abitofvalue

Yes. Everything is negotiable right now. and being willing to cancel is a powerful motivator. Have found asking when my contract is up in response to no discount does wonders. Esp in cases where there is 'no contract' and a competitor exists. its like calling your cable company and asking for a discount or something.. usually you get it. we managed to do this for a couple of diff things we get billed monthly on.. hr/payroll software and our IT services guy..

Interesting that WEB already came out and said he wouldnt be investing..

I believe there is a piece of new information in this article: "Privately they have said they would like to reduce Fannie and Freddie’s loan footprint to between 30% and 40% of the market, according to people familiar with their discussions." Additionally, quite amazing if you take a step back 1-2 years and see how drastically the narrative has changed. Could argue that Mnuchin has done a great job at "boiling the frog" in terms of creating sentiment shift (rather than doing everything at once), but that could be confirmation bias. If Fannie and Freddie are 30-40^% o the market, profitability will be markedly lower than recent years.

+1

I can assure you that a lot of people will get hurt in the real world if he were to do this. Job losses, financial losses, inflation, the inability to buy essential goods, ... it will be amazing. If I were President and I wanted to see the country burn I would seriously consider doing this. Maybe launch a few nuclear missiles too while I'm at it, because why not? But Trade is a congressional power. They have delegated it to the president but it would be relatively straight forward to change back to Congress. If Trump banned all trade with China after loosing the election, you would hope the Republicans who survived would band together with Dems to reverse course and take trade powers back - it would serve their donors, constituencies and limit powers of the next dem president.. Got to love the party that is constantly warning the other party is a socialist, standing by and supporting the 'hereby ordering' of private companies to work against their own economic interests.

Silly question - if the new directors direct changes without congressional action, what's to stop future Pres Harris or Pres. Warren from reversing the decision and declaring a large dividend to treasury.

I think you also need to be careful of hindsight bias here.. most of these sutuations represent inflection points in businesses where wall street was too pessimistic on success of a change in strategy. I really don't think there was a 'misunderstanding' of the business model or lack of understanding of industries in the sense that ppl didn't understand what was going on. In a lot of cases e.g. WWE the strategy had real risk and meaningful downside or at least Wall Street wanted to see signs of success before bidding it up. Maybe your variant perception is you could have seen the signs of success earlier.. I kind of agree with your cable example. Pricing power of Internet service / threat of competition from 5g etc hasnt been as bad as feared. That said given the huge capex investment it still could be an issue.. Cable does need a period of low capex / limited price competion to work out.. There are also probably tons of examples the other way - wall street being too optimistic of a change... One thing - This notion that wall street is elitist and wouldn't own WWE isnt actually true... Look at their top 20-30 non insider holders.. taking a random quarter - Q2 2017 - based on a cursory glance - it was held by Blackrock, Eminence, clearbridge, Vanguard, Capital, State Street, Balyasny, Principal to name a few.. Another stock that you mention Credit Acceptance - is mentioned so often as misunderstood it's arguably reached the point where the fact that ppl think it is misunderstood is in itself a misunderstanding.. the stock trades at a 2x PE and 4x PB multiple premium to other auto lenders.. think investors understand the model enough to give it that valuation.

Not hso first rodeo.. check out the call from Jan I think. Not as wild but pretty much called put analysts then too. Interesting shot at TSLA in response to question about him getting on Twitter.

I would think this is simply a case of cyclical industry trading at low multiples when at peak earnings. There are reasonable reasons to believe that the current cycle has peaked and vehicle sales will decline for the next 3-5 yrs. Auto bulls say bears are being too dramatic and sales will plateau.. or fall will be gradual not meaningful... Bears say no SAAR is going from 17M to 14M and the auto makers are ill prepared for such a drop in sales. Bear cases i have heard come down to the growth in leasing. Low interest rates and high used vehicle prices have driven a sharp increase in lease volumes over the past 5yrs. There will be a ton of leased vehicles coming up for lease renewals. Lease expiring vehicles have benefited from high used vehicle pricing as losses from lease return sales have been low and lessees have bought the leased vehicle. This will change when they can buy a comparable 2-3 yr old vehicle for less than the buy-out price in the lease contract. This will increase supply of used vehicles and lower prices. Lower used prices will reduce value of trade-ins impacting new vehicle sales. Which will drive inventories higher. You saw this playing out in 2017. the hurricanes helped clear out inventory, boost demand for replacement vehicles and as such delayed the cycle turning.. Keep in mind also playing out along these supply/demand dynamics is higher interest rates which can dampen how much investors are willing to pay (monthly payments) and impacts lease economics.

