no or at most one broadband competitor and they are mostly targeting DSL customers. But yes, the uptake time ramp is critical for the IRR, if it really takes 10 years + to get to 40% penetration, then the IRR are probably not that great. I think any fiber build that does not get to 49% penetration is probably it going to have a great returns because I have not seen many fiber builds with much less than $2K cost per connection (all in cost, not what some of those fiber overbuilders companies are posting ).

Added a bit more $JCI yesterday and $APA today.

The returns depend on uptake and cost to build. I think you can charge $70/month for broadband / give or take. Thats $840 in revenue/ year in re Neue at 80% margins. Uptake is probably 40-60% depending on competitive situation. If you assume 50% uptake, that gets you to $336 annual EBITDA and a 15% min requirement assumes the all in build cost needs to be $2240/connected location. Thats my napkin math. One thing that worries me is that some of the subsidized ACAM funded builds seems to have costs of $6k or more per connection. Even with a 50% subsidy (usually, it’s less) , that still a net $3k /connection and works only with very high uptakes. Some ACAM builds have cost up to $10K/connected home and I think those will be uneconomic.

Tikr has various attributes that you can screen for that are basically PE (screening fot OE<8) Below is what I use. I also use TEV/EBIT in some of my screens. I sometimes have issues with negative valued and than need to out in another criterium like (PE>0 etc) to eliminate those, if those results are too much of a nuisance.

How can you manipulate the VIX? It is a calculated number based on pricing changes (=volatility) of the stock market. Stating that the VIX is manipulated is the same than stating the the movements of the entire stock market is manipulated (I think). It makes no sense.

Seems relevant not just for $SLB. The Saudis are basically saying they don’t need that much capacity any more. https://finance.yahoo.com/m/8934cccf-80de-37a9-8dd3-89e59ccaa3a0/saudi-arabia’s-directive.html

Anders luck knows history very well. I watched some of the podcasts. What he describes is what’s called “Salami Taktik”. It means the aggressive power takes a bit (a slice of Salami so to speak ) and that watches what happens. If no credible counter, you take an other slice. Is it going to happen? Probably not. Would it be Putin’s playbook, if he were to start something? Absolutely.

Available for free now as a PDF: https://www.mcdonough-investments.com/_files/ugd/662cde_668e3018ef6e40fbb571f89677f88474.pdf

Human progress is hard to predict. If you followed tech progress and projections in the 70‘s‘s, you would have bet that most power is generated by nuclear power stations and that we would have a colony on Mars. Nobody predicted that we would have the equivalent of a supercomputer in our pocket that can connect to other superconductors in other people’s pockets anywhere in the world, Nuclear power didn’t happen because people soured on it not because it wasn’t technically possible. The Mary colony didn’t happen because after the Moon interest interest waned and we did not make any progress on rocket engine tech chemical powered rocket engines are limited in terms of what can be accomplished. The supercomputer ( smartphone ) became possible because Moore law kept compounding for 45 years and it is basically unthinkable what you can accomplish compounding technology at that rate for a long time. The rocket engine tech did not compound and is more or less still the same than it was in the late 60‘s. Investing is betting on human progress more or less and over t/e long term just as hard as predicting progress.

@cknucks Thank you for your input. I am very aware that technical gases is a structurally advantaged business. I have two concerns with APD: 1) I am not sure that the valuation reflects the higher interest rates going forward. APD is basically similar to an utility as they invest in assets with LT cash flows growing faster than the economy probably because they supply growth sectors like semiconductors and trends to outsource some non- core functions (like producing gases for internal consumption) rather than buying/outsource them. Cost of capital is likely to go up. Sure new project will likely take this into account, but the existing plant stock is likely locked in. Maybe those distinguishing plants benefit from inflation. 2) Most of the new projects have not locked in contracts. APD‘s management spent a lotmof time answering questions about the increased cost of the Louisiana plant, which their board just approved for $7B in Capex. there are no locked in prices for the end products which is Blue hydrogen and ammonia. They don’t lock in prices because they think that they can sell those green product for healthy premiums to regular products when the plant comes online. Maybe, but I am not sure we can predict those premiums yet. APD has a ton of the projects at several stages of progress, so there is a bit of execution risk which could add delays or increased cost and perhaps most likely both. I have put APD on my watchlist and will it monitor closely. At a PE of 20x, I don’t think there is all that much margin of safety here, but yo may not give them enough credit for the longevity of the business.