Yes they do.. but given their risk parameters and closing of loosing positions you cant have investments down 20-30% for multiple quarters under the "i liked it at 100, love at 60...will be 250 in 3 yrs" Most of the big multi-manager platforms have tight loss limits so it can be hard to be a LT investor. Alternatively, some would say they are LT as they have owned AAPL, AMZN , GOOGL for years with some trading around..

Shouldnt We want more of these analysts doing bad jobs and impacting stock prices for non-fundamental reasons giving LT investors more chances to take advantage of Mr. Market?

Lol at companies and CEOs like Nooyi blaming quarterly reporting for their inability to focus on LT. They can always choose to not play the game of giving guidance and the meet and beat but then how they will justify their $$$$ bonuses and keep options in the money in shitty quarters.. Amazing how often shitty quarterly results are delivered with maintaining full-year guidance or 100 reasons why there are 1x charges to blame. If you actually want LT focus, demand executive comp be tied to LT shareholder / company results reported under GAAP with no ability for the board to accelerate LT awards on retirement etc.. But OMG thats communism. how can you dictate how much private companies pay. But yeah lets dictate how often companies report to their owners.

I partially agree with this but the dealer is really in a crucial role. Often the dealer owns the relationship and the choice whether to make a loan with their own money or sell the loan. So if you have done all the work getting the customer, etc. why would a dealer just sell the loan and allow someone else to make ~20% per year after provisions. I wouldn't. The dealer are very street smart types. My point being that CACC doesn't deserve to make 20% just because the dealer can charge 20% on the loan, Unless the dealer is desperate for cash. And a lot of the underwriting is meeting the person and following up on them and working with the borrower. Someone comes in and throws a wrapper on your desk and want to borrow money - how do you put that in a loan app? Super specialized, tough business. I wouldn't touch it. The point is that the dealer is really the lender, if it a good loan the dealer would keep it. Bad loan - stuff the lender if he is being stupid. There are a lot of floorplan lenders and other lenders who will charge much less than 20%. To me the 20% is fantasy land stuff for CACC. Also - as a side point. CACC is growing the loan book very fast while defaults are rising. That is the opposite of what a disciplined lender would do. Dealer loans are NOT floorplan loans. Thats a B2B business very very different from financing consumer auto lending. The 20% rates are because there are no other lenders who will lend to the consumers CACC will lend to. There is a reason 50% of cars end up being repossesed. That's way way way above other lenders. Heck SC is a lender to pretty subprime customers and only has gross charge-offs of around 15-20%... The dealer sells the loan because he doesnt want to deal with collections and wants to free up capital. In most / almost all cases the dealer is only making the loan in the legal sense.. the dealer is not the lender in any meaningful economic sense. The sale to CACC (or another lender) is almost instantaneous. I think CACC has tremendous regulatory risk and potentially has cash-flow issues that the plainsite report has highlighted.. i think the accounting is nuts too.. so its expensive but historically they have done fine lending to borrowers with questional credit by charging up for it..

There probably should be a CACC thread.. (there may be one.. havent checked). For those new to the company - dealer loans and purchase loans are both loans to consumers. In both cases, CACC is buying an auto loan from a dealer. The difference is in a purchase loan, CACC buys the loan and that ends the dealers involvement. In a dealer loan, CACC buys the loan but also agrees to share profits with the dealer once it has recouped its investment. Because it has this "profit share" component, it pays less for a dealer loan.. the idea being dealer is going to get some back-end payments (dealer holdbacks). Purchase loans are what all the other auto lenders do for the most part. In good times the proportion of purchase loans increases. These are higher risk (no profit share) and likely have lower returns (more competition) The accounting is confusing because unlike the vast vast majority of companies, CACC uses level yield accounting. What this means is that the company projects out future cash-flows on loans and adjusts the amount of finance charges booked in each period. Basically, it makes an assumption when loan is made and then adjusts it throughout its life. Given the moving parts, comparisons to other auto lenders are hard / impossible. Don't understand every little nuance of this but thats the jist. In terms of the interest rate.. yes the 22% sounds about right.. might even be lower than actual interest rate charged as they are only booking the cash-flows they expect to receive. Keep in mind, CACC is lending to ppl who have no other choice. In general default / repossession rates are probably around 45-50% of loans (by number of loans) so the interest rate tends to be high The business is ripe for abuse because the borrowers are the bottom of the economic ladder, typically unsophisticated and unlikely to have resources to fight them. Some have argued that CACC is a collection company, disguised as a lender.. others say its providing cars for ppl who have no other alternative so a great company. The right comp might be a payday lender. Yes the ROE's etc look great but there is a ton of regulatory risk (esp if the CFPB / State AGs actually want to act).

Mumbai --> Mid-west (Iowa, Illinois, Indiana) --> East Coast (NYC) --> Bay Area (North Bay)

could be wrong here but doesnt the judge have to approve the deal and BRK's termination fee first?

This is probably unfair to them but I legit lol'd at their talk of culture and how their committees work so well that 1+1+4=>6. Like umm I think maybe Sharon and Vinod would disagree... But it seems like they get it and they acknowledged that talking about culture is all just talk..

+1

:) ++

In terms of being involved - GGP was a spectacular one... helped pay for my living expenses through business school.. and i still own the HHC spin-off. One's i wasn't involved in - Erbey complex - OCN, AAMC, etc were ridiculous implosions too.. Macquarie infrastructure went from $1.XX in 2009 to currently in the $80 range.. And of course BRK itself over the $61K in 2003 to $240K currently

I am confused too because he was buying http://www.sec.gov/cgi-bin/own-disp?action=getowner&CIK=0001549575 He was buying in July and September but this does not seem to be reflected on the 13F. Anyone have any insight on why this looks this way?? My guess is just different reporting entities.. The Form 4 includes all shares controlled by Pabrai (i.e. includes the insurance sub Dhandho holdings, and other accrs). The 13F includes only Dalal Street.

Yale has a center for international finance which has a bunch of these old bonds / stock certificates etc on the walls. Just the same as putting up art.

CoBF investors might trade a lot less. Value investors "by definition" do not trade "a lot less". Value investor can buy undervalued stock and sell it in 2 weeks if it appreciates above the intrinsic value. Same with netnet investors. You might as well say that growth investors "by definition" trade a lot less: they should only sell when company stops growing, no? ;) fair point. I guess i should have said -- "the target audience is not long-term concentrated investors looking to buy companies with a large margin of safety or an economic moat, as these people are unlikely to respond to small daily movements in the stock price and therefore are more likely to trade less frequently than the typical stock jockey under normal stock market conditions." 8)

Important to keep in mind incentives - sell-side gets paid via trading activity. So the bias is towards trying to find something actionable which can lead to a lot of false positives and constant tinkering with target prices. Add in the fact that most institutions have forced curves (x% buy, y% sell), corporate relationships, and directors of research really don't like things being out of whack (target price on a buy being within a few cents or less than current price) and you have a recipie for tinkering with target prices. The other alternative would be constantly moving from buy to sell to neutral which requires the to go through some internal committee, hurts corporate / investor relationships and can make an analyst look schizophrenic value investors by definition trade a lot less and spend time thinking about the long term so sell-side isn't really focused on the value investors. Read initiation coverage or non-earnings reports to learn about business models, learn about companies and management teams etc.. Even the drivers are usually spot on. Target prices are usually 12 month targets and almost always back-solved for. To actually know what the analyst is thinking you need to speak with them. at the end of the day the good analysts on the sell side can add value but it's still focused on generating trading activity. Doing good research helps build the analysts research analysts reputation, client base etc to the point when he says something is a buy or sell it can move stocks. Which is why stocks move in response to upgrade / downgrades but not in response to target price changes typically.

This is strange - what exactly do they expect will happen once the suspension is lifted? Wouldn't even more people likely sell?