Bingo. Biden is not doing well with young voters, so my guess is that he feels he needs to do something.

I have bought and sold my fair shares of these nanocaps that trade for 50c on the dollar. most of my sales were out of frustration and be sued yo lost patience. They require lots of patience and may not work for a decade (I am not kidding here) . They are also not hard to find at all. The hard part is finding those with decent management or a catalyst. Thats probably no more than 10% of the population. Knowing what management is up to is absolutely critical, much more so this if your discount to fair value is 50% or 2/3 of fair value.

If you don’t mind a grab bag of assets, buy QUCT. You get 25k of farmland ( the result of a 19th century Mexican land grant) in near coastal central California for basically free. I am not sure it ever gets monetized though.

@John Hjorth Spirax Sarco - a great Uk company has the same thing , you can get a free hard copy of a book about their history. I ordered it and got it a bit later. It’s a great company too, but fully valued. https://www.spiraxsarcoengineering.com/about-us/our-history

100 bagger, that’s something. I guess AJG is in there as well? As Spock said - live long and prosper.

Climate impacts can’t be the real reason, because Europe is going to use the NG anyways (or has to stick with coal, which is far worse from a climate perspective), it’s just the question where they are going to get it from. I suspect the real reason is that Biden wants to be NG prices low in the US to fight inflation or help the industry (lots of chemical industry in his home state Delaware benefiting from low NG prices). its not a good reason be sure mostly NG prices are high because of lack of pipeline infrastructure not the NG cost itself. Anyways, I think the real reason is not the environment or emissions, Biden has this thing going on with energy costs and we all remember he wanted to keep the prices at the pump low last year, using the SPR. I think this is sort of the same thing and very shortsighted.

Based on what I am reading, the stock may not be that cheap. Trading at 1/3 of book at a PE of 7 means that if it traded at book, the PE would be 21 or the ROE a bit less than 5%. That would like a value trap to me. the only mitigating factor is that they bought back their own shares in size, which most microcaps don’t do. I guess the important facts are in the detail, but just based on what you wrote, the stock could well be a value trap.

Well I own $BTI so emphatically yes.

Similar thing happened with my CHL holding. Trump already lost the election, yet Munchin somehow decided right after Christmas 2020 to ban US institutions and person from holding them causing forced selling. The ruling wasn’t even clear at that point, so the brokerages made their own rules because nobody knew what to do. This is the risk you are taking when owning shares from a country that is an adversity to the US. Just look at what happens in WW1 and WW2 with German business in the US. Schering Plough is an interesting history to read on that matter. @Castanza also bought the shares after the invasion to Ukraine deeply discounted, so it was a clear gamble which so far has not panned out. At least to me, it’s pretty clear that if you own Chinese shares and China attacks Taiwan, your shares are going to be very likely frozen for a long time. You can debate all you want what is right or not, but history has shown that in a war, your ownership rights to foreign assets are likely forfeited. Thats nothing new either, but has been true literally forever.

@ValueArb $RILEY involved in this as well. They seem to have a knack to align with dubious characters. Marc Cohodes is on them and think it’s a terminal short. Wouldn’t mind seeming them becoming roadkill personally.

You think this is nice? Looks like a Courtyard budget hotel building to me. Imagine having tons of money and building this

This perhaps could deserve its own thread but HDB (HDFC bank) looks interesting according to this writeup from valuepunks : https://valuepunks.substack.com/p/hdfc-bank-an-update I don’t know much about Indian banks, but HDB stock does look like a decent opportunity.

A good part of the real estate boom occurred under his watch. He has been in power since 2013 after all. RE was a way for the CCP to make their GDP growth numbers and that’s why they kept encouraging RE and now it’s way too big and those investors in RE are likely screwed. Xi now wants to deflate RE slowly as to not implode the economy. I think Xi is the worst leader China had since Mao. Anyways, I think the big companies like Alibaba, Tencent etc can do well despite all this, provided they are going to be left alone by the CCP, but that does not seem quite likely either.

His early exploits can still be found here in his blog: https://adventuresincapitalism.com/author/admin/page/66/ He definitely had thing going on with real estate in Ulan Bator (Mongolia) which don’t ended well for investors. In my opinion, it’s clear he has come a long way.

Kuppy seems to have learned a few things along the way - he is more flexible and his risk management seems better. Many great investors blew up -Ackman blew up twice with his Target vehicle and Gotham Partners, that didn’t prevent him from being successful later,